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Malaysia S Hotel Industry and Link Analysist A Bung
Malaysia S Hotel Industry and Link Analysist A Bung
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BUSINESS PROJECT
Alor Setar
2017
INTRODUCTION
The growth of tourism industry started way back in the 20th centuries. It then started from
visiting friends and families and later expanded to business and leisure trip overseas. These figures
clearly show that tourism is as important as agriculture or mining in the world economy. In 2008,
238.2 million jobs were created in tourism industry, 922 million tourist trips which involve overseas
and local trips. These facts reveal the importance of tourism in the world’s economy and its’ role as
As according to Muhammad and Henderson (2003), developing nations have taken advantage of
rapid development of this industry in terms of positive economic consequences like income and job
creation, foreign exchange earnings and inward investment. Tourism brings in substantial revenues
contributes to overall improved living of the related countries. This includes Malaysia where
tourism has becoming the top foreign exchange sector next to manufacturing (Malaysia Budget,
2009). It is believed that in the future, tourism will be the biggest foreign exchange earner surpass
manufacturing sector. The expansion of the tourism industry, through its linkages, has contributed
to growth in other related activities, particularly food and beverage, accommodation, entertainment
This paper presents the overview of Malaysian tourism and hospitality industry and highlight
issues, challenges and trends surrounding this industry in Malaysia. Using snowball sampling, this
study conducts in-depth interviews with the experts of hotel industry who are from government
officials, hoteliers and hotel associations represent hotels industry in Malaysia and giving Tabung
METHODOLOGY
The research will be take place at the Islamic hotel around Alor Setar. This study focused on
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Islamic hotel in Alor Setar because Alor Setar has the new development state compare to other
states in Malaysia. For the study population, this research use sample of Islamic hotels employees in
Alor Setar. In this sense, I was using literature review, internet research, books and academic report
in this studies.
Malaysian hospitality industry grows rapidly consistent with its tourism industry. This is seen in
the increasing numbers of new hotels open and rooms offered in Malaysia. For the past 9 years the
supply of hotels in Malaysia grew 60 per cent from 1992 in year of 2000 to 2000 in 2009. The
supply of rooms increased from 124.413 to 168.844 in the respective year. Currently, the hotels
industry supplies more than 160,000 rooms for the guests. The average occupancy rate for hotels in
Malaysia is 60 per cent and at top tourist spot places like Langkawi, Penang, Pahang and Labuan
the occupancy rate goes up to 70 per cent (Malaysia, 2009). Also, domestic tourism is an important
component of Malaysian tourism with nearly 90% of the domestic trips made for leisure purposes.
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discourages domestic traveller spend, as shown in statistics from The Department of Statistics
Malaysia (DOSM).
2. The increased accessibility from China and India— which makes Malaysia a holiday destination
of choice for tourists from these two countries. Flights between India and Malaysia have seen an
increase of 20,000 seats per week, while the newly-introduced 15-day visa-free travel from China
3. The advancements in local infrastructure—which has inflated overall hotel and room demand, to
create the growth in supply that we see in the market today. Malaysia Tourism Data reports room
Malaysia’s hospitality industry is high, so is the attrition rate. Across all support staff in the hotel
and hospitality industry, the attrition rate of 18% is double that of the general Malaysian workforce.
Employees cite better external opportunities, work-life balance, and further studies as the top three
reasons for leaving their jobs—all reasons to drive HR to focus on overcoming talent attraction and
retention issues in the coming year. Secondly, the Malaysian government recently put the Minimum
Wages Order 2016 into effect, which mandates that all organisations provide a minimum wage of
RM 1,000 a month to all employees in Peninsular Malaysia, and RM 920 to all employees in East
Malaysia & Labuan. As a result, the escalating people cost has driven hotels to shift from a basic
salary structure supplemented by service points to a clean wage structure. In the Aon Hewitt
Malaysia 2016 Hotels & Hospitality Survey, we discovered that 33% of hotels have made the shift
Finally, disruption has increased competition for the hospitality industry from both a talent and
business standpoint. With better opportunities and work-life balance in other industries, talent
attraction and retention continues to be a critical people challenge. At the same time, homestays
with the ‘AirBnB model’ pose a threat to hoteliers’ market share—with 5,542 registered homestays
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in Malaysia as at May 2016 and Brickfields in Kuala Lumpur ranking third in the world as a top
The hotel industry in Malaysia witnessed about 72 million people staying at properties across the
country in 2015, nearly 69,87% included domestic visitors. Commercial accommodations, such as
hostels, bed & breakfast, etc., are top of the choice for international travellers to Malaysia with
Though hotel demand in 2016 slowed down together with the decline in arrivals, the long-term
demand for hotels remains resilient given that the country is still an attractive destination with
several gateway cities such as Kuala Lumpur, George Town, and Johor Bahru. Previously, the
Commercial and MICE travel segment was fuelled by large primary and secondary industries that
specialised in oil and petroleum products. However, shifts may be formed due to the weak
performance in the oil market and the new drivers are expected to be from the financial sector.
