Far East opens Dorsett hotel in Georgetown

HONG Kong's Far East Consortium International has opened its Dorsett brand hotel in Georgetown, Penang, following the takeover of the management contract from Sheraton.

This is Far East's second Dorsett hotel in Malaysia and ninth hotel internationally.

The new management, which took over effective April 1, will see the operator testing the market for about a year before it considers buying the property.

The four-star Dorsett Penang includes a 237-room hotel and a 20-floor commercial building called Penang Plaza, which has an estimated value of RM60 million.

"We started operating as Dorsett Penang on April 1. When Tan Sri David Chiu ( Far East's deputy chairman) bought over Subang Sheraton, the owners offered to sell Sheraton Penang," Dorsett Penang acting general manager Hadi Yusuf said.

"We don't want to buy it yet. We want to analyse the ( Penang) market first. We will give it about a year before we consider buying the property," Hadi told Business Times in an interview.

This is the first hotel property that the Far East Group is managing and does not own. The hotel is owned by Faber Kompleks Sdn Bhd.

The 22-year-old hotel, which was first the Merlin and later the Sheraton, is said to be a profitable entity.

It sees almost 70 per cent of occupancy business from the corporate world and enjoys a 65 per cent total occupancy and an average room rate (ARR) of RM160 per night.

The hotel hopes it will be able to reach the island's 68 per cent average occupancy and RM165 in ARR by year-end.

On the rebranding of the hotel, Hadi said any new management company will want a fresh look for the new identity.

He indicated that plans to rebrand would be in line with its aim to improve its market share and grow profitability.

Dorsett Penang will be positioned as a four-star hotel with five-star service, which Hadi admitted would pose a challenge.

Once the hotel has completed the rebranding exercise and some minor works, Dorsett is aiming to achieve 75 per cent in average occupancy and an ARR of RM173.

"We aim to do well and be the market leader of four-star hotels in Penang," he said.

Meanwhile, the four-star Dorsett Regency Kuala Lumpur achieved an average occupancy of 80 per cent and an ARR of RM160.

"We have always enjoyed healthy occupancy. Even during the SARS time (Severe Acute Respiratory Syndrome) our hotel occupancy was good," its general manager Christina Toh said.

"We hope to grow our rates by RM20 to RM180 this year and continue to achieve 80 per cent occupancy," Toh added.

This 10-year-old hotel is currently undergoing a RM5 million renovation and refurbishment exercise.

"We complement the five-star hotels in the vicinity. If the big bosses stay at the five-star hotels, their managers stay here. We also enjoy the spillover from major conferences and conventions. Plus, we are located in the shopping belt," she said on the positioning of the hotel.

Dorsett Regency enjoys a gross operating profit (GOP) of 45 per cent and managed to post net profit for the past four consecutive years.

GOP is the cost of doing business or gross revenue (from rooms, food & beverage, laundry or business centre) minus cost of operations (wages, electricity and amenities).