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Student’s Name MARDUWATI ISMAIL

Teaching Centre EIM PJ

Course Name ENTREPRENEURIAL MARKETING

Subject/Module MKT Assignment Due 7TH MARCH 2015 Date Facilitator HAJEMI HASSIM

I, the above-named student, hereby confirm that this assignment is my own work, has been expressed in my own words and has not previously been submitted for any assessment. And where materials from other sources have been used in this assignment, they have been appropriately acknowledged.

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MBA ASSIGNMENT MARKING SHEET

Student's Name Teaching Centre Program Subject/Module Assessor

Knowledge and understanding of concepts referred to, application of principles and their influence on the assignment, correct citations from sources and acknowledgement

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Application of said examples, including analysis and evaluation of the examples based on and including the final recommendations and their justification

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How well was the example described, including the extent and depth of information and data that was accessed

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Presentation and structure of the whole assignment

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Language and Grammar

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General Comments: Total LESS: Penalties GRAND TOTAL /100 TABLE OF CONTENTS

1) Executive Summary 2) Introductions of background 3) Malaysia Tourism Industry Overview i) The Hotel Market in Kuala Lumpur ii) Future Hotel Supply in Kuala Lumpur 4) The product i) Market Segment ii) Distribution Channel & Geographic Source of Origin 5) SWOT analysis & Competition Analysis 2015 i) Market Share Index 6) Sales Objectives i) Budget 2015 ii) Profits Analysis 7) Marketing Strategy Product i) Corporate Account : Price/Place/Promotions/People ii) E-Biz Account : Price/Place/Promotions/People iii) People : service Initiative 8) Conclusion 9) Reference 10) Appendix

EXECUTIVE SUMMARY

This Entrepreneurial Marketing assignment is focus on a Marketing plan for a Frasers hospitality Pte Ltd (Frasers) unveiled a bold new hotel concept in Malaysia targeted at meeting the 24x7 lifestyle needs of today’s e-generation of business travellers, who seek amenities and an experience beyond what is typically available.

Located in the newly transformed Bangsar South district, and surrounded by a myriad of entertainment and recreation options, including the new Nexus Mall and a six-acre park, the spacious and refreshing Capri by Fraser, Kuala Lumpur, marries the complete range of facilities and services of a smart hotel with the comfort and convenience of a full serviced residence, in a unique Hotel Residence experience.

Capri by Fraser Kuala Lumpur is set in a 33-storey tower offering 240 spacious studios and apartments, all equipped with kitchenettesin stylishly designed living and dining room spaces for work and leisure. The property offers stunning city views of Kuala Lumpur with a rooftop bar, infinity swimming pool and private Jacuzzis making it a destination in itself. Each floor has a Spin & Play laundrette, where guests have an array of entertainment options available in between spin cycles, a 24-hour gymnasium with a Yoga Room and Kickboxing Room, Treat Suites facilities to recharge and relax, and an integrated ‘PLAY’ area with gaming consoles and foosball provides guests with freedom and flexibility towards their lifestyle demands.

1. Introduction: Company Background

Fraser Residence Kuala Lumpur is owned by Frasers Centre point Limited is an international real estate company with a portfolio that spans residential, commercial, hospitality and industrial asset classes. We invest in, develop and manage properties in over 35 cities across Europe, Australia, Asia and the Middle-East. Our established focus on our three core markets of Singapore, where they are listed and have our roots, Australia and China, is driven by the strong market fundamentals that characterise these territories. Over the years, they have developed an intimate knowledge of their core markets and also of their secondary markets of the United Kingdom, Vietnam, Thailand and Malaysia.

They are bound by a common objective across our diverse geographic footprint to develop real places for real people. Places that are inclusive, where young and old alike can live, work and play. They are proud of the contribution they make to the cities they have operate in, from providing homes for families and accommodation for travellers, to efficient spaces that allow businesses to thrive and malls that serve the needs of local communities.

Their diverse portfolio, active management of assets across segments and geographies, and ability to strike the right balance between development, income-yielding assets and optimising capital through our Singapore-listed REIT platforms, allow them to generate quality earnings throughout the entire real estate value chain. Combined with their financial and operational discipline, and the thoughtful execution of our strategies, their aim to deliver value to their stakeholders and the communities they serve.

They have a clear vision of the path ahead. With fully experienced management team, proven expertise in multiple asset classes, and sound financials, mean they are well equipped to continue growing and creating innovative real estate solutions for today and tomorrow.

Conveniently located at Jalan Cendana right in the heart of Kuala Lumpur’s central business district, Fraser Residence Kuala Lumpur is one of the newest serviced residences in town developed to meet the needs of travellers looking for long-term or short-term stay, for business or for leisure.

Each of the 445 Gold-Standard serviced residences features a contemporary and minimalistic design with sleek interiors, a comfortable living room, a fully-equipped kitchen and ensuite bedroom(s), all well furnished with modern conveniences.

Set within a vicinity that matches that of hotels near Petronas Twin Towers and surrounded by business amenities, shopping malls, tourist attractions and rich cuisines, Fraser Residence Kuala Lumpur is a residence ideal for the discerning traveller ever ready to explore the city’s endless array of activities.

2. Malaysia Tourism Industry Overview

The Malaysia tourism report examines a range of key indicators for this rapidly expanding market in the midst of the highly competitive Asia Pacific region. They are forecasting healthy growth in inbound and outbound travel throughout our forecast period to 2018, leading to high rates of tourism related expenditure and a steadily improving industry value. Along with domestic economic growth, this indicates a very positive potential investment environment.

