AC Issue

ASIA CONNECTS THE VOICE FOR SME & ENTREPRENEURS

ISSUE NO. 4 APR-JUN 2022

For Internal Circulation Only

THE NORTHERN EDITION DAVID ST LOH

Clicking the pieces of Fine Art Photography in place

DATO’ DENNIS CHUAH

Eclimo’s bumpy journey in building the electric scooter

KNIGHT FRANK

Uneven recovery in the property market

CHAIRMAN’S NOTE

ADVANCING NORTHERN REGION ENTREPRENEURS ON THE PATH TO ENDEMICITY

Nitesh Malani Founder, Yayasan Usahawan Malaysia

Malaysia will transition to the endemic phase of Covid-19 on April 1, with all restrictions on business operating hours lifted, allowing companies to move forward faster and with greater vigour. The transition to endemicity and the full reopening of Malaysia’s borders are expected to bolster economic growth while also revitalising the tourism sector, which has been dormant since 2020.

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An unexpected ray of hope has arisen amid the pandemic’s economic devastation: an increase in entrepreneurial talents. This increase in entrepreneurship can be seen most prominently in the Northern Region, where the state

government is working hard to foster the growth of youth in expanding and growing the northern region’s economy.

We want to recognise and nurture local talents who have succeeded in their fields. We want to assist them in advancing to the next tier: the national tier and, hopefully, the international tier. Yayasan Usahawan Malaysia chose the Northern region as the theme for Asia Connects e-magazine fourth edition as it aligns with the state government’s Penang 2030 initiatives which lay the groundwork for a resilient post-Covid-19 community.

Yayasan Usahawan Malaysia is honoured to serve as

a conduit for promoting entrepreneurship and business. Each state has its own set of resources, and thriving industries like tourism, mining, agriculture, and manufacturing have suffered significant losses due to the pandemic. As a result of the devastation caused by the pandemic, it is more important than ever to support entrepreneurs in areas where existing and evolving solutions can be leveraged to promote and stimulate further growth.

Yayasan Usahawan Malaysia will continue supporting and collaborating with the government to assist current and future entrepreneurs from the Northern Region and beyond.

EDITOR’S NOTE NORTHERN REGION’S TURNING POINT

The Northern Region is well-known for its local delicacies and tourist attractions, but it is also a haven for entrepreneurs in the mining, agriculture, and manufacturing sectors. All of which have suffered greatly as a result of the pandemic.

This issue features successful northern region entrepreneurs and businesses who have defied all odds to succeed in industries such as tourism, arts and photography, transportation, and more. Many successful entrepreneurs and businesses have emerged from the northern region. Read the learning curve of hospitality elite Dato’ Sri Shaheen Shah and Eclimo’s Dato’ Dennis Chuah undoubtedly bring lifelong values. Awardwinning photojournalist David ST Loh and partner Rebecca

Rachel Khiew

Lee share their Penang journey after being abroad for years.

The pandemic may have halted the northern region’s economy. As we move into the endemic phase, it is now time for you to fill in the blanks of the valuable lessons and experiences you have learned throughout the last two years.

Through The Asia Connect platform, Yayasan Usahawan Malaysia hopes to amplify the voices of Northern Region entrepreneurs and businesses navigating the endemicity. I am confident that the northern region will continue to thrive as a community of engaged Malaysian entrepreneurs.

Continue to soar while remaining safe and healthy.

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NORTH STARS The Northern Region of Malaysia builds a future to watch

Just the thought of the Northern Region of Malaysia could make mouths water.

And not just because the region is home to flavourful local food. The region also represents a juicy slice of the Malaysian economic pie, making up 15.8% of the country’s GDP in 2018, according to the Northern Corridor Implementation Authority (NCIA).

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The feast is growing bigger. In 2007, the NCIA launched the Northern

Corridor Economic Region (NCER) to drive initiatives and investments that will advance economic growth, intending to help the region achieve equitable prosperity with the rest of the country.

The NCER spans the four states – Perlis, Kedah, Penang and Perak – with a total population of 6.8 million. As of December 2020, it has brought in a cumulative investment of RM129.1 billion and created 164,885 jobs, according to NCIA.

HOW IT ALL BEGAN Before the NCER, the Northern Region was already a magnet for international giants and home-grown ventures alike, creating an ecosystem that has long shaped the nation’s trajectory.

Following Malaysia’s declaration of independence in 1957, the country gradually shifted from relying on agricultural and primary commodities like rubber and wood, emphasising export-

also came to be known as Malaysia’s Silicon Valley,” wrote Yeow and Ooi. “With the successful implementation of the FIZs in Bayan Lepas, an area in Prai on the mainland was gazetted as a FIZ. Other states in Malaysia were also drawn to Penang’s early success in attracting FDIs to the designated zones and similarly set up FIZs in their respective states.”

oriented industrialisation.

Penang rode the wave by proposing a Free Trade Zone (FTZ) to draw foreign direct investments (FDIs) in export-oriented industries and generate jobs, according to researchers Yeow Teck Chai and Ooi Chooi Im in their paper The Development of Free Industrial Zones: The Malaysian Experience published by the World Bank.

In 1972, Bayan Lepas in Penang became Malaysia’s first Free Trade Zone

(now known as the Free Industrial Zone, or FIZ). With attractive incentives from the government, the FIZs drew eight multinational companies (MNCs), including Agilent Technologies Sdn Bhd, Fairchild Semiconductor Sdn Bhd, and Intel Malaysia Sdn Bhd. Among the perks of FIZs are minimal customs control and duty exemptions.

“The presence of these MNCs formed the nucleus of the electronics industry cluster in the country, which later

E&E EXPLOSION The fervent industrialisation in the Penang Island since the 1970s spilt across the Northern Region of Malaysia.

The growing E&E industry on the Penang Island spawned the massive Batu Kawan Industrial Park on the mainland. The Kulim Hi-Tech Park (KHTP) in Kedah also opened about 50 km away from Bayan Lepas in 1996, with Intel as its first tenant.

Kamunting in Perak saw an inflow of manufacturing investments, especially in the rubber and medical devices sector. Perlis is also building a Chuping Valley Industrial Area as part of its plan to transform into a high-income industrial state.

In 2019, Penang is responsible for about 5% of global semiconductor exports, as The Edge Malaysia reported.

Its electrical and electronics (E&E) exports in 2020 totalled RM386.29bil or 39.3% of Malaysia’s total exports.

Penang’s Chief Minister Chow Kon Yeow also announced that approved manufacturing investments in 2021 shot to a record high of RM76.2 billion, from RM14.11 billion in 2020.

