MARKET FEASIBILITY STUDY
SECTION III: SUPPLY AND DEMAND ANALYISIS
Permohonan Kelulusan Kebenaran Merancang Bagi:
Cadangan membina dua (2) blok (1468 unit) perumahan rakyat
mampan yang terdiri daripada
Permohonan Kelulusan Kebenaran Merancang Bagi:
Cadangan Membina Dua (2) Blok (1468 Unit) Perumahan Rakyat
Mampan Yang Terdiri Daripada:
1- Blok A:
A) Blok A1: 279 Unit Pangsapuri 36 Tingkat
B) Blok A2: 186 Unit Pangsapuri 36 Tingkat (18 Unit Podium &
168 Unit Menara)
C) Blok A3: 269 Unit Pangsapuri 32 Tingkat (30 Unit Podium &
239 Unit Menara)
2- Blok B:
A) Blok B1:279 Unit Pangsapuri 36 Tingkat
B) Blok B2: 186 Unit Pangsapuri 36 Tingkat (18 Unit Podium &
168 Unit Menara)
C) Blok B3: 269 Unit Pangsapuri 32 Tingkat (30 Unit Podium &
239 Unit Menara)
3- Sebuah Podium Tempat Letak Kereta 7 Tingkat
4- 14 Unit Ruang Kedai Satu Tingkat
5- Sebuah Surau 1 Tingkat
6- Sebuah Dewan Serbaguna 1 Tingkat
7- Satu Unit Rumah Sampah Berpusat Satu Tingkat
Di Atas Lot 55961 (Pt 7243), Lot 55964 (Pt 7246) Dan Lot 118771
(Pt 9110), Bandar Tun Razak, Mukim Dan Daerah Kuala Lumpur, untuk
Projek Usahasama Antara: Tetuan Dewan Bandaraya Kuala Lumpur Dan
Tetuan Retro Highland Sdn BhdSection III: Supply and Demand
Analysis
COMPETITIVE HOTEL SUPPLY
In order to assess room night demand for the proposed hotel
development, AS2 CONSULT SDN BHD identified a competitive set of
properties in the proposed hotel development area based on
published room rates, level of service, amenities and location. All
hotels in the competitive set are considered primary competitors of
the proposed development. The properties used in our analysis are
listed in the table below and shown on the map on page III-8.
Selected Competitive Set Properties
NoPropertiesNumber Of Available Rooms
1City Bayview Hotel282
2Eagle Bay128
3Hotel Langkasuka168
4Langkawi Seaview139
5Hotel Helang218
Source: AS2 Consult Sdn Bhd
Isle of Wight County, VA
COMPETITIVE SET
Following is a brief description of each property's amenities,
location and probable market segmentation.
City Bayview HotelLocated in the heart of the commercial
district of Kuah town, 5 minutes from the jetty and only 25 minutes
from the airport. It is at walking distance from the seafront and
shopping area as well. The hotel is designed to accommodate the
demands of both leisure and business travellers alike wih its
understated luxury and amenities.The estimated market segmentation
for this property is 55 percent business and 45 percent
leisure.
Eagle Bay
The Eagle Bay Hotel is a 3 star hotel. It is situated in the
heart of Kuah Town, Langkawi's town centre and only 2 minutes drive
from Kuah Jetty and 25 minutes drive from Langkawi International
Airport, within walking distance to all the duty free shops, the
Langkawi Fair shopping centre, many restaurants, Banks, tourist
information centre, car rentals and taxis. Three of Langkawi's most
prominent landmarks are right in front of the hotel like CHOGM
Garden, Eagle Square and Lagenda Park with its long stretch of
white, sandy beach. The budget hotel accommodates business
travellers, families as well as budget travellers. The lobby is
nicely decorated with Malaysian style handicrafts and some of the
rooms also have Malaysian style features. They are well equipped
with colour TV, IDD telephone, air-conditioning, pipe-in music,
small refrigerator/mini-bar filled on request and the bathroom has
a bathtub with shower head. A small outdoor spa swimming pool with
swim jets that provides a body massage offers relaxation after a
day of shopping or sight seeing.The estimated market segmentation
for this property is 65 percent business and 35 percent
leisure.
Hotel Langkasuka
The two star Hotel Langkasuka is located right in the heart of
Kuah Town on the legendary Island of Langkawi. Conveniently located
about 5 minutes from the Kuah Jetty and 30 minutes from the Airport
it is easily reached by car within a short time. It is and
inexpensive Hotel for businessman, leisure travellers, tourists and
shoppers. Hotel Langkasuka are furnished in simple elegance with
double or twin beds, for total comfort. The room facilities
comprise of electronic keypad doors, colour television, IDD
telephone and complementary coffee and tea making facilities. 24
hours security, a safe deposit box as well as free parking are also
one of the advantages.
The estimated market segmentation for this property is 45
percent business and 55 percent leisure.
This property is not considered to be a primary competitors.