Malaysia was targeting arrivals of 28mn in 2014 - we expect that the country will fall a little short at 27.1mn though this is still healthy growth of 5.2% compared to 2013 arrivals. Malaysia government is highly supportive of tourism, and is targeting annual arrivals of 36mn by 2020 (with tourism related income of MYR168bn). Effective marketing campaigns are raising the country's global profile, including the new '2015 Year of Festival' which will highlight a range of cultural events over the months to come. Malaysia is also actively courting arrivals from key market China, and is considering waiving visa requirements for groups of Chinese tourists. An easing of visa regulations is also being considered for members countries of the Organisation of Islamic Cooperation.

China and several other Asia Pacific countries currently dominate arrivals to Malaysia. The country benefits from a multitude of regional travel connections, across road, rail and air travel and is a relatively affordable destination in the area. Arrivals from all areas are expected to increase throughout the forecast period and we expect annual arrivals to increase from 28.5mn in 2015 to 33.8mn in 2018 - though we note Malaysia remains vulnerable to a global economic downturn.

Malaysia's domestic economic outlook is positive, with robust GDP growth of around 4% per year expected over the next few years. At the same time private financial consumption is on the increase and we are seeing greater volumes of outbound travel. Most are destined...

Locations

Marketing Malaysia as a destination of excellence and to make the tourism industry a major contributor to the socio-economic development of the nation."

Tourism Malaysia's objective is to promote Malaysia as an outstanding tourist destination. Malaysia aim to showcase Malaysia's unique wonders, attractions and cultures; develop domestic tourism and enhance Malaysia's share of the market for meetings, incentives, conventions and exhibitions (MICE). Our ultimate goal is to increase the number of foreign tourists to Malaysia, extend the average length of their stay and so increase Malaysia's tourism revenue.

Tourism Malaysia aims to encourage tourism and its related industries in Malaysia. It is hoped that this would help promote new investments in the country, as well as provide increased employment opportunities. The growth of tourism would also contribute positively to the country's economic development and quality of life.

Our Value

The Best of Malaysia Awards

Malaysia officially awarded as Best of Malaysia Awards 2014 has been officially announced where this year’s Expatriate Lifestyle’s BOMA 2014 was held at Club Esperance, Fraser Business Park in Kuala Lumpur, Malaysia on the 30th October.

The Best of Malaysia Awards or BOMA is also organised yearly by Expatriate Lifestyle, Malaysia’s number one expatriate magazine, The Best of Malaysia awards are the biggest awards celebrating the finest in the travel and hospitality industry but independently organised and not officially endorsed by the tourism ministry of Malaysia. The biggest recognised tourism awards in Malaysia is the Tourism Malaysia Awards which is held every two years.

The awards are 100 per cent nominated and voted by well-travelled expatriates who live in Malaysia and this year, a record-breaking 30,000 votes were cast over 18 categories, all chosen from shortlists over a 13-week voting period which ended on October 1, 2014.

A total of 18 winner trophies and 54 Excellence Award certificates were presented by Ian Johnston, Editor of Expatriate Lifestyle; Bruce Dallas, Marketing Director of Guinness Anchor Breweries, and guest of honour, the newly appointed British High Commissioner to Malaysia, H.E. Vicki Treadell CMG MVO.

Malaysia Wins Lonely Planet Travel Awards 2014

Malaysia has won the title for Best Family Destination at the Lonely Planet Travel Awards 2014 held recently in Mumbai. The Director of Tourism Malaysia India Manoharan Periasamy who received the award on behalf of Malaysia said the award was a significant recognition of Malaysia’s accomplishment in promoting the country as one of the leading family destinations in the Southeast Asia region.

“The rapid development of various theme parks and children entertainment centres in Malaysia such as Lego land, Puteri Harbour Family Theme Park, Kidzania, and i-City, to name a few, is a testament to the fact,” he said. Hosted by the world’s leading travel and lifestyle magazine, the final winners were chosen by the readers after the nominees were shortlisted by an expert panel.

“Lonely Planet recommendations are the most sought after by travellers and to be chosen by their readers makes this award even more prestigious,” he added. The Lonely Planet award is a significant achievement for Malaysia, a country that prides itself for being the perfect family destination. Be it shopping, adventure, theme parks or even golf, Malaysia is one place where the preferences of every member of the family are taken care of.

Safety, Stability & Security

Malaysia attracts a number of our clients with its large, literate, young and largely urban population, which equates to a healthy labour market. Foreign workers and businesses are relatively safe as Malaysia has lower crime rates than most other emerging market economies in Asia. Companies also benefit from the country’s high quality transport network, with well- connected ports via inland transport to major economic hubs and neighbouring countries.

Our coverage, using our unique Total Analysis model, ensures that our clients make sound, risk- assessed decisions in Malaysia. We keep our clients informed of the latest market moves and political developments, supported by our interactive data and forecasting. Clients also benefit from in-depth analysis of 23 of Malaysia’s most important industries, as part of our 'top-down' and 'bottom-up' perspective. We aim to keep you, as one of our clients, always one step ahead in Malaysia.

Infrastructure Development

The Kuala Lumpur International Airport 2 (KLIA2) is the world's largest Low-Cost Carrier Terminal with 45 million passenger capacity, aerobridges, and 68 contact stands, 8 remote stands, fully-automated Baggage Handling System, 3 Runways, Air Traffic Control Tower, provision for A380 operations, substantially enhanced comfort level, Green building with LEED (Leadership in Energy & Environmental Design) certification, and many state-of-the-art facilities.

Bukit Bintang - KLCC Pedestrian Walkway in KL - KLCC Attractions

Bukit Bintang - KLCC Pedestrian Walkway is a 1.173km-long pedestrian bridge that connects Pavilion KL to Impiana KLCC Hotel and the Kuala Lumpur Convention Centre. The other portion of this walkway is a pedestrian tunnel on the convention centre’s concourse level linked to Suria KLCC shopping centre.