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Notably, Intel Corporation has committed to pump RM30 billion to upgrade its sites in Bayan Lepas and Kulim over the next 10 years.

Besides the lucrative investments and job creation, the influx of MNCs transfers technology and knowledge to their Malaysian employees.

It supports the growth of local SMEs as technology suppliers, according to Yeow and Ooi. Among local enterprises that have grown into international players via this route are Globetronics Technology Bhd and Atlan Industries Sdn Bhd. “The emergence of a group of MNCs that invest in the physical facilities and, more importantly, on the technical

capabilities of Malaysians, both employees and local vendors, albeit to support their ventures in Malaysia, has benefited the country in terms of technological investments.

The result is a structural change in Malaysia’s E&E industry from a labourintensive operation to one which is capital and technologyintensive,” they wrote.

BEYOND INDUSTRIALISATION The high-value activities sparked by tech industrialisation has bolstered the states to play to their strengths in attracting more investments and creating more jobs. One example is agriculture. NCER spans the ‘rice bowl’ of the country, providing over onethird of the paddy demand in Malaysia. Perak is also home

to one of the largest poultry industries in Malaysia, while Penang is the second largest aquaculture producer in the country. Perlis also boasts a 25-hectare superfruits farm – one of the largest in Southeast Asia – that has produced over 30 metric tonnes of fig, lemon and gac, on top of more than 15 downstream products like fruit juice and snacks.

Thus, NCER aims to fertilise the productivity and output quality of the agriculture sector. This includes adopting the Estate Management Model to increase paddy yield, developing organic paddy farming capabilities, improving superfruit seeds through research and development (R&D), and

ACHIEVEMENT OF ENTREPRENEURNCER IN 2019

72% Paddy

14%

7%

Agriculture Business (Non-paddy)

5%

Wholesale & Retail Business

2%

Other Services

Manufacturing Business

IMPACT OF ENTREPRENEURNCER BY STATE AS AT JANUARY 2020

PERLIS

396 2% 98% 96% 24%

Approved Loan Appliations SMEs Micro Enterprises Bumiputra Women Entrepreneurs

Targets by

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2025

KEDAH

1,144 2% 98% 96% 20%

Approved Loan Appliations SMEs Micro Enterprises Bumiputra Women Entrepreneurs

8,160

number of entrepreneurs

PULAU PINANG

244 27% 73% 74% 8%

Approved Loan Appliations SMEs Micro Enterprises Bumiputra Women Entrepreneurs

250

entrepreneurs from orang asli

PERAK

192 54% 46% 45% 15%

Approved Loan Appliations SMEs Micro Enterprises Bumiputra Women Entrepreneurs

5,200

jobs created

Source: https://www.ncer.com.my/empowering-the-rakyat/growing-enterprises/entrepreneurncer/

establishing an oyster seed production hub in Penang.

Besides feeding the nation, the Northern states of Malaysia are also known for their picturesque tourist destinations and rich cultures.

Both international and local visitors make a beeline for the beaches of Batu Feringghi in Penang, Pulau Pangkor in Perak and Langkawi in Kedah for plenty of fun in the sun.

History and culture buffs also bask in the UNESCOrecognised sites, such as George Town as one of the UNESCO Historic Cities of the Straits of Malacca, the UNESCO Archaeological Heritage of the Lenggong Valley and the UNESCO Global Geopark in Langkawi.

To leverage excitement for these holiday hotspots, efforts are underway under the NCER initiatives to develop the art and heritage tourism potential of Ipoh in Perak, and establish Pulau Pangkor as a niche duty-free retail and sustainable tourism destination.

THE ROAD AHEAD Suffice to say that the Northern Region of Malaysia is a hive of economic buzz.

As the interview features in this issue of Asia Connects magazine, the paved successes and planned progress for the region’s key industries bode well for both budding and established SMEs. Further catalysing business is the entrepreneur NCER, a programme to help microenterprises and SMEs reduce business costs.

The programme targets to nurture 8,160 entrepreneurs,

with 250 of them from the Orang Asli community, and create 5,200 jobs by 2025.

Yet, challenges lurk within these bright prospects. One issue is the engineering talent shortage, which may throw a spanner into the eager work of the region in upping its tech manufacturing and industrialisation game. As the Federation of Malaysian Manufacturers (FMM) Penang former chairman Datuk Jimmy Ong told The Star, a conservative estimate based on industry feedback showed a critical shortage of about 14,000 engineers nationwide, with approximately 6,000 needed in Penang.

Ong said that part of the reason is that the pandemic has caused production backlogs, and the surge in global demand meant that manufacturers are “in great

need of manpower”. Another reason, he points out, is that the growing number of MNCs entering the region have scooped up many engineers, leading to local companies losing their talents to these deep-pocketed giants. This is exacerbated by the low intake of engineering students in local universities and colleges.

The tourism industry is in the same boat. Knight Frank Malaysia, an independent real estate consultancy, has raised concerns about employee shortages in the hospitality sector.

Nonetheless, with investments pouring in and modernising its longstanding key sectors like tourism and agriculture, the Northern states of Malaysia – and the SMEs growing strength to strength in its ecosystem – are worth watching.

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CONTENTS

2 Welcome Message by Yayasan Usahawan Malaysia Chairman

3 Message by Asia Connects Editor

4 North Stars The Northern Region of Malaysia builds a future to watch

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22

Eclimo’s bumpy journey in building Malaysia’s first electric scooter

THE VOICE FOR SME & ENTREPRENEURS ISSUE NO. 4

APR - JUN 2022

Founder | Chairman Nitesh Malani Editor Rachel Khiew Contributors LM Foong Designer Kevin SJ Francis

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PR ESS & EDITOR IAL I NQUIR IES editor@theasiaconnects.com

ADVERTISI NG & PART NERSHIP I NQUIR IES marketing@theasiaconnects.com

10 David Loh Clicking the pieces of Fine Art Photography in place

14 Dato’ Sri Mohammed Shaheen Shah Mohd Sidek Langkawi sun peeks out for RIYAZ Hotels and Resorts after the pandemic storm

FOLLOW US ON

theasiaconnects company/theasiaconnects @theasiaconnects

Published by

18 Digitalisation SME digitalisation marches forward with Celcom Business

20 Edmund Yuen Ideal Vision sees a bright future for automated quality control inspections

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30 Knight Frank Malaysia The property sector in Malaysia sees Uneven recovery in 2022

© 2022 All rights reserved. The views/ opinions expressed in Asia Connects are those of the writer and not necessary the views/opinions of the publisher.