Source: HVS Research, Malaysia Tourism Office
According to Malaysian Tourism Office, in 2015 total of 4827 classified hotels, which account for
284,415 rooms were recorded. During 2013-2015, Malaysia hotel supply grew by CAGR of 13,7%
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term of hotel. Of the existing hotel supply (by number of hotels) in Malaysia, 22.7% is branded and
affiliated with an international company while the rest comprises of independently run operations.
The branded hotels are mostly located in Kuala Lumpur, along famous tourist attractions in coastal
areas such as Langkawi, Penang and the key cities of East Malaysia such as Kota Kinabalu and
Kuching(HVS,2016).
This is expected to lead to an increasingly competitive upscale and luxury hotel landscape, putting
pressure on occupancy and average daily rate (ADR). However, these tilt developments are also
expected to induce fresh demand into the market as they reach out to their core consumers across
the globe in the luxury end of the consumer segment and market Malaysia as a target to them.
1.2.Hotel Performance
Hotels in Malaysia during 2014 experienced mixed results in the three key performance metrics
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66.7%, average daily rate was up 3% to 340.96 Malaysian ringgits ($110.07) and revenue per
available room increased 2.3% to 227.36 ringgits ($73.40). Hotel supply is expected to increase 7%
Japan have higher quality, things from China have no quality and so forth. This is partially true in
reality, majority of the Malaysians opt to buy import goods where there is an option for them.
Therefore, local made products are usually having less supports from Malaysian as it has been
perceived to be low quality in terms of unreliable and unattractive. This shows that local made
products have lesser competency even in local market. Consequently, government encourages both
the manufacturer and services provider to look seriously in quality issue by giving several
incentives (Malaysian Rubber Export Promotion Council (MREPC,2009). However, the outcomes
of it are not up to the expectation. This may due to the inadequate research carry out in Malaysia.
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Thus, organizations especially the small size ones will definitely lack of information when trying to
Kuala Lumpur is one of the major cities in Malaysia with an estimated of 1.6 million of
population at the year 2005 (KL City Plan 2020, 2009) and it is to be said as the fastest growing
region in Malaysia. This figure says that Kuala Lumpur is the most densely populated district in
Malaysia. Moreover, Kuala Lumpur has a vast number of tourists and it increases over years. Just to
name a few, its major tourist destinations include Dataran Merdeka (the Independence Square),
House of Parliament, the Istana Budaya, the Istana Negara (National Palace), the Kuala Lumpur
Tower, the Muzium Negara (National Museum), Petaling Street and etc (Tourism Malaysia, 2009).
With the limited land that Kuala Lumpur has, it is almost impossible to build more hotels in order to
cater the increasing number of tourist in the near future. Therefore, several actions have to be taken
in order to best serve the tourists with the limited number of hotels in Kuala Lumpur. This is to
ensure that the receipts from tourism will not be negatively affected while the hotel industry can
As time goes by, Human Resource Management (HRM) has become a popular topic than ever
before. Organizations have understood the importance of employees (human resources). At the
same time, empirical research studies have been done by researchers to further understand and
prove those theories related to motivate and compensate employees. Dessler (2005) says that
employee' satisfaction and performance are positively related. Therefore, hoteliers must understand
the importance to maximize their employee' satisfaction as this could lead to greater business
performance. However, by solely compensating employees with both monetary and non-monetary
rewards has its limitation. Performance will stop increasing when the problem arises are not come
from employees but the management. For instance, it could be lacking a well-planned system in
executing tasks, ineffective communications in organization and so forth. In other countries, TQM
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has been so popular for a period of time as it helps organizations to achieve even higher of
performance. In other countries, plenty of research studies have been carried out to investigate
which TQM factors are the most influential to the particular country. Unlike in Malaysia, the
number of TQM study that can be applied is limited and lacking of guidelines for hoteliers is still a
major problem.