Also known as the Pavilion-KLCC pedestrian bridge, there are several entrance and exit points (escalators and staircases) along the bridge: one is located at Connection (an al-fresco dining and entertainment strip at Pavilion KL), while the others are at busy areas such as Jalan Pinang, Jalan Perak, Jalan Raja Chulan and the KL Convention Centre. Also accessible via this bridge is the Raja Chulan monorail station and the KLCC LRT station.

Kuala Lumpur Tourist Friendly

With the Bukit Bintang-KLCC Pedestrian Walkway people can travel safely, conveniently and comfortably on foot from Bukit Bintang all the way to the Kuala Lumpur city centre. In short, the bridge links the Kuala Lumpur city centre (KLCC) and Bukit Bintang: two major retail and tourism spots. It takes 15 to 20 minutes to walk across the five-metre wide, air-conditioned bridge.

Meanwhile, from the KL Convention Centre, it takes visitors less than a few minutes to access a number of KL landmarks such as the Suria KLCC shopping centre, PETRONAS Twin Towers, KLCC Park and more.

From the Bukit Bintang-KLCC Pedestrian Walkway you can see the KL City Walk, a 1,200ft- long F&B, retail and entertainment strip located between the KL Convention Centre and Jalan P. Ramlee. Photo enthusiasts will be glad to know that the bridge offers some pretty good views of the KL city centre’s architecture.

Attractions of Kuala Lumpur Plan

Massive development of Mass Rapid Transit (MRT) & MRT Line 2 the extension of the Light Rapid Transit in Kuala Lumpur city centre will provide convenience and flexibility for visitors / tourist phase one and two are MRT Sungai Buloh-Serdang-Putrajaya Line. The MRT project are the largest infrastructure development ever undertaken by Malaysia Expected to be complete by 2020, the project would cover a radius of 20km from city centre and the connectivity will increase by MRT for better accessibility to, from and within the city.

Kuala Lumpur Convention Centre

Since opening its doors in June 2005, the Kuala Lumpur Convention Centre (the Centre) has grown by leaps and bounds to become Malaysia’s leading convention facility.

With its feature entrance on Jalan Pinang, the Plenary Hall is the Centre’s signature centrepiece. Internal entrances at several points make for easy access and transfer to other areas within the Centre. The Hall is ideal for keynote sessions, opening ceremonies, concerts and product launches. Spanning 2 levels, it is comfortable for audiences of 800 delegates to its capacity of 3,000.

The Centre’s achievements have been, and continue to be, acknowledged as evidenced by the awards, accolades and certifications received to-date.

 "Best PR Award 2013" by International Congress and Convention Association (ICCA)  "Purpose Built Convention & Exhibition Centre Award for Excellence" by rAWr (Recognising Award Winning Results) Awards 2013  Kuala Lumpur Mayor Universal Access Award 2013  "Dato Lau Foo Sun Excellence Dining Award" by Chaine Des Rotisseurs Malaysia 2012  “Best Print Advertising Campaign (Gold)” by Meetings Industry Marketing Awards (MIMA) 2012  “Best Convention Centre in Asia” by MICE Report Awards 2012  “Best Congress and Convention Centre – Asia” by Business Destinations Travel Awards 2011  “Best Use of Budget (Bronze)” by Meetings Industry Marketing Awards (MIMA) 2011  “Best Convention & Exhibition Centre” by TTG Travel Awards 2011  The Brand Laureate for Country Branding Awards 2010-2011  “Best Mice Venue 2010” by Malaysia Association of Convention and Exhibition Organisers and Suppliers (MACEOS)  “Malaysia’s Prominent Brand Award 2010” by Malaysia Independence Award 1957  “Best Marketing Campaign (Gold)” by Meetings Industry Marketing Awards (MIMA) 2009  “Best Use of Budget (Silver)’”by Meetings Industry Marketing Awards (MIMA) 2009  "Asia’s Best Convention and Exhibition Centre” by CEI Industry Awards 2009  "Asia’s Best MICE Sales Team (joint 3rd)” by CEI Industry Awards 2009  "Best Exhibition and Convention Centre in Asia" by Travel Weekly (Asia) Industry Awards 2008  “Best CD-ROM/DVD (Bronze)” by Meetings Industry Marketing Awards (MIMA) 2008 “Brand Excellence in Product Branding - Convention Centre” by The Brand Laureate Awards 2007-2008  "Best Exhibition and Convention Centre in Asia" by Travel Weekly (Asia) Industry Awards 2007

Convention Facility

 Tiered-seating for 3,000 over two levels (2,000 on the lower level and 1,000 on the balcony)  Technologically-advanced audio visual, sound and lighting systems, built-in rear projection facilities and screen  Digital conference voting systems in front section of seats (802 seats)  Interactive microphone system  Writing tablet in all seat arms  Built-in simultaneous interpretation system for up to 6 languages (including stage language)  Fixed stage with floor loading of 7.5kN/m2 and orchestra pit  Proscenium arch 16m wide x 8m high  Backstage support facilities and secure VIP entrance  Full fly tower with motorized rigging system

Seating Capacity

 Seating capacity  Total seating capacity is 2,994  Lower tier has 1,973 seats which can be reduced to 1,110 using a mesh curtain.  The AV console area occupies 27 seats  Upper tier has 944 seats  Thrust stage has 77 seats

MATRADE CENTRE

Matrade Exhibition & Convention Centre (MECC), located at the base of MATRADE’s 24- storey architectural icon with a unique archway design through the building. The MECC complex houses MATRADE Hall, 3 Exhibition Halls, 9 Function Rooms, a Theatrette and an Amphitheatre.

Covering more than 100,000 square metres, MECC is equipped with technologically advanced facilities and is one of the best venues for Meetings, Incentives, Conventions and Exhibitions with emphasis on Trade-Centric events.

