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Pernas building up hotel brand name globally
PERNAS Hotel Chain Sdn Bhd, the hotel division of Pernas International Holdings Bhd, is building up the Mutiara Hotels & Resorts name into an international hotel management brand, its managing director Zain Puteh said.
The company owns 10 hotels: Hilton Petaling Jaya, Hilton Kuching, Hilton Batang Ai, Mutiara Kuala Lumpur, Mutiara Beach Resort Penang, Mutiara Johor Baru, Mutiara Taman Negara, Mutiara Pedu Lake Resort, Pelangi Beach Resort in Langkawi, and Hotel Istana in Kuala Lumpur.
The five Mutiara hotels have 1,664 rooms while the five managed by Hilton and Meritus provide a further 1,600 rooms. (Meritus is managing its Pelangi Beach Resort and Hotel Istana.)
The only non-owned property Pernas manages is Mutiara Burau Bay in Langkawi.
“The total net asset value in our hotel portfolio amounted to RM1.54bil and we do not foresee making any new investment for the time being, pending the ongoing restructuring exercise of our parent company, Pernas International,” Zain said.
Last month Pernas announced a major restructuring exercise to reduce its massive debt of RM2.5bil to more manageable levels. The exercise involved placing all the 10 Pernas hotels under a subsidiary, Arena Target Sdn Bhd, and switching the status of Khazanah Nasional Bhd from a creditor to shareholder of Arena.
According to Pernas acting chief executive officer Mohd Redza Shah Abdul Wahid, the move to place all the hotels under Arena will allow the group's hotel division to be more self-sufficient, thus giving the platform for the group to venture into other core businesses.
Zain said the exercise augured well for the group's hotel business as Pernas Hotel, whose share of the loan from Khazanah amounted to RM550mil, would be able to save RM38mil in preferential shares dividend a year.
“This will place us on a stronger footing with more comfortable cashflow to further improve our position in the hotel management industry,” he said.
He said Pernas Hotel management team, with its six divisions of technical services, corporate marketing, yield management, design and concept planning, engineering and finance, had set out to be a flagship company within the Pernas group, with its reputation as a professional and reliable hotel management group.
“Since Pernas Hotel took over the management of Mutiara Beach Resort Penang in 1999, we have today six full-service hotels and resorts in Kuala Lumpur, Penang, Taman Negara, Pedu Lake, Burau Bay and Johor Baru,” Zain said.
Its two premier five-star hotels are the Mutiara Beach Resort Penang and Mutiara Kuala Lumpur while those operated as eco-tourism resorts are Mutiara Pedu Lake in Kedah, Mutiara Taman Negara in Pahang, and Mutiara Burau Bay in Langkawi.
He said Mutiara was chosen for the group's hotel chain to build on the strong brand recognition that Mutiara Penang had achieved among local and international business and leisure travellers, travel agents, airlines and meetings organisers since its opening in 1986.
“The goal is to add one new Mutiara property a year, especially in Langkawi, the east coast and Sabah, as they offer strong tourism potential,” he said.
Zain said that after establishing itself in the local market, “we will look at venturing into other markets in the region in the next five years.”
In 2001, Pernas Hotel took over the management of its Kuala Lumpur hotel from Hilton and the property was closed for a RM93mil refurbishment, which lasted more than a year to upgrade its facilities for its re-branding as a Mutiara hotel.
“We are also looking to upgrade and introduce new facilities in our hotels and have signed up Clark Hatch Fitness Centre for its 15,000-sq ft centre in Mutiara KL in October. This is in line with our plans to promote a wider band of customer profile, especially among the younger group,” he said.
Zain said that in the last four months, the company's group of hotels registered a 10% drop in revenue across the board, following the outbreak of the Severe Acute Respiratory Syndrome (SARS), which slashed average occupancy rate to 40% from 70% previously.
“While the June to August period was a traditional peak period for Mutiara Taman Negara, especially among the Europeans, this was not so this time due to the SARS outbreak. The business travellers are already coming back to our city hotels but we expect the return of holiday makers to our resort hotels only around December or January,” he said.
Mutiara Hotels and Resorts general manager (yield and revenue management) Mohamad Halim Merican said that although 1,500 more rooms would come onstream in Kuala Lumpur next year from 26,700 now, “we expect the hospitality sector to perform better in the next six to 12 months and will be spending RM5mil in brand-building and promotional exercise this year.”
“We will also be taking part in international travel fairs to raise our profile in the global arena,” he added.
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