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Kuala Lumpur bans new hotels over supply fears

The Malaysian capital has suspended licences to build new hotels as the market is saturated

Pictured: Kuala Lumpur

Kuala Lumpur has indefinitely suspended licences to build new hotels due to an oversupply.

Mayor Seri Mohd Amin Nordin Abdul Aziz says that too many hotel projects have already saturated the market in the Malaysian capital, with many more under construction or to commence building soon. As a result, the city is one of the best bargains in Asia for event organisers.

“There is an oversupply of hotel and office spaces in Kuala Lumpur and we have been advised by the government to be strict on this, so we will not be giving any more development orders for hotels until further notice. From here on, we will advise the developers to look at other forms of development when they submit new applications,’’ explained Amin Nordin. The stalled Grand Duta Hyatt hotel project has been cleared, only one of two to be given the green signal in the last six months.

Kuala Lumpur currently has 939 hotels, of which an overwhelming 400 are budget hotels. Current room inventory across all categories of hotels is 56,000, which according to City Hall, is adequate to provide accommodation to the projected 12 million visitors to the city in 2016.

The Malaysian Association of Hotels Kuala Lumpur chapter chairperson, Shirley Lai, said the freeze on hotel licences was applied at a good time as it would give breathing space for the market to improve.

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