Kuala Lumpur’s hotel room stock to grow 18% by 2025

Over 80% of the hotels entering the market in 2023 are upscale.

According to a JLL report, hotel room inventory in Kuala Lumpur is expected to grow 18% between 2023 to 2025, assuming all proposed projects materialise. Many owners have also re-invested in their hotel assets in the past two years and this has changed the quality and distribution of hotel inventory in the market. 

Of new supply entering the market between 2023, JLL said 81% of hotel rooms are in the upscale segment, and the remaining 19% are in the midscale segment. Major luxury project openings, such as Regent KL and Kempinski Hotel KL, have been delayed to 2024 onwards.

Here’s more from JLL:

Revenue per available room (RevPAR) has recovered significantly in March 2023 as compared to the same period in 2022. RevPAR has risen by 195.6% y-o-y, driven by an improvement in occupancy by 36.9 percentage points and a 21.6% rise in average daily rate (ADR), due to the reopening of borders in the region.

Upcoming developments in Kuala Lumpur, including the Merdeka 118 and TRX, as well as the MRT and LRT expansion are expected to enhance connectivity and better position Kuala Lumpur as a financial hub to boost tourism.

Outlook: Hotel market on the runway to full recovery

While 2023 is expected to be a year of headwinds and full recovery of the tourism sector is not anticipated, a steadily increasing number of international visitor arrivals should lead to a higher international-to-domestic guest ratio in the year ahead.

In January 2023, Malaysia opened special lanes for travellers from Mainland China given the reopening of its borders. While the number of international arrivals from Mainland China has yet to recover to pre-pandemic levels, we expect the move to aid in Kuala Lumpur’s steady recovery in hotel performance.

Note: Kuala Lumpur Hotels refers to Kuala Lumpur's luxury and upscale hotel market.