Malaysia's Burgeoning Budget Hotel Industry

On the instance of mentioning "budget hotel", one's mind could quickly relate the hotel to those sleazy day use hotels or low priced hotels with bed bugs, lack of room maintenance and the the lone elderly man seating at the reception greeting the guests.

The word "budget" has always been a stigma in every travellers mind that it will always be as above and the rates are between MYR50-60 per night. While this holds truth for many backpackers lodge, bed & breakfast, lodges and inns in Malaysia today, there are many accommodation providers which falls into those category are well maintained.

Green Hut Lodge and Comfort Lodge in Kuala Lumpur are among some of the better maintained outlets providing comfortable and clean stays for travellers with a budget. With minimal facilities e.g. internet access, Astro etc., nevertheless, it suffice for the travellers to have a good rest at the day end.

The increased in arrivals of tourist over the past couple of years had seen growing interest among the business fraternity to jump into the budget hotel sector for a piece of the pie. This trend had seen a continuos growth even during the H1N1 outbreak which engulf the world and had affected the 3-5 star hotel business.

With the economic downturn, cutting of expenditures by organizations had further contributed to the growth in budget hotel industry where required travels by company empployees are now restricted to budget accommodations which are clean and strategically located.

The sudden mushrooming of budget hotel developments across Malaysia does augurs well for the country tourism as well as economy but without proper monitoring and management, it could only lead to an over supply of rooms situation for hotels in that category and a threat to Malaysian tourism industry.

It is estimated that there could be easily 2000+ budget hotels of various sizes and facilities, spread across Malaysia to-date.



Some budget hotel owners who are concerned only with day use room sales, can secure Average Room Rates (ARR) that match or even higher then the 3-5star hotels. It's all good for the owner as a business financially but not so for the industry and the image of the hotel in the long term. There is every possibility that once branded as a love hotel (similar to their Japanese counterparts), the goodwill of the hotel business for a prospective takeover deem less likely now that the new owners would have to shake-off the implied image upon the hotel by consumers or higher marketing is required for re-branding.

Apart from that, budget hotel chains, have sprung to live with more coming on stream in the near future.

Keeping the operating expenditure low and maximizing yield had always been the game plan of budget hotels which is unlikely to change. It is hope that service quality and facilities of some properties be upgraded to enhance the image of tourism and hotel industry as Malaysia welcomes more inbound tourists into the country.

Visit www.ehotelsmalaysia.com.