Issues and challenges in malaysian hotel operations Nor zafir.doc

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ISSUES AND CHALLENGES IN MALAYSIAN HOTEL OPERATIONS

In the proceeding of 3rd Asia-Euro Tourism, Hospitality and Gastronomy conference held at

Taylor’s College, Suang, !alaysia, "#$#%

&or 'afir !d Salleh, Au (a)ar Adul Hamid, &oor Ha*arina Hashim, Siti 'aleha +main

!anagement epartment

ni.ersiti Te)nologi !alaysia

ABSTRACT

!alaysian tourism industry is a ma/or contriutor in the ser.ices sector of !alaysian economy%Hotel industry plays ma/or role in supporting the !alaysian tourism% This paper in.estigates the

operating issues in hotel industry and challenges in current and future landscape of !alaysian

hotel industry% (ased on the in-depth inter.ie0 held 0ith go.ernment officials and hotelsassociations representati.es, the study identify the operating issues on re.enue, human resource,

restaurant and food ser.ice operation, the mar)eting issues on pricing and 1uality management

issues seems to e the top issues for years ahead% 2uture challenges li)e go.ernmentre1uirements, competition among hoteliers and professionali*ation of hotel 0or)ers are to e

faced y the hoteliers in order to stay competiti.e and retain profit in operating hotel usiness in

!alaysia% The study adds to the literature of hospitality study 0hich is .ery limited in !alaysia%

ey0ords4 Challenges, Issues, 5estaurant and 2ood +perations, Hotel

INTRODUCTION

The gro0th of tourism industry started 0ay ac) in the "#th centuries% It then started from

.isiting friends and families and later e6panded to usiness and leisure trip o.erseas% These

figures clearly sho0 that tourism is as important as agriculture or mining in the 0orld economy%

In "##7, "37%" million /os 0ere created in tourism industry, 8"" million tourist trips 0hichin.ol.e o.erseas and local trips% These facts re.eal the importance of tourism in the 0orld’s

economy and its’ role as a gloali*ation agent 9:ea.er ; <auton, "##=>%

As according to !uhamad and Henderson 9"##3>, de.eloping nations ha.e ta)en

ad.antage of rapid de.elopment of this industry in terms of positi.e economic conse1uences li)e

income and /o creation, foreign e6change earnings and in0ard in.estment% Tourism rings insustantial re.enues for go.ernments 0hilst stimulating greater in.estments in infrastructure

0hich ultimately contriutes to o.erall impro.ed li.ing of the related countries% This includes

!alaysia 0here tourism has ecoming the top foreign e6change sector ne6t to manufacturing9 Malaysia Budget , "##8>% It is elie.ed that in the future, tourism 0ill e the iggest foreign

e6change earner surpass manufacturing sector% The e6pansion of the tourism industry, through

its lin)ages, has contriuted to gro0th in other related acti.ities, particularly food and e.erage,

accommodation, entertainment and shopping 9?oon ; <o0, "##@>%



This paper presents the o.er.ie0 of !alaysian tourism and hospitality industry and

highlight issues, challenges and trends surrounding this industry in !alaysia% sing sno0all

sampling, this study conducts in-depth inter.ie0s 0ith the e6perts of hotel industry 0ho are fromgo.ernment officials, hoteliers and hotel associations represent hotels industry in !alaysia% The

first section of this paper descried the gro0th of !alaysian tourism industry, second discussed

on hospitality industry and then the issues and challenges in hospitality industry are e6plored%

MALAYSIAN TOURISM AND HOSPITALITY INDUSTRY

Tourism in !alaysia started 1uite late as to compare 0ith other ASEA& nations% In $8", the

Tourist e.elopment Corporation !alaysia 0as estalished% The function 0as to de.elop and promote !alaysia as a Tourist estination% After $@ years of its estalishment, the go.ernment

set up the !inistry of Arts, Culture and Tourism 9!+CAT> and it sho0s the seriousness of the

go.ernment to de.elop the tourism industry% In April "##B !+CAT 0as split to !inistry ofTourism 9!+T> solely to facilitate the fast gro0ing tourism industry 9Ham*ah, "##B>% 5ecently

they change the acronym to !+T+5 to represent the ministry 0hich they use in the 0esite000%motour%go.%my to promote !alaysia 9000%motour%go.%my>%