The publisher shall not be held liable for any errors, violations, omissions or inaccuracies. No part of this magazine may be reproduced without the written permission of MyPreneurship | Yayasan Usahawan Malaysia.

MyPreneurship | Yayasan Usahawan Malaysia, 4A Lorong Ma’arof 1, Bangsar Park, 59000 Kuala Lumpur, Malaysia.

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CL ICK I NG T H E PI ECES O F

Fine Art Photography I N PL ACE

David Loh has five jobs: aerial landscape artist, entrepreneur, author, gallery owner, and publisher. He juggles these passions with his wife, Rebecca Lee. Together, they run a photographic and marketing consultancy (Elaton Asia Services), a publishing house (Elaton Publishing), and a fine art photography gallery (David ST Loh Images) in George Town, Penang.

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With 30 years in the media industry – mostly attached to Reuters – as a photojournalist and editor, Loh is the creative backbone of the operation.

His decades of experience working with evocative photographs led to plenty of highs for the business, including the publication of Over Penang, an awardwinning pictorial book of his

aerial photographs across Penang that sold 2,000 copies within four months.

Their subsequent book, Simply Penang, showcased the vibrancy of Penang through its residents, festivals, arts and culture, and food.

Lee, on the other hand, handles the business operations and strategies.

It was a natural fit for the seasoned marketing practitioner who has also led the operations departments of several companies in Singapore, where the couple was based for a few years before returning to Malaysia.

Loh and Lee explain to Asia Connects how they built a multi-faceted photography business from the ground up and leverage it to benefit community causes:

AC: It must have been quite a leap to build a business that focuses on fine art photography in Malaysia.

How did you both decide to take this on?

Loh: We started Elaton in July 2018 to provide professional, quality, fine art photography.

Our photographer friends always tell us that it is impossible to sell fine art photographs constantly. We are lucky we are able to do that.

Lee: Elaton was established the same year that we returned to Malaysia after living abroad for over 20 years. The years away has made us bright-eyed and bushy-tailed in rediscovering Penang as we made it our base. We saw local demand for fine art photographic

prints as artwork through the fresh lens, but it was still a niche market, compared to the US and the UK, where the market has been well established.

Loh: In Malaysia, large wall art is common for commercial businesses, such as billboards.

But we saw the opportunity in wall art for private companies and homeowners as well. This is especially true during the Covid-19 pandemic – people are spending more time at home and are looking to transform their living spaces.

This is where Elaton fills the gap. Our specialisation is producing and installing highquality wall art that can go up to 10 metres of wall space.

We provide large, premium, panoramic, licensed and highresolution images that can be used to decorate a space,

creating a unique ambience.

AC: As you mentioned, fine art photography is still a niche space. How do you open up more opportunities for revenue and exposure?

Loh: Yes, we discovered that getting people to fork out money and appreciate fine art photography as much as they value paintings or sculptures is not a straightforward process. Just because you are good, or even the best, it may not sell!

Lee: The challenge of selling fine art photographs is that not everyone appreciates photography as art. It takes educating and spreading the knowledge about fine art photographs and limited editions. It also means we have to continuously think of

new ways to sell our images and offer complementing services to our customers.

This culminated in the opening of our gallery in early 2020. We established it to showcase our work in the form of wall art and digital canvases to help customers better visualise the various possibilities of fine art photography.

Our books, along with our limited edition photo prints, are still our most profitable arms. We often come up with innovative ways to distribute or customise the books. For example, we sell our Over Penang books at high-traffic businesses like cafes, restaurants, hotel souvenir shops, and even car repair workshops. We offer companies the ability to customise the dust cover of

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the book with their own image and messages at a fee. Beyond running a photography and videography service, we also hold workshops showcasing traditional crafts, such as shadow puppet making, traditional rice wine making, and structures in portraiture art. This is in line with the spirit behind our photography business, which is to preserve and conserve what’s around us, whether it is structural, natural or cultural. That is why, following Over Penang, we are now embarking on our ambitious Over Malaysia project, documenting our country’s nature, people, food, and more, one state at a time.

Moving forward, we have identified opportunities to expand our business in fine art storage, rent-toown images, and working with interior designers to incorporate our fine art photography into their design.

AC: We understand that Elaton is also raising funds for community causes. How do you balance these social initiatives with the stretched resources of an SME? Loh: After publishing two books, we realised that you could have many editions of the same book when you have good content. So, we decided

to leverage this for a good cause. For example, we are running a fund-raising project for the 131 st Anniversary of the Methodist Boys’ School in Penang. Our pitch to them is to produce a commemorative book for the school with our Simply Penang book as the core, plus an additional 70 pages of content related to the school. Each page in the book is sponsored, thus we are on target to raise RM400,000 for them this year.

We also proposed another book project to a zoo, whereby we produce a book that costs half the book’s retail price. After running the numbers, we determined that even if only 1% of the zoo visitors buy the book, the zoo can already profit RM100,000 within six months. Then, when we reprint the same book, the zoo’s profits can double as there will be no more production costs, only the printing cost.

strong relationships. Within a short period, we have built a network of friends and contacts to promote our business effectively.

Lee: Exactly. It is thanks to this network that, within two years, we held solo exhibitions in Penang and Singapore, published two books, were invited to carry out projects similar to Over Penang in Myanmar and Australia, established Malaysia’s first fine art photo gallery owned by an artist, and so on. The community support also boosted our book sales – we sold 1,000 copies of Simply Penang before we went to print!

Previous page: Second Penang Bridge.

This page clockwise from left: Altar Table at Chew Jetty, Penang; Scuba divers; Kaul festival picnic, Sarawak; David and Rebecca Loh. Cover: Penang Bridge.

Page 8: Over George Town Iconic view.

AC: Has the choice to start your fine art photography business in the state of Penang made any difference?

Loh: Well, the cost of living and starting a company here in Penang is affordable. But most importantly, the people here are warm and helpful, making it easy to nurture

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DASH-ING TOWARDS RECOVERY LANGKAWI SUN PEEKS OUT FOR RIYAZ HOTELS AND RESORTS AFTER THE PANDEMIC STORM Born and bred in Ipoh, Dato’ Sri Mohammed Shaheen Shah Mohd Sidek stepped out of Cesar Ritz College, Switzerland, in 1994 with a graduation scroll in hand and buckled into a high-flying career in the hotel business.

Shaheen started in New York, where he worked for Marriott International and pursued an MBA at Cornell University. After spending a few years in the US, he returned to Malaysia to join the Pan Pacific Hotels Group, which managed the Pan Pacific KLIA hotel (later rebranded as ‘Sama-Sama’) of the then-brand-new Kuala Lumpur International Airport (KLIA). This put him in roles instrumental in handling the opening of both the hotel and the retail side of KLIA in 1998 and the Sepang International Circuit that would host the Formula One races. He became a General Manager of Cyberview Resort and Spa – at the young age of 28.