Langkawi Seaview Hotel
Located in Kuah Town only 5 minutes from Kuah Town with the
Teluk Baru Ferry Jetty and 30 minutes drive from Langkawi
International Airport the Langkawi Seaview Hotels is the ideal
place for business travellers and tourists. Being in town Langkawi
Seaview Hotel is within walking distance to all the major duty free
shopping areas, the Langkawi Fair Shopping Centre and many smaller
shops, souvenir markets and restaurants.
The Hotel features rooms in different sizes and prize range. The
hotel is the ideal choice with its low prices and a taste of
luxury. Each of the rooms is furnished with double or King size
beds, TV-set with in-house movies, individually controlled
air-conditioner and balcony. Most of the rooms have a beautiful
view out to the sea, the Marina and the bay.
A roofed swimming pool on the second floor with an attached pool
Jacuzzi, surrounded by comfortable sun beds and big lush green
flower pots, invites guest to relax and get a nice tan.
The estimated market segmentation for this property is 60
percent business and 40 percent leisure.
Hotel Helang
Ideally located within walking distance to the Langkawi
International Airport and the Masuri International Exhibition
Centre (MIEC). It is currently being Langkawi's premier convention
hotel, features eight conference rooms of which one is suitable for
200 people complete with an extensive range of audio visual
equipment for various kinds of events. The other meeting rooms come
in different sizes to cater different businesses and functions. On
an area of 71,400 square meters, the hotel and the MIEC which is
within walking distance are able to cater up to 3,000
participants.
It offers a beautiful swimming pool next to the restaurant
terrace, a games room which provides pool table, dartboard and
board games like Mahjong, Cyber Cafe with Internet as well as a
private beach in the nearby sister hotel Langkasuka Beach
Resort.
The estimated market segmentation for this property is 68
percent business and 32 percent leisure.
This property is being considered as the primary and major
competitor to the proposed hotel development projectAddition to
Supply
Based on our field research and interviews with local government
officials, business and tourism organisations, there are no planned
additions to supply within the masket drawing area at this
time.
HISTORICAL PERFORMANCE OF THE COMPETITIVE SUPPLY
The aggregate average annual available and occupied rooms and
resulting occupancy levels, for the competitive supply from 2005 to
2008 are presented in the following tables.YearAnnual Room
SupplyTotal Room Nights OccupiedAnnual Occupancy
2004--58.8% (a)
2005--60.2% (a)
2006--58.6% (a)
20076323 (c)408564.6% (a)
20087385 (c)479364.9% (b)
Notes: (a) - Source - MOT
(b) - Source - AS2 Consult S/B
(c) - Source - LADA
Between 2005 and 2007, occupancy levels at the hotels in Kedah
steadily increasing from 58.8% in 2004 to 60.2% in 2005. Please
note that the occupancy rate for 2006 was set at only 58.6% due to
global economic climate but shot up to 64.6% in 2007.As can be
noted in the table above, total occupied rooms nights experienced
only a slight increases from 2007 to 2008 with an annual growth
rate of 0.03% but the addition to supply of rooms for the same
period increased signifantly at 16.8%. This displays the attributed
of demand in the market of the proposed project area.
SEASONALITY
AS2 Consult has analyzed the subject market to determine its
seasonality with regard to room
night demand. Based on information obtained during field
research and statistics from LADA, the market experiences peaking
of Foreign and International demand for the year 2008, during the
months of January untill March and between June and August.
The domestic demand peaks in the months of May, November and
December and the lowest being in the months of January and
September.
MonthsJanFebMarAprMayJunJulAugSepOctNovDecTotal
Foreign11.4%12.5%11.2%7.8%6.2%8.4%11.5%9.9%5.5%5.4%4.45.7100%
Domestic5.9%8.1%8.5%6.4%10.1%8.7%6.7%8.7%3.8%8.7%9.3%15.3%100%
Total17.3%20.6%19.7%14.2%16.3%17.1%17.2%18.6%9.3%13.1%13.7%21.0%
In overall, total demand, except for the months of September, is
almost always constantly available throughout the year, in-line
with holidays and major events held on the island.SEGMENTATION OF
HOTEL ROOMS' DEMAND
Leisure Demand
Leisure demand consists of families, couples, and individuals
seeking vacation experiences including a weekend get-away or an
experience that is different and unique when compared to their
normal routine. Typically associated with vacationing, leisure
demand can encompass anything from an overnight festival attendant
to the extended vacationer. According to research conducted by the
International Travel Industry Association, approximately 66 percent
of all domestic travel in 1999 was leisurerelated.Seasonality is a
major factor when attempting to attract the leisure traveler. Peak
demand periods for the leisure traveler are expected during School
Holidays, Public Holidays and Long week Ends, as shown in the table
above. Typically, the months of January and September are slower
periods for leisure demand. The proposed hotel will need to promote
off-season recreation activities, packaging, and special events to
entice leisure travel demand. This period will be associated with
discounting in an effort to stimulate this demand.