Table 1: Tourist Reei!ts

Year Re"e#ue $RM billio#% Gro&t' $!er e#t%

"##8 @$%" 3%B3

"##7 B8%@ %@7

"## B=%# "

"##= 3=%" $3%@

"##@ 3$%8 %

"##B "8%= 38%"=

"##3 "$%" -$%B$

"##" "@% =%B

"##$ "B%" 38%"

"### $%3 B#%=8

$888 $"%3 B$%=

$887 7%@

Source4 000%motour%go.%my

In !alaysia, tourism generates aout 5!B8%@ million in "##7 9refer tale $>% The

e6pansion rate increased at %@7 per cent lesser than its "## figure% This 0as due to SA5S andH$&$ outrea) in Asia% In the year of "##, tourism has created aout 7@#,### /os in !alaysia

and e6pected to create more /os in "##7% This industry shares aout B%B$per cent of the total

!alaysian G? slice of ca)e%

In the 8th !alaysian ?lan, the go.ernment announced their plan to de.elop !alaysia as a

regional centre for health tourism in traditional and modern health treatments% 2or this purpose,

the !alaysia Healthcare Tra.el Council 9!HTC> 0as estalished under the !inistry of Health!alaysia 9!+H> on 3rd uly "##8 upon the appro.al of the !alaysian Cainet% !HTC has een

http://www.motour.gov.my/






set up as the primary agency to de.elop and promote the healthcare tra.el industry and to

position !alaysia as the healthcare destination of choice in the region 9!HTC 0esite>%

(esides that, among other tourism sectors that !alaysia promotes are Ecotourism,

5eligious tourism, 5ural tourism, !arine tourism and Green tourism% In support of Green

tourism, the go.ernment also launched Green Hotel rating system and initiates on many greentourism acti.ities in !alaysia% 5ecently, there are $# hotels from all le.els operating on the

platform of Green Hotel eing rated and 0on se.eral a0ards internationally 9Tan, "#$#>%

Hos!italit( I#)ustr(

!alaysian hospitality industry gro0s rapidly consistent 0ith its tourism industry% This is seen in

the increasing numers of ne0 hotels open and rooms offered in !alaysia% As referring to Tale

3, for the past 8 years the supply of hotels in !alaysia gre0 =# per cent from $B8" in year of"### to "33 in "##8% The supply of rooms increased from $"BB$3 to $=77BB in the respecti.e

year% Currently, the hotels industry supplies more than $=#,### rooms for the guests% The

a.erage occupancy rate for hotels in !alaysia is =# per cent and at top tourist spot places li)e<ang)a0i, ?enang, ?ahang and <auan the occupancy rate goes up to # per cent 9!alaysia,

"##8>%

Table *: Su!!l( o+ Hotels a#) Roo,s i# Mala(sia $*---.*--/%

Dear Supply of Hotels Supply of 5ooms

"##8 "33 $=77BB

"##@ ""=B $@@3@=

"### $B8" $"BB$3

Source4 Tourism !alaysia, "#$#

This is agreed y respondent A and ( 0hen as)ed aout the occupancy rate of !alaysianhotels, respondent A said The occupancy rate so far has been fair to each state, you can see the

average of 60 per cent of occupancy rate in hotel rooms, however in Langkawi and Penang

depending on the season, the rate can go up to 0 to !0 per cent"# :hile respondent ( said$ell they share the e%ual pie when on average the occupancy rate is at 60 per cent for the

whole Malaysia%F

In comparing !alaysia 0ith other Asean countries, !alaysia is more fortunate to ha.e =#

per cent room occupancy than Indonesia and Thailand 0ith @# and B# per cent respecti.ely in

"##7 9!Inistry of Culture and Tourism, "##7>, 99<angdon ; ?ing, "##8>% Ho0e.er, Singapore

is still top in the tourists’ list 0hen its 7# per cent room occupancy is the highest among otherASEA& countries 9Singpore, "##8>%