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In 2008, Shaheen took the plunge to open up his hospitality brand, RIYAZ Hotels and Resorts. It now runs multiple hotels, including

Dash Resort Langkawi, Dash Box Hotel Cyberjaya, and Dash Hotel Seminyak Bali. The RiYaz Group has also expanded to other sectors like food, higher learning, and design and architectural services.

Yet, Shaheen’s wealth of experience over 26 years did not prepare him for the coronavirus pandemic. The first nationwide lockdown in March 2020 came in like a wrecking ball for his hotel business – which had been enjoying 90% to 95% occupancy rates two months prior – and the ambitious growth the company forecasted for what was supposed to be the Visit Malaysia Year.

But Langkawi brings a bright spot of hope. According to Shaheen, among the hotels and resorts under RIYAZ, Dash Resort Langkawi is recovering the best “by far” from the pandemic slump.

The seasoned hotelier tells Asia Connects about his eventful career, how his hotels weathered through the pandemic months, and what he had to sacrifice to uphold what he believed in.

AC: What made you decide to study hotel management in Switzerland?

Shaheen: Well, it was my mother’s idea. I’ve always wanted to be a lawyer, but my mum said that hotels would be a better bet for me because, as a kid, I just loved our hotel stays whenever we travelled as a family. I wasn’t interested in leaving the hotel for any sightseeing. I’d only want to wander around the premises to observe the employees and guests!

AC: That’s interesting.

Usually, the stereotype for Asian parents is that they’d convince their son not to

study hotel management and be a lawyer instead.

Shaheen: [Laughs] Maybe my mum knew that I wouldn’t make a good lawyer.

AC: This career path did lead you to be involved in historical events like the opening of KLIA, its hotel and the Sepang International Circuit. What was that like?

Shaheen: I had just moved from the huge city of New York back to Malaysia at the time to join the Pan Pacific Hotels Group, which was opening up KLIA, as well as the hotel adjacent to the airport. The night before

the airport was supposed to start running, I looked out the hotel’s window and was struck by how empty Sepang was. There was no traffic.

You could lay on the road and sleep there. And when I woke up the following day, the streets were suddenly so busy, with cars and massive trailers transporting equipment and so on. Within hours overnight, they had redirected the planes from the old Subang Airport to land at KLIA.

for KLIA at the time, and people flocked in for meals and layovers. I was assigned to handle the opening of the hotel and the retail side of the airport, and the Sepang International Circuit. I worked in Marriott in New York where there were 2,500 rooms to manage. But even that could not compare to opening a major airport and hotel and a world-class international Formula One circuit – it was simply mind-blowing.

Of course, there were significant hiccups with the move. Many flights were delayed, and we were slammed – Pan Pacific KLIA was the only airport hotel

AC: What drove you to start your venture, RIYAZ Hotels and Resorts, in 2008?

Shaheen: When I was the General Manager (GM) at

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Cyberview Resort and Spa at 28, I was one of the first local GMs for a five-star hotel.

At the time, there were not many locals who made it to that rank – most of them were expatriates. Unlike Singapore with its Banyan Tree Holdings and Thailand with its Anantara, I also noticed that Malaysia lacked a worldclass hotel brand despite the large volume of tourists we attract for our hospitality.

So, I wanted to build a hotel brand that is genuinely Malaysian, and I also wanted to give opportunities to local

Malaysians to be GMs in fivestar properties.

At first, our business model was to manage hospitality assets for clients. We had the opportunity to manage Cyberview Resort and Spa and later the Ri-Yaz Heritage Resort and Spa in Terengganu. In 2013, we brought Tan Sri Abdul Rashid Abdul Manaf, the founder and director of Eco World Development Group Bhd, onboard as the partner and chairman of RIYAZ. He told me, “Look, we need to own

hotels first if we want to have more management contracts.

That would give other hotel owners confidence in us to manage their assets.” So, we took out a loan of RM120 million from Exim Bank and bought a property in Seminyak, Bali – that was our first hotel under the Dash brand. The second one was Dash Box Hotel Cyberjaya, and the third was Dash Resort Langkawi.

AC: You had front-row seats to how the hospitality sector in Langkawi screeched to a halt during the lockdowns amidst the Covid-19 pandemic. What were the last two years like for Dash Resort Langkawi?

Shaheen: It was very challenging; we did not see it coming. When the lockdown was imposed in March 2020, our occupancy rate dropped from around 90% to zero.

So, we had thousands of employees across Malaysia and Indonesia that suddenly had nothing to do. But we were adamant about keeping all our employees. Without guests, all we could do was clean and maintained the hotel – it ended up being so clean that you could sleep on the corridor floors. But it was better than closing the hotel temporarily because a property without human movement breaks down very quickly. So we needed money for payroll, utility bills, landscaping maintenance, etc.

Dato’ Sri Mohammed Shaheen Shah Mohd Sidek

We had two outstanding months in January and February before the lockdown, so that gave us enough cash reserves to operate without income for the next three months. When the pandemic and lockdowns stretched on, we had to

impose pay cuts – first at the management level and later among the lower-ranking employees. We also sold off some shares from our Bali property and a piece of land near KLCC, where we had begun development for a 24-storey hotel, to generate more cash.

AC: You launched a five-star Ri-Yaz Lavanya Resort and Villas in Langkawi in June 2020, just three months into the pandemic. Was that a miscalculated step, or did you see opportunities?

Shaheen: Ri-Yaz Lavanya is a major development consisting of hotel apartments and villas. We decided to launch the villas, whereby each unit has its private pool, in 2020 because we noted that many people were hesitant to share pool facilities with strangers during the pandemic. The privacy was attractive; we saw about 50% occupancy rate during the months when cross-state travels were allowed, and hotels could operate.

AC: With the relaxed Covid-19 restrictions, how has the hospitality business bounced back in Langkawi?

Shaheen: Well, when state borders reopened in the last quarter of 2021, and the international travel bubble was implemented for Langkawi, we saw our best ever performance yet.

Business went up 25% in that three months alone compared to the full year we operated in 2019 before the pandemic hit.

While Langkawi was a top destination for international tourists, for now, it is heavily reliant on local visitors. This makes it a weekend market

When the lockdown was imposed in March 2020, our occupancy rate dropped from around 90% to zero

– more guests would check in over the weekend, and occupancy would drop during the weekdays unless there are school holidays. This is different from serving an international market. The inflow of tourists was more consistent throughout the year because you could have Middle Eastern visitors during certain months and Europeans coming to escape from their winters during other months.