Someone could say that innkeeper can simply use the findings from other countries as a guideline
for implementing the TQM. But, there is always a high possibility that those mentioned as
important factors are not important in Malaysia, when compared to the original country that the
research is carried out. In other words, it is imperative to understand the applicability of the findings
from other countries. The applicability of some of the findings from research still remains
questionable. For example, information and analysis, one of the TQM factors is said to be extremely
important to developed and developing countries but it is not persuasive enough to apply on third
world countries. This is because they probably lack of necessary infrastructure. Therefore, it can be
said that Malaysia's hoteliers are actually lack of a blueprint when initially applying TQM to their
respective hotels. In other words, hoteliers may not known which factors of TQM can generally
lead to better performance in the Malaysian. Furthermore, with the limited of number of such
research available to Malaysia, it has nothing to show hoteliers how strong the impact of TQM
factors is to labor productivity, thus lack of motivation to change their routine and ways of doing
business. When this occurs, Malaysia hotel industry can never be improved, previously owned
Tabung Haji Hotel(THH) is a wholly owned subsidiary of Lembaga Tabung Haji in Malaysia,
consigned to spear head the Group’s business involvement in both the hospitality and service
industry,both nationally and internationally. Tabung Haji Hotel and Investment Group’s
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management composition consists of professionals who have cumulatively over 50 years of
Hospitality & Service Industry experience and expertise. TH Group’s has got five hotel and
different type of investment and they want to open new two hotel - Kelantan and Sarawak- in this
The team at all TH Hotels are committed to their 3Cs principles- CONVENIENCE, COMFORT
and CONFIDENCE- through their arrays of facilities and service delivery, with spacious rooms,
banquet halls, restaurants, meeting rooms and other services namely airport transfer, car park, room
service, laundry, concierge, scheduled shuttle to the city centre and amenities for the disable. It is
indeed a privilege to be associated with their organization and they are ready to extend their
services to people.
Tabung Haji Hotel Group’s has got more and more important motto, which is the hospitality and
service industry, operating locally and internationally, in major cities of the world, contributing to
the economic of the ummah. At the same the this motto giving shape their visions and missions. TH
Hotel & Residence under its TH HOTEL brand, will be an Islamic Shariah Compliance leader in
the hospitality and services industry, operating both locally and internationally in major cities of the
Tabung Haji Hotel and Residence brand will be the preferred choice by customers, stakeholders
and associates.They uphold the values of Islamic Maqasid Syariah (Goal & Purpose) compliance in
all operations and services.With the hallmark service culture Salam, they would be promoting
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Islamic hospitality values, with efficiency and effectiveness.
With a pool of talent and resources created, TH Hotel & Residence will provide a conducive
2.1.Opportunities
TH Hotel & Convention Centre Alor Setar is situated only 5 minutes from Sultan Abdul Halim
and 10 kilometres from the state capital of Kedah, Alor Setar is a 3 star hotel including 207 rooms
including Superior, Deluxe, and Family Suite designed with Shariah Compliancy in mind. Tabung
Haji hotel is suitable for events and banquets including with an event hall accommodating a
capacity of up to 1000 persons at a time and for meetings there are 8 meeting rooms from which
one can choose from.TH Hotel Alor Setar also has a cozy swimming pool for those who fancy a
refreshing swim. Being situated in the heart of Kedah Tabung Haji hotel is also in close proximity
to attractive sites to visit such as the State Art Gallery which is along Lebuhraya Darul Aman and is
TH Hotel & Convention Centre Alor Setar provides other facilities such as a 24-hour room
service, airport transfer, car park, coffee shop, concierge, elevator, facilities for disabled guests,
laundry service, meeting facilities, restaurant, room service, safety deposit boxes, and smoking area.
For sports and recreation there's a fitness centre, outdoor pool, pool for kids, sauna, and steamroom.
There are also internet facilities such as Wi-Fi in public areas and of course a wide area car park.
● Technology: Nowadays most of the hotels use online reservation system is to enable
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customers make their reservation online. One respondent (D) highlighted that recently,
there were complaints by tourists on reliability of online reservation system for hotels in
Malaysia. They did the reservation and pay in the internet through the online reservation
system, but when they come to the hotel, they cannot find their reservation and payment.
This tarnished the image of Malaysia as most independent travelers use online reservation
system to get their hotel in advance. Tabung Haji Hotel used to virtual portal, such as
Booking.com, Hotels.com, etc., and they to accept online reservation through this sites.
National and international travellers do reservation and pay easily with using this
sites.THHR won the '2014 Gold Circle Award' last year from Agoda.com after online users
voted it the four-star hotel of choice. Its acting CEO, Tuan Hj Adly Mohamed said in Kota
Kinabalu, guests described the rooms in the hotel as large, modern looking and clean. They
Over 86 per cent of the bookings received are online. They are proud to say that most of
our bookings are from guests overseas, some of whom are non-Muslims.