Venue Type Convention Centre

Brand Independent

Distance from Airport 64.4 Kilometres

Number of Meeting Rooms 14

Meeting Room Space 10,000 Sq. Mtr.

Tourist Arrivals -Departures Malaysia

YEAR ARRIVAL RECEIPTS (RM) 2013 81% RM65.44 billion 2012 RM51.5 billion Source: Tourism Malaysia 2014

MEDIA RELEASE

MALAYSIA REGISTERS 25.7 MILLION TOURISTS AND RM65.44 BILLION TOURIST RECEIPTS IN 2013

KUALA LUMPUR, 27 February 2014 – Malaysia’s tourism industry performed above expectations in 2013, with tourist receipts of RM65.44 billion exceeding the initial target of RM65 billion. The 8.1% growth from RM60.56 billion in 2012, represents an expansion of about RM4.89 billion in foreign exchange earnings.

Meanwhile, tourist arrivals also grew by 2.7% to 25.7 million (25,715,460) arrivals compared to 25.0 million (25,032,708) arrivals in 2012 despite a challenging year.

“We are pleased to achieve such a substantial growth in tourist receipts last year. This is in line with the broad objectives of the National Key Economic Areas (NKEA) and Malaysia Tourism Transformation Plan (MTTP) to increase yield per tourist. Last year, the average tourist spending per capita was RM2, 544.90 per person compared to RM2, 419.10 per person in 2012,” said the Minister of Tourism and Culture Malaysia Dato’ Seri Mohamed Nazri Abdul Aziz.

He added that tourism was the sixth largest contributor to the economy moving up one spot compared to 2012. It contributed RM51.5 billion to Gross National Income (GNI) in 2013.

He attributed the growth in tourist arrivals and spending to the Government’s focus on the initiatives under National Key Economic Area (NKEA) Tourism including the promotion of Malaysia as a duty-free and affordable luxury shopping destination, as well as the concerted efforts through the strategic public-private partnership to position and brand Malaysia as the top- of-mind destination for business and leisure. The ASEAN market remains the largest contributor with 19.1 million arrivals, representing a 74.3% share of the overall tourist arrivals to Malaysia. The medium-haul market was the second largest market with 4.9 million arrivals followed by the long-haul market with 1.7 million arrivals.

Top 10 Tourist Generating Market from January to December 2013

Country Number of Tourist Singapore 13,178,774 Indonesia 2,548,021 China 1,791,432 Brunei 1,238,871 Thailand 1,156,452 India 650,989 Philippines 557,147 Australia 526,342 Japan 513,076 United Kingdom 413,472 Source: Tourism Malaysia 2014

Markets showing double digit growth in arrivals were mainly from the medium and long- haul countries with

Country Double digit growth in arrivals - Malaysia

Turkish Arrivals surging by 28.9% assisted by the seven weekly direct flights from Istanbul to Kuala Lumpur by Malaysia Airlines and Turkish Airlines, as well as the re-opening of Tourism Malaysia Office in Istanbul.

China Other markets showing strong growth include China (14.9%) which benefited from the new six weekly direct AirAsia X flights from Shanghai to Kuala Lumpur and another seven weekly direct AirAsia X flights from Hangzhou to Kota Kinabalu.

Swedish Tourist arrivals saw an increase of 13.1% on the back of strong promotional efforts there, in addition to the thrice weekly flights from Stockholm to Istanbul and Kuala Lumpur by Turkish Airlines beginning April 2013, as well as the seven weekly Emirates flights from Stockholm to Dubai and Kuala Lumpur, which started last September. Bangladesh (55.7%), Cambodia (28.6%) Iraq (27% Egypt (25.3%) Russia (18.8%) Ireland (13%), Vietnam (11.7%) Norway (11.6%) Spain (10.9%) Source: Tourism Malaysia 2014

The Hotel Market in Kuala Lumpur

Hello KL e-newsletter will be published on a bi-monthly basis. Staying in KL is very affordable and comfortable. With a large variety of accommodations options, visitors will find the most luxurious local and international brand hotels to budget hotels and back-packer inns and everything in between.

KL is a world-class shopping destination that has attracted millions of people from around the world to come here each year to indulge in some retail therapy. In 2013 CNN Travel ranked it as the 4th Best Shopping City in the World. The judging for this award was based on four criteria, namely ease of getting around, value for money, variety and overall experience. Having scored highly in all criteria, KL was the only city that was awarded full marks for ‘value for money’. The Global Shoppers Index also voted it as the 2nd Best Shopping Destination in Asia Pacific in 2012.

Because of its cosmopolitan population and diverse cultural heritage, Kuala Lumpur is a melting pot of diversity that shows most evidently through its food. Along with the local flavours that stem from Malay, Indian and Chinese cooking, there is also a huge choice of international cuisine available. There is a range of fine dining restaurants serving French, Italian, Mediterranean as well as other European fare that puts the city on world gastronomical map. There is an equal choice of Asian restaurants that include Japanese, Korean, Chinese and Indian among others.

Total Supply of 3-5 Star Hotel in KL City

Source: Zerin Property Research The second half of 2012 witnessed the opening of six hotels in all three to four star category which corresponds to the Government’s target to increase 3,000 four and five star hotel rooms in Malaysia by end of 2012 in order to be parallel with the long-term target of creating an additional 37,000 four and five star hotel rooms by 2020.

As of December 2012, the total hotel rooms in Klang Valley stand at 41,491 following the opening of the much waited 370-rooms Grand Hyatt Kuala Lumpur, 300 rooms Royale Bintang Damansara, debut of two Ibis Styles hotels namely 156-rooms Ibis Styles Cheras and 500-rooms Ibis Styles Fraser Business Park, 302-rooms Vivatel Hotel and the reopening of the iconic 300- rooms Majestic Hotel.