However, the upside of local tourists is that they are keener on sightseeing, unlike international tourists who prefer to sunbathe on the beach. So, our sunset cruise package has been selling well among local guests.

AC: The last two years of the pandemic were filled with tough calls and sacrifices for entrepreneurs. What were some of the hardest decisions you had to make?

Shaheen: The most challenging decision was selling off our assets, like some shares from our Bali property – which we acquired through hard-earned money and built the brand from the ground-up – because we needed cash. But it was necessary. One thing I would not compromise was to put my employees out on the

streets with no income. I would rather sacrifice the assets purchased to have some cash to ensure that my staff can keep their jobs.

I also wanted to keep the hotel fresh and maintained even during the months when there were no guests, which incurred utility bills, landscaping costs, and so on.

It would have been easy to close the hotel temporarily to cut costs. Many hotels have done that. But the cost to restore the hotel later would be astronomical. By keeping the hotel clean and ready, we could also open and receive guests immediately when travel was allowed, unlike other hotels that may need some time to air out the rooms, rehire the staff and clean the premises.

Of course, there was the option of taking bank financing. But a huge reason why we survived the pandemic was that we were debt-free.

When we opened Dash in Bali, we were lucky because Bali was booming, and we managed to pay off our bank loan within five years. We even had a surplus of cash, which we used to build our Cyberjaya and Langkawi properties. From then on, we ran on internal funds. If we had gone into the pandemic with bank debt, we would not have survived. So, I did not want to take up more liabilities even as the pandemic stretched because there was too much uncertainty.

If I could go back in time, would I have done things differently? No. As an entrepreneur, I am not emotional about my assets.

I could buy another piece of land in the future. I could expand again.

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DIGITALISATION

TRADITION TRANSFORMED:

SME DIGITALISATION MARCHES FORWARD WITH

CELCOM BUSINESS

It may seem that Kenny Hills Bakers was insulated from the worst of the pandemic.

A well-recognised name in Klang Valley, Kenny Hills Bakers started as a humble bakery-cum-café in 2014 in Taman Tunku.

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When the Covid-19 pandemic hit in 2020, nationwide lockdowns were imposed to curb the spread of the virus, keeping Malaysians indoors.

Ordering food delivery became the new normal as dine-ins were restricted. Many

eateries had to adopt online ordering and food delivery services to sustain an income.

But not Kenny Hills Bakers.

Thanks to its loyal following, the primarily traditional business still recorded growing sales. Hence, it did not go on any delivery platforms initially – its business owners saw no need to venture out of their comfort zone. They thought that adding a digital aspect to the business would require more investment and human resources.

But the pandemic stretched on, and with it came stricter and longer lockdown measures that affected dine-ins. Kenny Hills Bakers tip-toed into the digital age – first by arranging its private deliveries or using messaging apps to coordinate pick-ups with customers. But this proved taxing as demands burgeoned.

It was time to embrace the inevitable: digitalisation.

Kenny Hills Bakers signed up for an integrated Offline-to-

Online (O2O) platform that will provide all-in-one features to manage sales. Customers can order directly from their website and arrange for pick-ups or deliveries without the hassle of back-and-forth messaging. With online payments enabled, staff no longer need to process payments manually.

“We were initially hesitant because, with a lesserknown targeted platform, it meant that we would only be reaching out to customers who specifically wanted to order from us, as opposed to being featured on a general food delivery platform accessed by the masses.

But upon going digital, the demand was there, and it was satisfying,” says Tzi Hua Au, Operations Manager at Kenny Hills Bakers.

The story of Kenny Hills Bakers underlined the secret sauce to successful digitalisation: choosing a suitable digital partner that understands the needs and constraints of an SME business is half the battle won. The widespread notion that digital transformation is expensive, complex and would not bring a good return on investment (ROI) is no longer valid. SMEs need the right partner with the right expertise to help them navigate the digital new frontier.

This is where Celcom comes in. As Malaysia’s most comprehensive telco network, Celcom Business is the preferred digitalisation partner for many SMEs and

corporations in Malaysia.

Celcom Business continuously delivers high-value solutions that would speed up and smoothen the digital transformation of SMEs, while providing plans and offers that maximise savings and minimise complexity.

SMEs eligible for the Pelan Jana Semula Ekonomi Negara (PENJANA) initiative can enjoy a 30% discount when signing up for Celcom Business Suite, which is bundled with all the essentials to go digital. For example, the newly launched Alpha Pack under the Celcom Business Suite includes business internet plan, HR Cloud application, digital marketing platform, and Microsoft 365 tools, lending total confidence for an SME to run its business online while staying seamlessly collaborative even among teams working remotely.

Fancy an office at your fingertips? The Flexi Pack, a mobile plan, comes with bestin-class Microsoft tools from just RM3.30 a day. Non-mobile plans like the Productivity Pack also allow SME operators and staff to stay on top of the business anywhere with cloud-based solutions for real-time collaboration – from just RM1.30 a day. For a more robust plan, the Booster Pack covers the option to go cashless via a mobile POS system that accepts e-payments, tracks inventory, manages accounts and more from only RM5.30 a day.

This means that even traditional businesses can

access a suite of digital solutions to survive and evolve in the new normal. For example, The Tuyang Initiative is a Borneo and indigenous art management social enterprise based in Miri, Sarawak, which faced challenges to help its cultural practitioners make a livelihood through art during the pandemic. Many of them hold workshops and performances through Tuyang to make a living, but; the travel restrictions have impacted these activities.

However, Tuyang took quick steps to digitalise.

This includes training its artists to use virtual tools, like video chat applications, which allow the practitioners to showcase their art to viewers across Malaysia and beyond. This opened new markets and opportunities for the cultural heritage and its practitioners, enabling these art forms to live on and transcend borders. Like Kenny Hills Bakers, Tuyang’s timely digital transformation expands the potential of traditional businesses.

Celcom’s digital business solutions can accelerate present and future growth in today’s complex business environment with various plans to suit SME’s everyday business needs. Bringing business online with ease is no longer a luxury; it is a necessity.

To learn more about how Celcom Business is a competitive game-changer for SME digitalisation, visit https://business.celcom.com. my/sme/business-suite.

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IDEAL VISION SEES A BRIGHT FUTURE FOR AUTOMATED QUALITY CONTROL INSPECTIONS There are jobs that humans just cannot do — for example, spotting flaws that are too tiny to be detected with the naked eye on electronic parts. These cracks or imperfections can cause the electronic device to malfunction, or worse, endanger its users – not to mention the recall exercise that would incur massive costs. This is why the quality control inspections are now entrusted to companies like Ideal Vision Integration, which provides machine vision inspection solutions through artificial intelligence (AI) technology.

