Meliá Group expands in Southeast Asia

WHEN Gabriel Escarrer opened his first hotel in Palma de Mallorca, Spain, in 1956, it was the starting point of Meliá Hotels International’s growth. After almost six decades, the group has over 370 hotels in 40 countries in four continents. The company has many brands under its umbrella — Meliá, Gran Meliá, ME by Meliá, Paradisus, INNSIDE by Meliá, TRYP by Wyndham, Sol Hotels and Club Meliá.

“It has been a good 25 years since Meliá entered Malaysia with Meliá Kuala Lumpur. We are happy to have added two more projects into our Malaysian portfolio, five-star Meliá Iskandar Malaysia and four-star INNSIDE Iskandar Johor,” Meliá Hotels International regional senior vice-president Asia-Pacific Bernardo Cabot (pictured, below) tells City & Country during a phone interview.

Meliá Iskandar Malaysia is the first five-star hotel in Nusajaya, Iskandar Malaysia. Meliá Hotels International will also build a 150,000 sq m convention centre, the largest in Johor, between the two hotels. Construction is slated to start next year and completion will be in the first half of 2019.

“Nusajaya is a strategic location for us to expand our brand in Malaysia … right between Singapore and Johor. We are looking to cater for every segment of our target market — from leisure trips to business functions. Not only are we looking to cater for Malaysians, we are looking to cater for the Singapore market as well,” says Cabot, who has more than 20 years of experience in management positions in the hospitality industry.

“Meliá Iskandar Malaysia has 450 rooms and caters for visitors who are looking for our world-renowned traditional European hospitality. It offers a high standard of Spanish heritage and treatment. It is definitely a good option for those who are looking to hold business functions.

“The Singapore market is busier and average rates of the hotels there are higher as well. Meliá Iskandar Malaysia is a venue they can consider instead … Guests can use the convention centre for meetings, conferences and exhibitions,” adds Cabot.

Four-star INNSIDE Iskandar Johor has 350 rooms and offers a light and vibrant ambience. “INNSIDE will appeal to all ages, especially the younger generation, who are looking for a relaxing holiday with their friends or families … to come together to have a good time.”

Among the facilities that will be available in the hotels are restaurants, a lounge spa, fitness centre and swimming pool. Also being planned is a major shopping centre.

Connectivity and convenience

The hotels are centrally located, with Nusajaya being one of the stops identified in the Kuala Lumpur-Singapore High Speed Rail project (HSR). “Our hotels are located less than an hour from both the airports [Changi and Johor], and upon the completion of the HSR project, travelling for both Malaysians and Singaporeans will be eased extensively,” says Cabot.

“When visitors do not have to worry about the travelling bit, on how they are going to get to one place or another, it makes a world of difference. Not only is the convenience important, the efficiency in travelling and the amount of time saved with the HSR project are definitely added advantages for our visitors,” adds Cabot.

The proposed HSR line is an initiative by the Malaysian and Singaporean governments to connect Kuala Lumpur and Singapore. The line has seven proposed stops in Malaysia — Kuala Lumpur, Putrajaya, Seremban, Ayer Keroh, Muar, Batu Pahat and Nusajaya — and ends in Singapore’s Jurong East. The journey will take only 90 minutes.

“The HSR and interstate rail (Thomson-East Coast Line in Singapore) will enhance greater mobility between the neighbours. Visitors and cross-border businesses [in Johor] are expected to increase. With the lower cost of living and doing business in Johor/Malaysia, it is envisaged that Singaporeans and tourists crossing the Causeway will increase, especially with the new and convenient transport,” says Knight Frank Malaysia executive director Ricky Lee.

The completion date of the HSR has been deferred from 2020 to 2022. JS Valuers director of research and consultancy Chan Wai Seen says it is too early to say if the delay will impact the hospitality industry in Iskandar.

“We see favourable demand for hotels in Nusajaya, spurred by various tourist-related developments such as Legoland and other theme parks, and other interesting developments such as EduCity, Kota Iskandar and Southern Industrial and Logistics Clusters (SiLC),” he says.

“I think most of the upcoming hotel projects have been planned to cater for the existing demand or demand in the foreseeable future. In fact, when the various tourist projects and stimulating projects, or better known as Economic Transformation Projects, were completed, limited new hotel projects were introduced to cater for the increasing demand. At that point of time, most of the high-end hotels in the Iskandar region were actually old hotels. Now, we see the hospitality property sector catching up,” adds Chan.

Knight Frank’s Lee acknowledges that there will be stiff competition in the hotel industry in the mid to long term. Not only are there Legoland Malaysia Resort Hotel, Hotel Jen and Somerset@Puteri Harbour, at least eight hotels are scheduled to open in the next three to four years.

“However, with sustained development in Nusajaya and Greater Iskandar, the hotel and hospitality sector should enjoy good growth, at least up till 2025, when Iskandar is scheduled to be fully developed.

“The ongoing catalyst developments, continuous influx of visitors to the various theme parks and business activities at the various industrial parks — PTP, EduCity and the proposed international Motorsports City in Gerbang Nusajaya — will create demand for hotel rooms in Nusajaya,” adds Lee.

“The ‘overcrowded’ situation will be more apparent during an economic slowdown. Old and poorly managed hotels will be the worst affected if this happens,” says Chan.

Positive about the tourism industry

In terms of the current economic situation in Malaysia, Cabot is positive about the tourism industry. “We have colleagues in every corner of the world, from Africa to America. The economic state of these countries go up and down. While one country may be at its best, another may not. Every country has its ups and downs,” he says.

“We know that Malaysia is bouncing back now. We are really excited about it. We have been in Malaysia for over 25 years and we are definitely confident about the tourism sector. We can’t focus on short-term circumstances that yield short-term results. We need a development strategy in the long term.

“Kuala Lumpur is always a priority. We are currently 50% into the renovation works at Meliá Kuala Lumpur and we are targeting to complete it by September next year. We are also looking at the possibility of bringing three more brands to Kuala Lumpur — Grand Meliá, ME by Meliá and INNSIDE by Meliá,” says Cabot.

The group is also looking to venture into Penang, Ipoh, Kuantan, Kota Kinabalu and Kuching.

“To us at Meliá, it is not about the numbers. Instead, we are looking at long-term sustainable growth. The focus is always to provide the best quality products to our guests — with a distinct European flavour and the Spanish touch. We want to offer our international hospitality, yet at the same time, incorporate a local understanding of the country. What international companies want to achieve is provide their guests with their world-class hospitality, yet when their guests wake up in the morning, they do so knowing that they are in Malaysia, or Spain or New York. This is why we need to work with our local partners,” says Cabot.

“We are also very committed to fulfilling our responsibility to the Malaysian community. Once the hotels open, we will look to develop talents. There will be jobs and career development opportunities for over 1,000 employees,” says Cabot.

He is very enthusiastic about his expansion plans and the many places in Southeast Asia where he wants to take the Meliá brand to. In fact, Meliá Hotels International is opening 17 hotels in Asia-Pacific in the next four years. “By next year, we will have eight hotels in Myanmar, China, Indonesia and Vietnam. They include Meliá Yangon in Myanmar, Meliá Shanghai in Hongqiao, China, INNSIDE Legian in Indonesia and Sol House Phu Quoc in Vietnam.

“To our local partners, let us join forces to uplift the tourism industry. We can do a lot together when we do it hand in hand,” Cabot concludes.

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This article first appeared in City & Country, a pullout of The Edge Malaysia Weekly, on Nov 16, 2015. Subscribe here for your personal copy.