From the current total of 41,491 rooms, about 30,144 rooms or 72.65% are located within Kuala Lumpur (KL) and the remaining 27.35% (11,347 rooms) are located outside the city limits (OKLC).

The current supply of 3-star, 4-star and 5-star hotel rooms in Klang Valley stands at 9,412, 13,694 and 12,401respectively. As for the budget hotel, presently there are about 5,984 rooms within Kuala Lumpur City

Average Occupancy Rates for 3 – 5 Star Hotel in Klang Valley Area

Source: Zerin Property Research

The Average occupancy for 5-star hotels in Klang Valley during 2H2012 was at 70%, increased from 68.48% that was recorded during 1H 2012 but declined slightly from72.94% that was recorded during the corresponding period last year.

The occupancy rate of 4-star and 3-star hotels were at 66.70% and 70% respectively during the 2H 2012 which dropped slightly from the 66.98% for the 4-starbut increased from 67.84% that was recorded for 3-star segments during first half of 2012. However, the occupancy for both 4- star and 3-star marginally dropped from 71.8% that was recorded for both segments during the 2H 2011.

Average Room Rate

Source: Zerin Property Research The average room rate (ARR) for 5-star hotels in Klang Valley was at RM346 in 2H 2012 which is slightly higher than RM344 that was recorded in first half of 2012 and 2H 2011.

Meanwhile, the ARR during 2H 2012 for 4-star was at RM237 increased from RM224 in 1H 2012 and RM226 in 2H 2011. The ARR for 3-star hotels was at RM160, increased from RM153 that was recorded during the1H 2012 and RM150 2H 2011.

Overall, the performance of the 3-5 star hotels in Kuala Lumpur during 2H 2012 improved compared to first half of 2012. However, the performance in terms of occupancy rate declined slightly for 3-star and 4-starsegments when compared with the corresponding period last year. This is largely due to the entry of large supply of hotel rooms during the review period whereby it is common for the industry to take some time before the new supply is fully absorbed.

Serviced Apartment - Kuala Lumpur

At present, there are 29 service apartment properties with a total of 5,268 units in Kuala Lumpur with the completion of two new service apartments during their view period namely the 42-suites Grand Hyatt Kuala Lumpur and 200-units E&O Residences Kuala Lumpur which is a part of the St Mary Place development as well as the completion of the expansion work by Fraser Place Kuala Lumpur to include an additional 106 apartment units by converting the vacant office levels from level 4 to 16of the adjacent block.

There are a number of new serviced apartments that are scheduled to come on stream in Klang Valley which include

Year Serviced Apartments 2013 Lanson Place Bukit Ceylon 2013 Ascott Group namely Ascott Serviced Residences at KL Sentral 2014 Citadines D’Pulze Cyberjaya 2016 Somerset Damansara Uptown Petaling Jaya

Occupancy Rate & Average Room Rate

Occupancy for budget hotels in Kuala Lumpur during 2H 2012 improved from 59% that was recorded in 1H2012 but declined slightly from 65% in 2H 2011 to62%. Meanwhile the Average Room Rate (ARR) for budget hotels revolved around the range of RM100during the second half of both 2012 and 2011 as well as in first half of 2012.

Occupancy for service apartments in Kuala Lumpur during 2H 2012 was 73%, increased from 70% in first half of 2012 and 72% that was recorded during second half of last year. Meanwhile, the average room rate (ARR) for service apartments was recorded at RM287 during 2H 2012increased from RM280 in 1H 2012 and RM282 that was recorded during the similar period last year.

As at December 2012, a renowned serviced apartment brand in KL City recorded an ARR of RM497 while the ARR for a serviced apartment in Mid Valley stood at RM469.

Future Serviced Apartment Supply in Kuala Lumpur.

The serviced apartment market sector is a considerably new concept of residential cum commercial hotel development. The establishment of the UBN Park along Jalan Sultan Ismail, Kuala Lumpur in 1988 is the first serviced apartment in Malaysia.

There are approximately 2,400 units of serviced apartments in the market, with Prince Hotel & Residences providing the latest supply of 150 serviced suites. Out of this 2,400 units, approximately 70% are located within the city whilst only 30% are located in the suburbs and outside the city limits.

At present, the 4 and 5 star serviced apartments in the Klang Valley total up to about 1,104 of the total amount or 48% of the total supply, evenly distributed within Kuala Lumpur City and the Suburbs.

The future supply of serviced apartment in the Klang Valley is astounding with an additional 3,300 units coming into the market by end 2004. The future supply in the Kuala Lumpur City is estimated at 1,640 units, similar to the amount of 1,660 units outside the City limits. The 4 and 5 star units total up to 24% or 790 units. Out of this, only 236 units or 7.15% will be outside Kuala Lumpur city namely Dorchester Place in Sri Hartamas and California Serviced Suites along Jalan Ampang (after the Jalan Tun Razak interchange.)

A chart depicting the Existing, Future and Cumulative Supply of 4 & 5 Star Serviced Apartments is as appended as above.

Demand

Most of these foreigners are from UK, Australia, USA and Japan and are primarily involved in the oil and gas industry, information technology and infrastructure projects. The tourist based clientele are mainly from the Singapore and Arab Markets.

This indicates that the survival of serviced apartments is highly dependent on the corporate markets and expatriate communities who are on contractual employment terms in Malaysia.

The overall occupancy rate of service apartments for the year 2001 in the Klang Valley was 68.55% out of which the occupancy for Serviced Apartments within the City Limits were 67.5% and at the suburbs recording a higher 70.55%. As of the 2nd quarter of 2002, the year to date average occupancy rare for Klang Valley was marginally higher at 68.8%, mainly contributed by the Singaporean and Middle Eastern Market, skewing the present city based serviced apartments occupancy slightly higher than those outside the city.