Founded in 2013, Ideal Vision is an MSCstatus company based in Penang with a clientele that crosses industries – from semiconductor to medical to automotive to packaging – in Asia, Europe and the United States. Its CEO, Edmund Yuen, tells Asia Connects why the demand for machine vision is booming.

AC: How has the machine vision industry evolved since Ideal Vision began operation in 2013?

Yuen: Around ten years ago, electronics manufacturers relied more on human visual inspection as it is more costeffective compared to visual inspection technology. At the time, the inspection was also mainly concerning external cosmetic defects with an average size of 0.05 mm and above, which are still viable for human visual checks.

Edmund Yuen

Nowadays, due to electronic miniaturisation, the industries have very stringent inspection requirements.

In semiconductor industries, the

machine vision system needs to possess 0.001 mm defect detection inspection capability. Hence, automated machine vision equipment is necessary to perform the inspection tasks and eventually replaced humans in a quality control factory line, as consistency and accuracy are what companies need.

At Ideal Vision, we have pushed the limits of imaging, optics, equipment structure stability, inspection algorithms, and processing power to develop worldclass machine vision equipment and solutions for our clients. Now, we are researching and developing deep learning integration so that big data support can make the inspection process more robust, accurate and manageable.

AC: Has your research and development (R&D) efforts paid off?

Yuen: Indeed. In 2018, Ideal Vision recorded 5x in revenue growth after we launched the advanced and flexible machine vision platform, JÄGER™. This platform has been widely installed and integrated into various inspection applications in Southeast Asia and China.

Demand for machine vision systems and equipment has skyrocketed in the postpandemic world, especially among the semiconductor players. Ideal Vision projects that its revenue growth will at least double in 2022. To cater for the growing opportunities, we have doubled our workspace last year to increase our headcount and

production capacity. In 2020, we also diversified business from machine vision system integration to equipment manufacturing.

AC: Sounds like an exciting journey ahead! But are you grappling with any roadblocks?

Yuen: As an SME, talent shortage is always a challenge. Most candidates prefer to join multinational corporations (MNCs) or limited liability companies (LLCs) because they believe that they offer better job security and career advancement opportunities.

But a good SME eventually grows and becomes an LLC too. Ideal Vision is also committed to the growth of our employees by offering our engineers many training and networking opportunities, besides a competitive remuneration package and a comfortable, innovative workplace.

Another issue is funding – as a growing tech company, massive funding is required to invest in R&D technologies.

One major support we

received was the MSC Malaysia Status and Pioneer Status from the Malaysia Digital Economy Corporation (MDEC) in 2017. The tax incentive that came with the Pioneer Status allowed us to reinvest funds into R&D expenditure. So, I recommend SMEs dialogue with government agencies to seek funding or grant assistance.

AC: Does operating in Penang also lend Ideal Vision any advantage or additional support?

Yuen: Yes. As you may know, Penang is known as the ‘Silicon Valley of the East’ with a well-established electrical and electronics (E&E) ecosystem. Ideal Vision decided to set up its headquarters in Penang because we wanted to be part of this regional hub’s ecosystem and supply chain for hi-tech machinery and equipment. Moreover, Penang’s robust E&E industry has attracted and created a strong talent pool, especially in software and engineering – proving that we made the right choice for Ideal Vision to be stationed here.

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FROM WASTE YARD TO

GreenTech Eclimo’s bumpy journey in building Malaysia’s

In 2008, Dato’ Dennis Chuah combined two of his lifelong passion – bikes and batteries – and charged into what would become one of the hottest sectors over a decade later.

Eclimo Sdn Bhd, the company Chuah co-founded, is the manufacturer of Malaysia’s first electric motorcycle. In recent years, electric vehicles (EVs) have been creating major buzz – global sales more than doubled within a year to hit 6.6 million units in 2021, according to the International Energy Agency – as climate change strengthened government and consumer convictions to reduce carbon emissions.

Improved technology further encouraged adoption.

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The heightened interest in EVs drives optimism for Eclimo, which is forecasting a two-fold increase in business within the next few years. According to Chuah, the Penang-based company has an optimistic cash flow and is expected to turn a profit in the next three to five years. He adds that Eclimo also sees yearly revenue growth of 30%.

There is one roadblock to growing the EV user base: price. Without mainstream adoption, electric motorcycles are more costly than petrol motorcycles. Eclimo scooters are priced between RM10,501 to RM24,500, while a petrol motorcycle’s price can be as low as RM3,000 to RM4,000.

To lower the barrier of entry, Eclimo is also providing an option to lease its motorcycles at RM600 a month.

Despite the hurdle, Chuah is confident about the viability of his business. In fact, he is convinced that all motorcyclists in Malaysia will eventually switch to using Eclimo motorcycles. He tells Asia Connects why.

AC: What drove you to start a business making electric scooters?

Dennis Chuah: I didn’t come from a well-to-do background.

Motorcycle has been the main transport for my family to get around. But my interest in two-wheelers started when I was still in school; a few of my wealthy schoolmates had racing bicycles. I could

first electric scooter

not afford one. So, I visited dumpsites to collect any bicycle parts that I could find and went to bicycle shops to watch and learn how bikes are put together. With a lot of tinkering and observation, I made my own racing bicycles and even ended up selling them to my schoolmates!

I also assembled my motorcycle out of scrapped parts to cut costs when I got older.

But why I decided to start an electric scooter business was because I’ve already been working with lithium batteries since 2000. I ran a business selling lithium batteries to a Japanese company producing radio-controlled cars and planes, then for military walkie-talkies, and then for power banks. You see, at the time, lithium battery was still a new technology. EVs seem to be the natural next step.

Lithium batteries are good for electric vehicles because of its high energy density, and it can be recharged within a relatively short time. That’s basically how I came to spend 22 years – and counting – in the battery industry. Given

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my background in batteries and building bikes, the rest is history.

AC: EVs are all the rage now.

But you started Eclimo in 2008, when the technology was obscure and out of mainstream reach in Malaysia.

What made you decide to take the plunge?