In many pre.ious studies on challenges of hospitality industry, researchers found that

+perating issues li)e shortage of employees, increasing cost in operation, second, !ar)etingissues li)e mar)et segmentation and o.erlapping rand, changing customer needs and a0areness,



third, Technological issues li)e online reser.ation systems, guest-room inno.ations, data mining,

and yield management, lastly, Economic issues li)e dependence on nation’s economy and

gloali*ation 0ere among the challenges faced y many hoteliers% This section 0ill discussse.eral studies on challenges and issues of hospitality industry gloally a.ailale in academic

pulications%

Table 0: C'alle#es2 Issues a#) Tre#) +ro, 1//3 to *--/4

Author Dears Challenges, Issues, Trend

?rahu,

Sridhar

$88= a% Hospitality training and education4 Change of education approach to pro.ide

1uality 0or)ers to the industry%

% Human resource and organi*ations4 Empo0erment for 0or)ers, legal matters,turno.er%

c% 5estaurant and food ser.ice operations4 uic) ser.ice chain restaurant, to

increase customer satisfaction y inno.ations, employee training, operating

procedures%d% Hotel operations and de.elopment4 se technology to increase le.el of

customer ser.ice, guest programmes, impro.e methods to increase customer

satisfaction%

e% Tra.el and tourism management4 Cooperate 0ith go.ernment to estalishen.ironmental programmes and disaster planning methods%

(lum,Shane C%

$88 a% ?eople and organi*ation4 <eadership, +rientation, Team0or)% % Ser.ice 1uality and customers4 Customer ser.ice, uality, Customer

preferences%

c% Strategies and operations4 2ranchising, Target mar)ets, Technology%

d% 2ood ser.ice operations4 2ood costs, !enu mar)eting, Genetically alteredfoods%

e% Education4 !aster’s program, International students%

f% Eco-tourism4 Eco-impro.ements, Tourism%

g% <egal4 Se6ual harassment, Ta6 incenti.es%

ones, ?% $888 Strategic +peration4 <ocation, integration, affiliation, configuration, organi*ation,

implementation and adaptation%

+perations !anagement4 Assets, employees, capacity 9or customer>, producti.ity,ser.ice, income 9or control>, and 1uality%

in-'hao,

:ang anding, :ang

"##8 Issues4

a% +perating Issues4 <aor shortages, cost containment, increased competition% % !ar)eting Issues4 !ar)et segmentation and o.erlapping rands, increased guest

sophistication%

c% Technological Issues4 Interacti.e reser.ation systems, guest-room inno.ations,

data mining, yield management%d% Economic Issues4 ependence upon the nation’s economy, gloali*ation%

Trends4

a% 5apid gro0th of .acation o0nership%

% Integration and gloali*ation%c% &e0 management%

As referring to the Tale 3, it can e seen that the most challenge for the hotel is

operating issues pertaining human resource management 0hich is to retain 1ualified hotel 0or)er thus lo0er do0n the turno.er in the hotel% Issues regarding 0or)ers include lo0 moti.ation

causing o lo0 1uality ser.ice deli.ered to the customers% Thus, ?rahu 9$88=> suggested that

gi.ing more empo0erment to the employee helps to increase moti.ation, producti.ity and



urnout% Impro.ement on 0or)ing en.ironment 0as eing suggested y him to gi.e satisfactory

organi*ational en.ironment to the employee 9?rahu, $88=>%

In terms of challenges in mar)eting, the changing customer preferences and demand

9in*hao, "##> put a test on the hotel to deli.er high 1uality ser.ice in satisfying them% (lum

9$88> summari*ed that customers may pro.ide ser.ice solutions that meet their preferences,regular audits can identify errors and pre.ent mista)es or lo0 1uality ser.ices and lastly se.eral

)ey factors 0ere mentioned to e customer preferences 0hen staying in a hotel 0hich are

cleanliness, .alue and friendliness% The other )ey point here is increasing usage of mar)etsegmentation y not only hotels ut 2;( restaurants 0hich target on niche tra.elers 9(lum,