Market Prospects

Despite the impending supply of new hotel and serviced apartment rooms in the market, the serviced apartment market is still a niche market to be reckoned and the potential for growth is very healthy for the future short and medium term.

The niche market forms only a relatively small component targeting at long staying business travellers. This foreign group is projected to grow rapidly with the growing economy in view of the following foreseeable circumstances:

The stronger promotion of the Multimedia Super Corridor will see an influx of foreign experts and foreign investors. This is expected to increase the business activities especially in the preferred Klang Valley location

The liberalisation of the financial and services sectors coupled with stronger promotion of the Kuala Lumpur International Airport is expected to witness many long staying business travellers.

The ongoing and future government infrastructure and capital projects will see a continuing inflow of expatriates

The general residential markets lack quality and specialised accommodation for expatriates. Although one may argue that there is an abundance of condominium units, but the quality, finishing, furnishings, amenities and facilities provided are not up to the expectations. On the whole, the short to medium term future prospects for the 4 & 5 star serviced apartment market is seen as healthy in view of its relatively few quality projects coming on stream.

Based on the market data, it is evident that the 4 and 5 star serviced apartment market has not fully capitalised on in the prestigious locations in the suburbs like Ampang Hilir, Bangsar, Damansara Heights & Petaling Jaya. This is evident by the fact that only a few 4 & 5 star Serviced Apartments are located in these locations. This again gives a location and product niche to future serviced apartments

Successful Factors

End users, that is hotel guests, are becoming more sophisticated. In Kuala Lumpur, where majorities of the hotel guests are business travellers, there is a need to tailor products to meet the more discerning and specialised needs of long stay guests in order to achieve success. This includes business facilities and services, IT and multimedia facilities.

Other considerations for a successful product include:

 Market driven design which is efficient  Low Density  International accessibility  Highly service orientated which is personalised  High quality of facilities and services  Effective packaging and marketing  Easy access and egress  Technology orientation.  Personalised concierge services for the serviced apartments

The Products: Fraser Residence Kuala Lumpur for the e-Generation Traveller

There is plenty to see and do in Kuala Lumpur, one of the most visited cities in the world. With the many shopping malls around in the city, authentic local fare, and international conventions and events, the culturally diversified city is well loved by many from around the world who visit for various reasons.

Attraction

Culture and Heritage

 National History Museum  Located on the fringe of the KL Lake Gardens, the museum of four chambers is a repository of Malaysia’s rich history and heritage.  Distance from Hotel: 2 km27 mins27 mins11 mins  Chinatown, Petaling Street  Be it for the best street foods and local delicacies or for bargains from clothes to souvenirs to electronic items, the street that never sleeps promises endless hustling and bustling throughout the day.  Distance from Hotel: 2.1 km29 mins29 mins10 mins  Masjid India  The sounds of bangles and trinkets, scents of sandalwood and cumin, aroma of chapatti and prata and colorful saris all act to tease your senses with everything Indian in this Little India of KL city.  Distance from Hotel: 1.5 km20 mins20 mins7 mins  Menara Kuala Lumpur Tower  Standing atop Bukit Nanas (Pineapple Hill) at 421 meters and 94 meters above sea level, the tower offers a bird’s eye view of the city from what appears to be a position taller than the Petronas Towers.  Distance from Hotel:1.8 km25 mins25 mins8 mins

Night Life

Beach Club

 Experience the vibrancy of the city’s night life in this sensational club located in the heart of the KL city. Distance from Hotel: 700 m11 mins11 mins5 mins

 Hard Rock Café KL The place for food and merchandise unique of the American culture. Distance from Hotel: 350 m5 mins5 mins7 mins

 Zouk Out A place to see and be seen, Zouk Out brings the international experience of clubbing into the city. Distance from Hotel: 500 m7 mins7 mins2 min

Nature and Wildlife

National Planetarium

 Designed to take after a mosque with a blue dome, the planetarium houses a mock-up of the International Space Station and the display of the space suit worn by the first Malaysian astronaut, amongst others. Distance from Hotel: 3.4 km46 mins46 mins13 min

Shopping

 Quill City Mall One of the newest shopping malls in town. The 8 story mall next to the Medan Tunku monorail station houses more than 320 trendy lifestyle shops with a mix of shopping, dining and entertainment. Distance from Hotel: 650 m10 mins10 mins7 mins

 Avenue K With 150 retailers, 5 bars, gym, bowling alley, food atrium, nursery and many exclusive labels, the latest city addition, easily accessible via the LRT station, is every shopper’s haven. Distance from Hotel: 1.1 km16 mins16 mins4 mins

Pavilion For those interested in the high-end fashion, home furnishings, entertainment and culinary delights, indulge in this mall located in the trendy Bukit Bintang district. Distance from Hotel: 1.9 km27 mins27 mins15 mins

Lot 10 Equivalent to the Fifth Avenue or Knightsbridge of the world in the 1990s, Lot 10 is an exclusive shopping complex where you will find many up-market labels. Distance from Hotel: 1.7 km25 mins25 mins18 mins

Sungei Wang Plaza Located within the Golden Triangle of the city, it is hard to miss this place for affordable local fare, great bargains and shopping deals! Distance from Hotel: 1.7 km25 mins25 mins18 mins

Fahrenheit 88 Of fashion and gadgets, Fahrenheit 88 is an ideal place to shop for the young and trendy urbanite. Distance from Hotel: 1.8 km26 mins26 mins17 mins

Suria KLCC Situated beneath the Petronas Towers, the shopping mall is one of the largest in Kuala Lumpur offering a shopping experience that integrates high-end luxury labels with affordable brands, fashion, entertainment and fine cuisine. Distance from Hotel: 1 km15 mins15 mins5 mins

