KUCHING: Hotels in Sarawak have sustained their operations during Covid-19 pandemic by turning them into quarantine centres.

       Most hotels in Kuching would have closed if not for the lifeline offered by the Sarawak government to operate as quarantine centres as visitor arrivals into Sarawak had dropped drastically, according to CBRE/WTW Research.

       The number of visitor arrivals in Sarawak plunged by 86% to 160,266 in the first 11 months of 2021 from the same period in 2020 due to the ban on inter-state travel and movement restrictions.

       In 2019, Sarawak recorded more than 4.66 million visitor arrivals.

       “Hotels sustained by operating as quarantine centres with average occupancy hovering around 30% for the first three quarters of 2021. Three-to five-star hotel managed to record an average room rate of RM150, the rate subsidised by the state government for Sarawakians returning home (to undergo quarantine),” said CBRE/WTW Research in its Malaysian Real Estate Market Outlook 2022 report. (The Sarawak government foots the hotel bills of Sarawakians undergoing quarantine and they are also provided with complimentary meals).

       According to Sarawak Tourism, Creative Industry and Performing Arts Minister Datuk Seri Abdul Karim Rahman Hamzah, the state government had since September-2020 paid an average of about RM15mil every month to the operators of hotels which served as quarantine centres.

       Designating hotels as quarantine centres was part of the state government’s efforts to help the hotel industry which is badly hit by the pandemic.

       Hotels also adapted their food & beverage department to offer take-outs and delivery services akin to other normal food outlets.

       Similarly, selected hotels in Sarawak’s other major towns – Miri, Sibu and Bintulu – are also used as quarantine centres for Covid-19.

       Based on WTWY Research, Kuching has nearly 7,000 hotel rooms.

       Last year, two new hotels opened their doors for business.

       They are the 160-room Serapi Verdure Hotel which is part of the refurbished Sarawak General Hospital catering mainly to out-patients and the family members of patients, and the 148-room Regatta Suites at the LD Lagenda building located adjacent to the hospital.More guest rooms will be added when the 19-storey Promenade Hotel (under the Promenade hotel chain) in the Kuching central business district is completed this year.

       Besides, Hotel 56 along Jalan Tun Jugah is currently constructing a new wing.

       In Miri, CBRE/WTW Research said selected hotels are used as quarantine centres especially for offshore workers who are required to undergo quarantine before and after their offshore deployment in the oil and gas industry as well as other travellers coming into the northern region.

       “The average occupancy rate of Miri hotels hovered around 30% with hotels used as quarantine centres having higher occupancies of around 50% to 60%. With Brunei still closing its borders, Miri, which had largely depended on Brunei visitors, saw a drastic drop in hotel occupancies,” added the report.

       The average room rate for three-star hotels in Miri was RM105 to RM240 per night in 2021 (2019: RM165 to RM400); four-star hotels was RM110 to RM360 (2019: RM175 to RM485) and five-star hotels RM190 to RM888 (2019: RM320 to RM800), according to WTWY Research.Two major hotels are under construction in the oil city – a 20-storey hotel by diversified group Shin Yang Sdn Bhd and the 15-storey Mercure Hotel. Both projects have been delayed.

       In Sibu, CBRE/WTW Research said most of the star-rated hotels were occupied as quarantine centres, resulting in a sustainable occupancy rate albeit at lower average room rates.

       “As Sibu is not the main tourist destination and is highly reliant on domestic demand, hotels were relatively less affected by the pandemic. Room rates are expected to continue to be lower owing to the need to offer attractive rates to attract more guests.

       “The trend of budget hotel to cater more to local business travellers will continue,” it added.

       The average room rate of three-star hotels in Sibu in 2021 was RM150 to RM500 (2019: RM180 to RM500).

       In Bintulu, most hotels are also occupied as quarantine centres with the daily room rate of RM150.

       “Hotels which have seen improved occupancies during this period is forseen to revert to normal (lower than 50%) in 2022 with the reduction in Covid-19 cases requiring quarantine,” said the report.

       On the market outlook for Sarawak hotel industry, CBRE/WTW Research said it is expected to slowly pick up as the state now is in recovery mode.

       The federal government has decided that Malaysia opens its border from April 1 which is expected to help in the recovery of the tourism industry, and boost visitor arrivals.