$88 in*hao ; ing, "##8> for e6ample 2;( restaurants di.ersify menus ased on region

0here they operated%

&e6t, it is undeniale that technological inno.ations impro.e customer ser.ice le.el and

hotel operations in many 0ays 9?rahu, $88=>% Among the challenges of )eeping up 0ith fast

changing technology includes the usage of interacti.e reser.ation system 0hich enalesreser.ation through internet and so far "# of the reser.ations in nited States made through

internet 9in*hao ; ing, "##8>% +ther inno.ations include guest-room inno.ation 0ith multiple phone lines, guest-room chec)-out are among the preference of the guests, ho0e.er it ise6pensi.e to install and implement% espite the high costs in.ol.e in installing the technology,

computeri*ed yield management help to ma6imi*e hotel’s profitaility and dataase systems can

e used for effecti.e planning 9(lum, $88>%

Then, many researchers emphasi*ed that current practice of training and education does

not meet the needs of hospitality industry in terms of pro.iding high 1uality candidates 9(lum,

$88 ?rahu, $88=>% The educator has to gi.e realistic pictures on ho0 the 0or)ingen.ironment 0ould e in hospitality industry% 2re1uently, the student’s perception 0as

unrealistic 0hen they 0ant to secure the corporate-le.el position after graduation, 0hilst in

reality an e6ecuti.e at a hotel starts her career the operations le.el% The gap et0een 0hat ise6pect and reality, al0ays ring the moti.ation do0n for ne0 employee 0hich lead to lo0

1uality ser.ice and high turno.er%

RESEARCH METHODOLOGY

This preliminary study uses in-depth, open-ended inter.ie0s through sno0all sampling to see)

information aout challenges faced y hoteliers in !alaysia% Sno0all sampling is adopted in

this study since the population is small and speciali*ed% The inter.ie0 process egan 0ith t0oe6perts in !alaysia’s hospitality industry 0ho later recommended other e6perts to pro.ide more

information regarding the su/ect matter% In total = respondents 0ere inter.ie0ed and the ac)ground of respondents is as in Tale $% The inter.ie0s 0ere recorded, transcried andcategori*ed 0ithin a 0ee), ased on inter.ie0 1uestions% Categories ased on rele.ant themes

0ere estalished after e6amination of the data% The data 0ere sorted into categories using )ey

0ords as codes%

Table 5: Ba6rou#) o+ res!o#)e#ts

Inter.ie0ee +rgani*ation esignation (ac)ground of the respondents



A

Hotel Association Senior

E6ecuti.e of

2inance

• 5epresentati.e for many go.ernment led committees to

impro.ise hotel industry%

• Association represents @$@ hotels memers throughout

!alaysia%

• The association acts as a .oice of the industry, 0or)ing as

one ody to promote protect, represent and ad.ance the

interest of its memers%

(

Hotel +0nersAssociation

E6ecuti.eirector

• The association 0as estalished since $887%

• 5epresent =" hotel o0ners in !alaysia%

• 5epresenting the interests of memers in safeguarding their

return on in.estments%

• ?romote the de.elopment of hotel industry especially in

dealing 0ith authorities on issues affecting the hospitality

industry%

C

!inistry of

Tourism, ?olicy,?lanning ;

InternationalAffairs i.ision

Assistant

Secretary• 5esponsile in planning and de.elopment of Islamic

Tourism in !alaysia%

• Committee memer for hotel ratings e.aluation%

!inistry ofTourism, <icensing

i.ision

AssistantSecretary

• 5esponsile on hotel ratings and tour operator operations%

• Committee memer for hotel ratings e.aluation%

E

Hotel A

B stars

Shariah

Compliance

E6ecuti.e

• Assists in preparing and maintaining !S $@##4"##8J and

!S $8##4"##@JJ%

• Internal Auditor for the ao.e standard%

• ?erson in charge in handling oth !alaysian Standards%

2

Hotel (3 stars

ShariahCompliace

CommitteeK

?urchasingE6ecuti.e

• Assists in preparing and maintaining !S $@##4"##8J%

• Internal Auditor for the ao.e !alaysian Standard%

J!S$@##4"##8 is Halal 2ood-?roduction, ?reparation, Handling and StorageJJ!S$8##4"##@ is uality !anagement System-5e1uirements from Islamic ?erspecti.es