Chuah: Going into this, I already knew that the cost of building an electric motorcycle would be higher than a petrol motorcycle. But I believe that the design, technology and performance that I provide can convert all motorcycle users in Malaysia to switch to using Eclimo. That’s what entrepreneurship is – a combination of confidence and gut feeling. But, coming back to reality… [laughs] in 2008, when I wanted to build the Eclimo scooter, I thought it’d only take me a month to figure it out. I ended up spending five years on research and development (R&D). Five years! Where would one find the motivation and passion for keeping going for that long? Because I believed. I believed that all motorcycle users in Malaysia would want to buy my electric scooter.

charging the batteries should be as easy as charging a mobile phone. We also had to ensure that the electric scooter could run on high speed. So these were all the issues we had to solve.

Our scooter was finally ready and approved by the Road Transport Department Malaysia (JPJ) in 2012. At the time, the Eclimo scooter’s range (the distance an EV can travel in a single charge) is 100km. It can run at a maximum speed of 100kph and you can charge the batteries using any wall socket. These days, we have doubled the range to 200km.

AC: But why were you so confident about the appeal of the Eclimo electric scooters?

What pain points or gaps does it solve for the current motorbike market?

AC: What made the R&D process longer or more difficult than expected?

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Chuah: I knew that I had to develop a vehicle that makes sense for motorcycle users. I’ve been a motorcycle user myself. One of the top concerns is convenience – the battery has to be able to sustain a substantial distance before needing another charge. Then, we had to ensure ease of recharging;

Dato’ Dennis Chuah

Chuah: Think of it this way: why do people usually buy motorcycles in Malaysia?

It’s because they could not afford a car. Motorbikes are the cheapest private transportation they can buy.

But motorcycles still need maintenance, and every time you send it to the workshop, the waiting can take up half a day. So it costs money and the time that you could be working and earning an income.

The more parts a motorcycle has, the more maintenance and fixes it would require.

For a petrol motorcycle, you may need to change the spark plug, engine oil, etc. In comparison, an electric bike consists of only 25% of the parts that a petrol motorcycle needs. So, yes, there will still be some parts of an electric bike that needs to be repaired, as the tyres or brakes. But it is substantially lesser than a petrol motorcycle. For Eclimo scooters, we also send a mobile repair team to your doorstep, so you can relax in your own home while we handle the maintenance.

Then, there is the environmental issue. As EVs are made with fewer parts compared to petrol vehicles, manufacturing an electric motorcycle requires fewer natural resources.

Petrol vehicles are also a major source of carbon emissions. Only 30% of every litre of petrol pumped into it powers the bike for petrol motorbikes. The rest are released as carbon dioxide that pollutes the air. However, over 90% of every kilowatt of electricity charged into the batteries for electric motorcycles are used to power the vehicle. It does

not emit carbon and is much more efficient in using energy and resources.

Of course, charging the battery still incurs a carbon footprint, as most of our country’s electric supply runs on coal. But I believe that if you want to save the world, you have to start in your own home. By using an electric vehicle, you are not exposing your neighbourhood and community to more carbon emissions. It is also up to the consumers to demand for clean energy like solar or geothermal power from our power plant. If there is demand, there will be supply.

AC: Speaking of demand, how did you secure your first customers?

Chuah: Around 2012, KFC started providing delivery services, and they were using petrol motorcycles. I sensed an opportunity. I wanted to know what problems they could be having with petrol motorbikes.

So, I approached delivery riders during their breaks, bought them drinks, and chitchatted. I learned that the riders barely had time to refuel their motorcycles due to the high volume of deliveries. Then,

there was also the issue of having to send the motorbikes for maintenance, which was disruptive to the delivery flow.

So, I proposed Eclimo electric scooters to KFC. Eclimo motorcycles could go a long distance in a single charge without stopping for refuel.

For motorcycles needing repair, I also offered a one-toone replacement so that there will be minimal downtime.

KFC loved the idea, though the higher price of Eclimo scooters gave them pause.

So, I told KFC, “It’s okay, I will lease the motorcycles to you at a monthly rate of whatever you are paying per month for petrol motorcycles – including for fuel and maintenance.”

KFC agreed, and they used Eclimo bikes for food delivery over the next five years.

With such a big-name customer on board, I was able to expand Eclimo’s client base, which would later include the Royal Malaysia Police, DHL, and the state governments of Penang and Malacca.

AC: Eclimo has operated in the Northern Region of Malaysia for the past 14 years.

Has the ecosystem shaped Eclimo in any way?

Chuah: The direction of Eclimo has always been closely intertwined with the Northern Region market. One example is the Penang2030 plan launched by the state to improve its livability, economy and environment. The plan laid out a specific target for 50% of the motorcycles in the state to be electric powered. Meanwhile, Eclimo is working on expanding our user base in Penang. The state is an excellent market for electric scooters – it has many motorcycle users, and Penang’s relatively small size meant that you could get to most of your destinations within a single charge.

The Northern Region’s thriving electronics industry is also beneficial to our 100%-Malaysian-owned business. We could not have built Eclimo’s electric scooters on our own. We need many electronic components, talented designers and engineers, and manufacturing partners – all of these are abundant in the Northern Region. I can talk for hours about what I want Eclimo electric scooters to be, but these talents and partners are the ones who will help make it a reality.

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G R E E N L I G H T T R A N S P O R TAT I O N S O L U T I O N

The ES-11 electric scooter was built as an inner-city runaround vehicle.

Its futuristic-chic exterior was styled to complement its inner power, with clean curves and resilient materials. www.eclimo.com/

EXPERT OPINION

THE PROPERTY SECTOR IN MALAYSIA SEES

UNEVEN RECOVERY

IN 2022

As the country transitions into endemicity on April 1, the Malaysian property sector is expected to see a return to normalcy, with uneven recovery anticipated across the sub-sectors. All restrictions on business operating hours will be lifted, interstate travels will be allowed for all regardless of vaccination status, international borders will be reopened, and there will be no more limits on the number of people allowed in the workplace based on vaccination coverage.

Breathing room for retail threatened by incoming supply The relaxation of restrictions is a much-welcomed relief for the battered retail sector, which has recorded a 27.8% decline in sales in the third quarter of 2021 (3Q2021) following prolonged lockdown measures.

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While sales have picked up, the road ahead for retail rentals and occupancy levels remains uncertain and vulnerable to new coronavirus variants, such as the Omicron wave that has swept through Malaysia in March. While the government has assured no

more “blanket” lockdowns will be imposed, retail recovery is closely tied to the number of Covid-19 cases.

Besides the volatile retail prospects, the imminent glut of retail space supply may intensify pressure towards rental rates and occupancy levels in Klang Valley.

According to the Knight Frank Malaysia Real Estate Highlights (REH) for the second half of 2021 (2H2021), the completion of the Pavilion Bukit Jalil shopping mall brings the cumulative supply of retail space in Klang Valley to circa 64.86 million sq ft as of 2H2021. Another ten shopping centres or supporting retail components – with a collective retail space of circa 6.62 million sq ft – are scheduled for completion by 1H2022.