Arts and Entertainment

National Art Gallery Embrace the local art scene as you uncover contemporary art pieces, cartoon drawings, ceramic, metal and wood sculptures in this simple yet richly illustrated architecture. Distance from Hotel: 3.4 km46 mins52 mins19 mins

Petronas Twin Towers The twin skyscrapers in Kuala Lumpur which used to be the world’s tallest for 6 years until 2004, are home to Malaysia’s notable Petronas group and many world’s renowned MNCs. Distance from Hotel: 1 km14 mins14 mins7 mins

Facilities, Amenities and Services within the vicinity:

 Supermarkets (Isetan and Cold Storage within Kuala Lumpur City Centre), 12-minute walking distance  Hard Rock Café, 10-minute walking distance  Quill City Mall (Aeon supermarket), 10-minute walking distance

Nearest Transportation

 Nearest subway station  KL Monorail Bukit Nanas Station, 5-minute walking distance  Kelana Jaya Line - Dang Wangi, 5-minutes walking distance  Nearest train station  KL Central, 20-minute drive time

Getting to Fraser Residences Kuala Lumpur

 From Kuala Lumpur International Airport  By KLIA Express to KL Central, approximately 28 minutes; then from KL Central to Fraser Residence KL by taxi, approximately 20 minutes, about RM20; or  By taxi, approximately 1.5 hours, about RM150 per trip.

Hotel Room Composition

Studio Apartments Our studio apartments are well-appointed and designed for comfort and practicality. Each enjoys a comfortable living area in the room and a work area as well as an ensuite bathroom. Studio Executive  Floor area: 58 sqm (624 sq ft) Key features and services of studio apartments:  Complimentary high-speed internet access available in rooms and around the property  Fully-furnished serviced residence with integrated or separate living, dining, kitchen and bedroom areas  Modern and well-equipped kitchen  Washer/dryer  Comprehensive home entertainment system  Daily housekeeping services  Laundry services*  Room service*

One Bedroom Apartment

One Bedroom Apartments The one bedroom apartments are designed to suit the needs of business travellers with small family units. Each enjoys fully-furnished separate living, dining, bedroom and study areas. One Bedroom Deluxe  Floor area: 88 sqm (947 sq ft) One Bedroom Executive  Floor area: 105 sqm (1,130 sq ft) One Bedroom Premier  Floor area: 116 sqm (1,248 sq ft)

Two Bedroom Apartments These two bedroom apartments are ideal for guests who desire greater family space. Each enjoys fully-furnished separate living, dining, bedroom and study areas.  Two Bedroom Deluxe Floor area: 122 sqm (1,313 sq ft)  Two Bedroom Executive Floor area: 166 sqm (1,787 sq ft)  Two Bedroom Premier Floor area: 191 sqm (2,056 sq ft)

Penthouse Apartments  Towering at levels 37 and 38 with a spectacular, unobstructed view of the Kuala Lumpur city skyline, the duplex penthouse apartments are distinctly furnished and designed to bring you the ultimate in luxurious living. Available in three and four bedrooms, each enjoys a spacious layout and a fully-equipped kitchen.  Three Bedroom Deluxe Floor area: 825 sqm (8,880 sq ft)  Four Bedroom Executive Floor area: 944 sqm (10,161 sq ft) Hotel Amenities Room Amenities  Key Features & Services  Key features and services of  Comprehensive home entertainment penthouse apartments: system  Complimentary high-speed internet  Swimming pool access available in rooms and around  Children’s wading pool the property  Outdoor Jacuzzi  Fully-furnished serviced residence  Steam and sauna facilities with integrated or separate living,  Spa* dining, kitchen and bedroom areas  24/7 fully-equipped sky gym  Modern and well-equipped kitchen  Yoga Suite  Washer/dryer  The Retreat  Comprehensive home entertainment  Restaurant system  Pool side Terrace  Daily housekeeping services  Pool Bar  Laundry services*  Kids Play zone  Room service*  Billiard  Complimentary high-speed internet  Club Lounge & Bar access available in rooms and around the property  Meeting facilities*

 Business services*

 24/7 security and CCTV surveillance  24/7 reception and concierge services  Daily housekeeping services^  Laundry services*  Room service*  Scheduled shuttle service to key business and shopping districts  Car park

Business Complements & Meeting Facilities Located within the Kuala Lumpur business district and near Kuala Lumpur Convention Centre, Fraser Residence Kuala Lumpur offers the ideal venue for business meetings and gatherings. Our business facilities include: Function Rooms Pre-function area for guest reception Complimentary high speed high-speed internet access Business services* Catering services* Venue Area (sqm) Area (sq ft) Capacity (Banquet Style) Function Room 1 63 678 60 Function Room 2 63 678 60 Function Room 3 94 1,012 80 More meeting facilities and event spaces will be available in the near future.

World of Exclusivity

The welcoming warmth and comfort you’ve grown accustomed to at Frasers Hospitality serviced residences, is now accompanied with the wonderful rewards of Fraser World – a world unlike any other, yet familiar in a captivating way.

Fraser World is an exclusive guest recognition programme specially designed to complement your travel and living lifestyles with a host of exceptional member privileges as a gesture of our appreciation for your loyalty and support. Membership is complimentary and benefits abound.

From complimentary breakfasts to early check-ins and late check-outs, plus complimentary upgrades and complimentary stays at Frasers Hospitality serviced residences, you’ll enjoy all the exclusive privileges of Fraser World when you join us as a member at participating properties. Click here to discover the entire range of Fraser World benefits.

Become a member today and indulge in the privileges of Fraser World as you continue to enjoy the comforts of home at the Gold-Standard Frasers Hospitality residences, and the award- winning Fraser Difference: renowned personalised service and facilities to complement your every lifestyle need, which will further enhance your stay.