CHALLENGES IN MALAYSIAN HOSPITALITY INDUSTRY

Ma7i,i8i# Re"e#ue

Hotel’s re.enues are normally collected from rooms, food, e.erage, telecommunications, rentals

and others 9refer 2igure $4 Hotel’s 5e.enue !i6>% 5oom is the hotel industry’s largest re.enue

earner and the indi.idual hotel’s most profitale department% Ho0e.er, full ser.ice properties

and resorts ha.e higher non-room re.enue as they offer many additional ser.ices 9Lallen ;Lallen, "##8>% S hotels’ main e6penses include $@ per cent for utilities 9operating cost,

management fees, property ta6es, insurance>, "8 per cent for laor, and "B per cent for food and e.erage 9S Hospitality In.estment 5eport, "##= and :al)er 5%, ohn, "##8>%

In !alaysia, laor cost is the ma/or cost, follo0ed y utilities and operating cost li)e foodand e.erage, and rooms’ department cost% As according to 5espondent A, the utilities charges

for hotels are very high, resulted in low revenue earned by the hotels" Ma&or contributor to the



utilities cost is electricity tariff charged to the hotel" The hotels are charged at commercial rate"

'nstead, the factories which normally operate in fewer hours than hotels, are charged at the

industrial rate which is cheaper than the commercial rate 9refer Tale @>" This has been an issue for many years ago, however there is still no feedback from power supplier" 'f they charge at

commercial rate, the hoteliers can make more profit and this will invite more investors to invest

in Malaysia"#

Table 9: T'e Eletriit( Tari++ Rate

Industry rate

Tariff () * Medium +oltage Peak RM28.10Tariff ()s -pecial 'ndustrial Tariff RM25.20

Commercial rateTariff .) * Medium +oltage Peak RM35.6

Source4 000%tn%com%my

5espondent ( mentioned that, the return on investment is still unsatisfactory to the hotel

owners" /ne of the contributors is the electricity tariff which result in high operating cost in

Malaysia% Most of the hotels ceased out from hotel business because of too high electricity tariff

rate% This is supported y respondent E and 2 0ho agree that the electricity costs too) up large udget in their hotels% The electricity ill of the hotel is up to $3 per cent of total hotel

operations costs and to some B and @ stars hotels it is e1ui.alent to 5!B%@ million% Thus the

hotel industry through its associations, has een re1uesting the go.ernment to gi.e them aspecial tariff similar to the industrial tariff category E" 9refer Tale B> or a special hospitality

tariff 0hich should is lo0er than the current tariff 9The Star, "= !ay "##7>%

In !alaysian hotel, electricity tariff is the second iggest e6penses and it is differed 0ith

S 0here the second iggest e6pense is food and e.erage% Go.ernment need to help the

hoteliers to reduce utilities cost so that they are ale to sur.i.e and compete in hotel industry%



Source4 9Lallen ; Lallen, "##8>%

Hu,a# Resoure Ma#ae,e#t

a% Shortage of laour

<i)e other ser.ice industries, laor constitutes one of the largest costs in hospitalityorgani*ations% In S, it is not unusual for laor costs to e6ceed 3# per cent of total sales re.enue

9:al)er, "##7>% As hotel industry’s product is ser.ice, employees are the ser.ice deli.ers 9Lan

Hoof, !conald, Lallen, ; :iener, "##>% So the employer has to ensure they train, moti.ate

and ac)no0ledge employee to enale them deli.er ser.ice of e6cellence% nhappy 0or)ers arenot moti.ated to gi.e good ser.ice, neither are poorly treated or unac)no0ledged 0or)ers%

5eali*ing this, successful hotels regard their 0or)ers as their greatest assets% As according to