Commercial Individual Demand
Commercial individual demand is generated by business people
traveling to or through the area to complete some facet of
business. This group typically is the least price sensitive of the
demand segments in that they are usually reimbursed for their
expenses. They include business representatives, corporate
trainees, interviewees, sales representatives, contractors and any
other business associated traveler. This segment is expected to
represent a smaller portion of demand to the proposed property due
to the non-presence of large corporations in the proposed hotel
development area .Group Demand
Group demand is generated by associations, government, and
business groups, which hold meetings, corporate retreats/outings,
and conferences. This segment includes groups (10 or more people)
who reserve guestrooms typically with meeting/conference space,
food and beverage. Expected sources of group demand include
corporate groups, associations, non-profits, and a limited number
of government groups.Research compiled by AS2 CONSULT S/B, indicate
that group demand is most concentrated in the months of March,
April, May and through November. The first 2 months of the year are
usually somewhat slower for group demand due to the high incidence
of vacations and the inability of groups to ensure participation by
key individuals.
Groups typically receive some of the lowest room rates offered
as the result of volume purchasing. In addition, group demand
peaks, as described above, occur during shoulder seasons, a period
when properties begin to offer incentive discounting.
DEMAND DESCRIPTIONS
Interviews conducted with local government officials, tourism
organizations, and area commercial establishments indicated that
different variations of demand exist within the primary market
area. In general, demand for hotel rooms can be categorized as
demonstrated demand, induced demand, and unsatisfied demand. AS2
CONSULT S/B estimates that all three exist within the market area
to certain degrees. Following is a brief description of each type
of demand and how they relate to the subject property
market:Demonstrated Demand: Demonstrated demand is demand that is
already captured by the competitive hotels. Currently, the
competitive supply captures demand from primarily two of the three
segments previously mentioned: commercial individual and leisure.
Commercial individual demand comes from the large demand generators
as stated in the Demand Generators listing within and surround the
area.
Induced Demand: Induced demand is the demand that does not
presently seek accommodations in the competitive market, but could
be persuaded to do so as a result of increased market capacity
through marketing efforts, room rates, facilities, services and
amenities.
AS2 CONSULT S/B estimates that there is potential to generate
induced demand from all three segments (commercial, leisure, and
group) with the leader being the group segment if the number of
rooms increase in the subject market area. In addition to the
demand generators already participating in the market, the hotel's
large ballroom may prompt interest to use accommodations too.
Unsatisfied Demand: Unsatisfied demand is the demand that seeks
accommodations in the market but is not satisfied due to any one or
more of a number of factors: sell-outs during peak season; lack of
a particular type of accommodation; lack of meeting space; or high
room rates.In the case of the subject market area, any unsatisfied
demand is primarily a result of a limited number of a particular
type of accommodations and lack of meeting space. An increase in
market supply of full service guestrooms can facilitate the
accommodation of this kind of demand. AS2 CONSULT S/B estimates
that with the new proposed hotel development, unsatisfied demand
for group room nights will increase as interest in the Seri
Malaysia Hotel Chain increases. The induced demand as illustrated
above will be forced to seek accommodations elsewhere or hold
meetings in other areas due to the lack of rooms. The proposed
hotel could focus its bookings on events that require limited
overnight accommodations such as company holiday parties, large
company meetings, and weddings.SUMMARY OF DEMAND GROWTH AND MARKET
OCCUPANCIES
For the purpose of this analysis, AS2 CONSULT S/B has projected
demand growth and market occupancies to the current market supply
with the the construction of a new, free standing, 305-room full
service hotel. AS2 CONSULT S/B estimated that the addition to
supply would accommodate some of the current unsatisfied demand and
possibly generate induced demand.
Using the historical growth in the market as a base, and taking
into account the current demonstrated and projected economic
conditions in 2010, we have estimated future growth in overall
market demand as outlined in the tables below:
YearAvailable RoomsOccupied RoomsPercentage Of Occupied
RoomsMarket Occupancy
2010101,87035,68550.0%64.9%
201111132567,90861.0%65.5%
201211132570,13563.0%66.1%
Note: Hotel is expected to commence operation in February 2010
for a period of 11 months only
Average daily rate is estimated to increase at levels approved
by the Franchaisor, Rangkaian Hotel Seri Malaysia.
SECTION IV: SITE SELECTION ASSESSMENT
PROPOSED HOTEL
HOTEL XXXX XXXXXXXX XXXXXXX LANGKAWIMARCH 10, 2009
Section IV: Site Selection Assessment
SITE EVALUATION
AS2 CONSULT S/B identified and concurs that the site for the
proposed hotel development shows potential for development as
illustrated by the map below. As mentioned previously, hotel
properties are generally located near major demand generators such
as the tourist attractions center. The area that was most
comparable to this profile was Mutiara Damansara in Petaling Jaya.
The site was evaluated based on potential for expansion, access,
visibility, and relationship to demand generators.
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