● Halal Restaurant: The encouragement for hotel to obtain Halal certificate for its restaurant
or F&B outlet is seen as a good one at the right time. Recently, Malaysian government
announced that only hotel with Halal certificate for restaurant can cater the government
functions. The effect of the announcement shows many hotels would like to obtain Halal
certificate as to not losing opportunities with the government events. Tabung Haji Hotel’s
has got Halal certificate and this move will boost Malaysia's image as one of top tourist
country among Muslim tourists for example from Middle East since their preferred tourist
destination change from holidaying in the West before to East nowadays, and Malaysia is
Besides providing halal food and beverages, THHR also provides a separate swimming
pool, sauna room and locker for women, as well as a separate entrance to the facilities. As
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for the gymnasium, male guests would be barred from entering while female guests are
using the facility. The hotels also provide in its room, among others, Quranic verses and
supplications, a copy of the Quran, a prayer mat and a schedule of prayer times. Guests also
need not worry that the complimentary bath set are made from animal ingredients that are
haram (unlawful) as every soap and shampoo is halal-certified by the Malaysian Islamic
● Market Potential: THHR offers over 700 rooms through its five hotels and will reach the
1000 mark when the Sepang Hotel and Convention Centre is launched next year. As the
hotels are relatively new, Adly admitted that every plan and promotion had to be creative
and appealing to the online community as most of the bookings were made online.
THHR is confident that with the right marketing technique, the hotel chain would
continue to expand and become the choice of not only Muslims but others as well. It is
expecting to come up with up to 10 more hotels in the next four years before expanding
overseas.
Islamic tourism is a large and growing market. According to the Thomson Reuters report,
the global Islamic spending on outbound tourism stood at $140 billion in 2013 [excluding
Hajj and Umrah], representing a 12 per cent of the world’s tourism market. The overall size
of the Islamic tourism market is estimated to be quite large, considering that more than one
million people undertake the Hajj pilgrimage each year to Makkah. The growth in Islamic
tourism has been well supported by the rapid rise in Muslim population and the propensity
of Muslims toward travelling, not only for religious purpose, but also for visiting family and
friends.In addition to the religious principles of Islam, which encourage travel, Islamic
tourism supports other Islamic services. For instance, the travel segment provides flights
where no alcohol and pork are served, prayer timings are announced, and religious
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programmes are broadcast as part of the entertainment offered on board.
In the hospitality segment, hotels in many destinations across the globe provide separate
swimming pools, dining, and spa facilities for men and women. For instance, the
Ritz-Carlton offers Quran, prayer carpets, halal food, and bidets at select locations as part of
its strategy to cater to the global multi-cultural travellers. These supporting factors have
appealed to the religious sentiment of the Muslim population, thus aiding and encouraging
Islamic tourism.
Apart from Arab nations, countries such as Australia, India, Malaysia, and Turkey are
also making efforts to attract Muslim tourists by offering facilities in accordance with
Islamic religious beliefs. Malaysia, a favourite Muslim tourist destination, has taken
numerous measures such as developing the Halal Master Plan (2008–20), hosting the first
OIC Global Islamic Tourism Conference and Exhibition, and establishing the Islamic
Tourism centre (ITC), coupled with the nation’s multi-cultural setting, cuisine, and heritage,
3.CONCLUSION
regulations which lead to new and old hotel dilemma, minimum room charged rate at USD80 and
also tax incentive in renovation of old hotels and human resource management especially on
employee motivation and shortage of labour and lastly, on hotel operations (concierge). Among the
issues found in this study are firstly, increasing demand on Green hotel, secondly, hotel restaurant
in getting Halal certificate and lastly, the usage of technology specifically online reservation
system. Competition in hospitality is stiff at national level, it is also very hard in the region of
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Southeast Asia hence, and Malaysian government has to stay alert and provide solutions to the
challenges hotels faced for example, give more attractive tax incentive to improve old hotel's
facilities, universities and colleges should create awareness on hotel working environment for fresh
graduates so as to improve labor shortages and supply of highly skilled employee in hotels,
government need to look back at the minimum room charges and raise it at the acceptance level at
par with the international rate. Some issues mentioned above require attention from the specific
government agency like Jakim on the Halal certification issues and MOTOUR to improve on
legislation of online reservation system in Malaysia. Addressing these issues and challenges will
make Malaysia as a top in the list of the chosen destination for tourist internationally.
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ABBREVIATIONS
HR Human Resources
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