Goldsmith and !ohd% Salehuddin 9$88B>, !alaysia suffered from acute shortage of s)illedemployees% Study sho0n that not many !alaysian are 0illing to 0or) in ser.ice industry

especially in hotels 9Goldsmith ; !ohd Salehuddin, $88B>% This is agreed y all of the

respondents supporting that employee is important in deli.ering good ser.ice, thus ha.ingemployee 0ith good moti.ation is crucial to gi.e est ser.ice%

5espondent A highlighted that we are having problem with the labor in Malaysia" Theydo not want to work in hotel industry" Malaysian would rather work in the offices than in the

service industry like hotels" 5espondent ( supported this and added the government limit to only0 foreign workers depending on the si1e of the hotel" The regulation limits foreign workers to

work as back liner and not front liner such as waiter and front office staff" -o the hotel industryis suffering from shortage of workers" This will directly affect the service %uality"

The scenario is e6pected y Goldsmith and !ohd Salehuddin 9$88B> 0hen theye6amined the s)illed laour supply after the go.ernment’s effort in putting !alaysia as one of

the tourist destinations in $88B% This is ecause the hospitality education started late, only in



$8= y the !A5A Institute of Technology, offering diploma and certificate courses% Ho0e.er,

the situation today is far etter 0hen many pri.ate and pulic institutions offered hospitality

degrees% Still, after B3 years of the hospitality education started, !alaysia is ha.ing shortage ofs)illed laour supply%

+ne of the reasons is the lo0 numers and poor transfer rate of graduates into theindustry% This is perhaps due to the perception of ne0 hospitality students 0ho ha.e an

unrealistic image of 0or)ing life in the industry and e6pect a different 0or)ing en.ironment

from 0hat the hotel can offer 92raser, !ohd 'ahari, +thman, ; 5ad*i, "##>% Thus the industryand go.ernment ha.e to educate the students sufficiently aout careers and 0or)ing conditions in

the hospitality industry% This 0ill reduce high e6pectation of a hotel careers from the prospecti.e

employees%

% Employee !oti.ationHotel industry is not only suffering from shortage of laour ut they also suffer from lo0

moti.ation of the hotel employee% 5espondent ( highlighted that the go.ernment should deli.ermore information, educate and create a0areness on the 0or)ing en.ironment of hotel industry tothe school students% This is agreed y respondent E and A% 2or e6ample, respondent E said,

2otel staff doesn3t have pride in their career % They often refuse to ser.e their relati.es or family

or friends as customers 0hen they .isit the hotels% It 0ill distur on the effecti.eness ofrestaurant operations in hotels%

As !alaysia is geared to0ards the de.elopment of human capital, this issue 0ill affect

the ser.ice deli.ery to the hotel customers mainly tourists 9Tai, "#$#>% At macro le.elgo.ernment should encourage more professional education for hotel industry% This 0ay

!alaysia 0ill ha.e a professional hotel 0or)ers supply% A0areness on the 0or)ing en.ironment

and condition 0hile 0or)ing in the hotels has to e highlighted to the school students so thatthey 0ill ha.e clear picture on the commitment le.el they need sho0 to 0or) in the hotels%

Hopefully, the le.el of 1uality 0ill e impro.ed and resulted in satisfying customers% Since

tourism is second contriutor in foreign direct in.estment and the iggest sector in ser.ices, lo0ser.ice 1uality affect directly on numer of tourist arri.als%

Ho0e.er, hotels at micro le.el too ha.e to impro.e their training programme, orientation

programme and impro.e remuneration to their employees as these steps can increase retentionrate of hotel employees 9?rahu, $88=>% As according to Hogan 9$88"> hotels are not paying

attention on the emotional and information needs of the ne0ly employeed staff% He also

suggested that hotels should emphasi*e on ongoing training and education, employee

empo0erment, open communication 0ith management, and appreciation for accomplishment9Hogan, $88">%