Looking north, Penang also saw a slight contraction in shopping mall occupancy rate, according to the National Property Information Centre (NAPIC). As of 3Q2021, the 109 shopping malls in Penang recorded a lower occupancy rate at 71.2%, compared to 72.9% a year prior. In George Town, the downward slide

is more apparent – the occupancy rate was 76.9% in 3Q2021 compared to 81.9% in 3Q2020. Nonetheless, the opening of major grocery chains, including Village Grocer, Lotus’s (previously known as Tesco), and popular Korean convenience store CU Mart in Penang may spark fresh buzz for the retail landscape.

Despite the cloudy forecast, a thread of hope remains. The MIER Consumer Sentiments Index recorded 101.7 points in 3Q2021, the highest in eight years. This means consumers are confident about better income and employment in 2022.

Cautious optimism for the residential property market The post-pandemic optimism for income and spending was reflected in the housing market in Klang Valley and Penang. In Kuala Lumpur, the volume of transactions of high-rise residential properties (including serviced apartments) soared 25.5% on the quarter in 3Q2021.

However, the corresponding value of transactions was lower, implying a bigger appetite for lower-priced and

affordable housing units during that period.

“During the review period in 2021, there was only one substantial completion in Kuala Lumpur’s high-end condominium market, Ascott Residence, with 199 units. This brings the cumulative supply in Kuala Lumpur to 66,128 units at the end of last year,” says Sarkunan Subramaniam, the Managing Director of Knight Frank Malaysia.

More units are up and coming. According to Knight Frank, about 6,791 high-end condominium or residential units (16 schemes) are scheduled for completion by 1H2022.

In Penang, the residential subsector has posed a higher volume and value of property transactions as of 3Q2021, which is expected to continue.

According to Mark Saw, Executive Director of Knight Frank Penang, several key factors drive such optimism.

Firstly, the Penang State Government has extended the Penang Home Ownership Campaign (HOC) to the end of June 2022. Secondly, affordable home projects

have been greenlit in various strategic locations. Additionally, it is now mandatory for fibre optic telecommunication infrastructure to be installed for all new developments in the state.

Overall, Knight Frank Malaysia remains cautiously optimistic for the residential property market in early 2022, which has received various property-related incentives and initiatives under multiple stimulus packages.

“The abolishment of the Real Property Gains Tax (RPGT) for property disposals in the sixth and subsequent years of ownership is longawaited. This augurs well, especially for long-term property owners who wish to dispose of their existing properties for purposes of an upgrade as well as for empty nesters looking to downsize.

The tax penalty exemption is expected to boost activity, especially in the secondary market,” says Keith Ooi, Deputy Managing Director of Knight Frank Malaysia.

Office market sees recovery amidst co-working gains As hybrid work and workfrom-home arrangements become the norm in the post-pandemic reality, the co-working market’s growth spurt is expected to persist.

Co-working spaces allow employers flexibility while evaluating the need to scale up or scale down their workforce and space needed, depending on their business trajectory and market condition.

For office leasing, signs of life are returning as well. In the last half of 2021, Knight Frank Malaysia observed active enquiries and a gradual recovery of the office market.

The momentum is expected to continue in 2022, according to Teh Young Khean, Executive Director of Corporate Services at Knight Frank Malaysia. A few multinational companies are even taking advantage of lower or competitive rentals to move into high-quality CBD office spaces.

Nonetheless, the office leasing market in Kuala Lumpur city will remain tenant-led in 2022. This is

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EXPERT OPINION There is plenty of pent-up demand from people worldwide to travel again, after many months of being stuck in their homes

because supply continues to outstrip demand. Teh points out that by the end of 2022, around 9.06 million square feet of office space across Klang Valley are scheduled for completion, with Kuala Lumpur city contributing more than half – 5.45 million square feet – of this new stock.

The outlook is brighter in Penang. Knight Frank Malaysia forecast that the state will see stable rents and occupancy rates due to the supply crunch of better-grade office spaces.

Average occupancy rates for the Penang Island and the mainland is at circa 85% and 57%, respectively, according to NAPIC. To entice tenants into their buildings, Teh notes, landlords are expected to be more competitive in providing incentives while also upgrading their facilities to enhance health and safety amid the Covid-19 threats, including improving the quality of their indoor environment.

“Buildings under construction that will enter the market are expected to bring more options to occupiers, especially those seeking to upgrade from their current buildings to newer and better buildings with higher specification,” he says.

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Incoming tourists a mixed blessing for the hospitality market

On a sunnier note, tourism in Malaysia is seeing a rebound. Domestic travels have resumed since the relaxation of interstate crossing in the last quarter of 2021. In April 2022, the reopening of borders to receive international travellers is set to speed up the recovery of the tourism sector. The Vaccinated Travel Lane (VTL) between Malaysia and Singapore, which allows quarantine-free travel between the two countries, is another shot in the arm.

“Our discussions with hotel owners have indicated a dramatic improvement in occupancies. Some smaller hotels see weekday occupancies picking up to 60 to 70% and 100% on weekends, supported mainly by domestic staycation business. Average room rates have also shown improvements but have not reached their pre-Covid levels,” reveals James Buckley, Executive Director of Investment at Knight Frank Malaysia.

Buckley adds that Langkawi is a bright spot for the Malaysian hospitality market. This is because of its relatively low levels of new supply in hotels, making it less competitive than other hotel markets in Malaysia. He anticipates a sharp recovery in occupancy and average room rates in the four to fivestar market.

But this is no time for the hotel industry to rest easy. The sudden improvement in occupancies also brings a staff shortage issue, notes Buckley, which may raise salaries as hotels compete for employees to cope with increased demand.

Penang alone has reportedly seen a layoff of about 4,800 hotel staff, many of whom left the industry due to its uncertain prospects amid the pandemic.

“The International Air Transport Association is forecasting global passenger numbers to recover to 88% of pre-Covid-19 numbers in 2022, surpassing 105% in 2023,” Buckley says. “There is plenty of pent-up demand from people worldwide to travel again, after many months of being stuck in their homes. We need to make sure they choose Malaysia, whether domestic travellers or international visitors, and whether they are seeking a spectacular holiday or looking to do business.”

Knight Frank, a leading independent global property consultancy, has 125 years of experience in offering highquality professional advice and solutions across a comprehensive portfolio of property services. To learn more about how Knight Frank Malaysia can lend an insightful edge to your property investment strategies, please visit www.knightfrank.com.my

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