Go"er#,e#t Reulatio#s

a% !inimum 5ate



All respondents agreed that competition among hotels no0adays are stiff, 0ith the changing

needs and preferences of customers, hotels need to cope up 0ith the demand and inno.ate y

deli.ering satisfying ser.ices to the customers% :hile the operating cost is increasing, ho0e.er,they are tied up 0ith the rate that they are ad.ised to charge guests only S7#% All respondents

felt the rate is too cheap and not enough to co.er the costs% 5espondent C mentioned that, in

+ietnam, you will not get 4-5!0 for the stars accommodation, it is 4-500 and more#%!a/ority of other respondents also agreed 0ith this statement and e6pressed it is time for the

go.ernment to increase the minimum suggested rate for @ star hotel%

% +ld and &e0 hotel dilemma

As mentioned earlier, the competition is stiff in this industry, 0hen the go.ernment set the lo0est

rate at S7#, it intensify the competition% The old hotel 0ill lose in competition 0ith the ne0hotel% 5espondent ( e6plained that the customers 0ill definitely choose to stay at a ne0 hotel

rather than paying the same rate 0ith an old hotel% &e0 hotels offer ne0 furniture, latest interior

concept, use up-to-date technology and add on ne0 ser.ices rele.ant 0ith the needs of itscustomers, 0hile the old hotel is as it 0as @ years ago 0ith limited ser.ices, ac)dated

technology and dull interior design% +.iously, the old hotel cannot compete and sur.i.e 0iththe ne0 hotel, so they ha.e no choice ut to refurish and upgrade the hotel%

c% Ta6 Incenti.e

+nly respondent ( highlighted that, the refurbishment of old hotel enable them to get some ta7allowance in the income ta7, however only three times refurbish or renovations are allowed to

get this allowance#% Thus, many indi.idual hotel o0ners 0ill sell the hotel after 3 times of

refurish, as they pro/ect lo0 profit in the long run% Go.ernment has to consider gi.ing ta6allo0ance for hotel e.ery time they do refurishment% Hotel refurishment play ma/or roles in

attracting tourist to come to !alaysia and it estalish good image of !alaysia in term of ser.ices

offered in the eyes of the tourists%

Hotel O!eratio#s

+nly one area mentioned y one of the respondents is aout hotel operation 0hich is related to

the loy area pertaining to the concierge des)% The concierge is a uniformed employee of thehotel 0ho has her or his o0n separate des) in the loy or on special concierge floors% The

concierge is a separate department from the front office department% Ser.ices gi.en y the

concierge includes ad.ice on local information 9eg% restaurants, aciti.ities, attractions, amenitiesand facilities>, airline tic)ets and reconfirmation of flights, LI?’s re1uests li)e shopping, actually

almost anything that the guests 0ish for 9:al)er, "##7>%

In !alaysia, some hotels offers ground arrangement for tour and often it is handled y

concierge% Ho0e.er, recently ig hotel for e6ample, Genting Group, <egend Hotel and DT<

ha.e susidiaries to handle tour operating companies% Thus, the tour operating companies ma)euse of the hotel loy to do sales of their touring pac)ages% As according to respondent ,

tourists complained as they are uncomfortale 0hen tour operating companies urge them to

purchase the tour pac)ages and the loy loo) so usy 0ith loud noise% She said, the



government is looking into this matter as it create bad image for Malaysia and affect tourist

arrival"

Ser.icescapes 9physical en.ironment in ser.ice setting> 9(itner, $88"> is one of the

criteria that customer loo) into 0hen ma)ing purchasing% It affects customer eha.ior to0ards

purchasing certain ser.ice and product 9otler, $83>% <ater in $88", Saunders and 5enaghanenhanced that hotel loy is .ery influential and the top attriute in dri.ing the hotel purchase

decision 9Saunders ; 5enaghan, $88">% Thus !alaysian hotels need to address this issue, y

impro.ing ser.ice 1uality and attracting more tourists to .isit !alaysia% As a suggestion, hotelsshould thin) of allocating a proper office for touring pac)ages not /ust a representati.e des) to

ma)e the loy loo) 0elcoming% It 0ould e .ery systematic if there is a specific criterion

addressing this issue in the !alaysian Hotel 5ating System%

ISSUES AND TRENDS IN HOSPITALITY INDUSTRY

a% Technology

&o0adays most of the hotels use online reser.ation system is to enale customers ma)e their

reser.ation online% +ne respondent 9> highlighted that recently, there 0ere complaints y

tourists on reliaility of online reser.ation system for hotels in !alaysia% They did thereser.ation and pay in the internet through the online reser.ation system, ut 0hen they come to

the hotel, they cannot find their reser.ation and payment% This tarnished the image of !alaysia

as most independent tra.elers use online reser.ation system to get their hotel in ad.ance%

Go.ernment has to introduce rules and regulations regarding online reser.ation system, tomanage this issue efore it is too late and ecome a prolem%

% Green Hotel

The gloal call for green hotel, push !alaysian hotels to practice en.ironment friendly in

deli.ering ser.ices% All respondents agreed that this is a ne0 concept in trend gloally andhighly demand y foreign tourists% 5espondent C and mentioned that the go.ernment has

already estalished the green hotel rating system and it is to e launched in une this year%

Impressi.ely, $# of the hotels are already rated as green hotel and in a competition recently held,

many of them get the a0ards% !alaysian go.ernment acts 1uite fast in introducing green hotelrating system as green hotel is among ne0 issues and e6pected to stay in demand y many

e6perts%

c% Halal 5estaurant

The encouragement for hotel to otain Halal certificate for its restaurant or 2;( outlet is seen asa good one at the right time% 5ecently, !alaysian go.ernment announced that only hotel 0ith

Halal certificate for restaurant can cater the go.ernment functions% The effect of the

announcement sho0s many hotels 0ould li)e to otain Halal certificate as to not losingopportunities 0ith the go.ernment e.ents% Ho0e.er the issue is that AI!, a ody 0hich is

responsile to grant Halal certification, are unale to process the applications 1uic)ly 0hile the

re1uirements of Halal certification is not friendly to hospitality industry, 0hich ma)e it too

difficult for the hotel to apply%



!a/ority of the respondents ha.e the same opinion that AI! needs to simplify the

process and re1uirement otaining Halal certificate% 5espondent A and ( highlighted that

currently, AI! is addressing this issues and continuous discussion among sta)eholders ofhospitality industry is going on to impro.e the Halal application system% This mo.e 0ill oost

!alaysia image as one of top tourist country among !uslim tourists for e6ample from !iddle

East since their preferred tourist destination change from holidaying in the :est efore to Eastno0adays, and !alaysia is second in the list of !uslim tourist destination%

CONCLUSION

In general, hotels in !alaysia are eing challenged in ma6imi*ing re.enue, go.ernmentregulations 0hich lead to ne0 and old hotel dilemma, minimum room charged rate at S7#

and also ta6 incenti.e in reno.ation of old hotels and human resource management especially on

employee moti.ation and shortage of laour and lastly, on hotel operations 9concierge>% Amongthe issues found in this study are firstly, increasing demand on Green hotel, secondly, hotel

restaurant in getting Halal certificate and lastly, the usage of technology specifically onlinereser.ation system%

Competition in hospitality is stiff at national le.el, it is also .ery hard in the region of

Southeast Asia hence, and !alaysian go.ernment has to stay alert and pro.ide solutions to thechallenges hotels faced for e6ample, gi.e more attracti.e ta6 incenti.e to impro.e old hotels

facilities, uni.ersities and colleges should create a0areness on hotel 0or)ing en.ironment for

fresh graduates so as to impro.e laor shortages and supply of highly s)illed employee in hotels,

go.ernment need to loo) ac) at the minimum room charges and raise it at the acceptance le.elat par 0ith the international rate% Some issues mentioned ao.e re1uire attention from the

specific go.ernment agency li)e a)im on the Halal certification issues and !+T+5 to

impro.e on legislation of online reser.ation system in !alaysia% Addressing these issues andchallenges 0ill ma)e !alaysia as a top in the list of the chosen destination for tourist

internationally%

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Issues and challenges in malaysian hotel operations Nor zafir.doc