Membership Tiers Crystal Membership Presented upon successful membership application Sapphire Membership Awarded automatically at the 200th qualifying night, equivalent to 2,000 points Diamond Membership Awarded automatically at the 500th qualifying night, equivalent to 5,000 points

Membership at a Glance

Crystal Sapphire Diamond Exclusive Privileges Short Long Short Long Short Long

Complimentary ♦ ♦ ♦ ♦ Breakfast2

Complimentary ♦ ♦ ♦ ♦ ♦ ♦ Internet Access

Free local call (within ♦ ♦ ♦ ♦ ♦ ♦ the city)

Welcome Amenities ♦ ♦ ♦ ♦ ♦ ♦

Complimentary Local ♦ ♦ ♦ / English Newspaper

Complimentary 1-way 1-way airport transfer2

Complimentary dry cleaning / pressing of ♦ two suits per month (non-cumulative)

Discount off Best Available 5% 5% 10% 10% 15% 15% Rate3

In-house F&B 5% 5% 15% 15% 20% 20% discount2

Laundry discount 10% 10% 15% 15% 20% 20%

In-room check-in ♦ ♦ ♦ ♦ ♦ Complimentary upgrade to the ♦ next apartment category1

Early check-in1 11am 11am 8am 8am

Late check-out1 3pm 3pm 6pm 6pm

Short Stay: 1 - 29 nights Long Stay: 30 nights & above 1 Subject to availability 2 Available at selected serviced residences only 3 Applicable to bookings made with membership no. provided at the point of making the reservation

Market Segment

To win more repeat customers, hotels must create a tailored guest experience Whether its luxury, economy, or something in between largely determines what customers want most in a hotel stay. Though customers in all segments value price, reputation, room quality, and location when choosing a hotel, these basics merely cover the cost of entry in today's competitive hospitality industry, and they offer no guarantees for winning repeat business.

To achieve sustainable, long-term growth, hoteliers must develop a deep understanding of the type of customers they want to attract, then offer an experience that is tailored to that specific group. By becoming more attuned to the preferences of current and potential guests in their segment, hospitality companies can more accurately target and build meaningful, lasting relationships with them.

Engaged customers are less price-sensitive Every hotel should make engaging customers its primary goal, because fully engaged guests those who are emotionally attached to a brand provide a financial premium, regardless of market segment. Customers who are fully engaged are less sensitive to price because their emotional connection with the brand moderates their concerns about cost. Customers of higher-priced hotel chains tend to be more engaged than those of lower-priced brands. One-third of luxury guests are fully engaged the highest percentage for any segment and this segment is also the most lucrative. Luxury customers spent an average of $910 at the hotel they visited most frequently over the past 12 months. Economy guests are the least likely to be fully engaged (12%) and spent $176 on average at the hotel they visited most frequently in the past 12 months.

Appealing to new customers The journey toward creating a "customer for life" begins with a guest's first stay. Beyond the factors guests require from all hotels quality, convenience, price, and brand reputation hoteliers must carefully examine their target segment for cues on how to entice new customers. The research found that when luxury and upper upscale guests select a hotel for the first time, creating the right environment is vital to winning them over. These customers value the look and feel of the property, and they trust their own judgment and observations when choosing a hotel for the first time.

Encouraging repeat customers Price, location, and quality remain top considerations for all customer segments in repeat booking. However, a hotel's brand reputation becomes less crucial at this stage, as customers focus less on the hotel's image and more on their personal relationship with the brand. To encourage guests to return often, hotel staff must provide them with reliable service, solve their problems, and respond enthusiastically to their needs from the very first visit. When employees help guests solve problems, those customers can become more engaged than guests who didn't experience a problem during their stay.

For luxury guests, price is not a top factor in repeat booking. The look and feel of the hotel continues to be a crucial consideration, but responsive employees and their ability to solve problems become more important. Service reliability is important to upper upscale and upscale guests, while responsive employees appeal to upper midscale and midscale guests. Economy customers also value employees who are responsive and can solve problems, but they still put price first when rebooking, as do midscale customers. Even the most price-sensitive midscale and economy guests who are fully engaged spend more than their actively disengaged counterparts. The amenities that matter most Hotels can be prone to "gold plating," or adding services and products that increase cost but don't necessarily boost market share. To avoid this trap, hoteliers must understand which products and services are meaningful to the customers they want to attract so they can offer amenities that will entice customers without increasing price to a level that will drive guests away. Guests overall strongly agree that they would be willing to pay much more for significantly improved services such as Internet connectivity, comfortable beds, and responsive employees. Luxury guests strongly agree with keeping and improving comfortable beds, in-room dining, and responsive employees, while customers in all other segments strongly agree with keeping and improving Internet connectivity, comfortable beds, and responsive employees.

When asked which hotel products customers would give up to lower costs, more than half of guests strongly agree they could do without the in-room bar, robes, and valet parking. Customers across all segments strongly agree with eliminating the in-room bar, robes, guest room radios, and valet parking.

About half of guests overall strongly agree that they would be willing to pay more for significantly improved in-room television, bathroom soap, and complimentary Internet. Luxury customers strongly agree that they would pay more to improve bathroom soap products; upper upscale and upscale customers would improve free Internet and upper midscale, midscale, and economy customers would like a nicer television and would be willing to pay for one.

Creating customers for life Certain elements such as price and location are understandably important in bringing first-time customers through the door. If employees can create an emotional connection with guests during their initial stay, they'll be more likely to return the next time they need a hotel, even if another brand is offering a better price or a more desirable location.

The first visit is a crucial opportunity for hotel staff to create a customized, differentiated experience that will encourage guests to keep coming back. Winning repeat business comes down to understanding what is important to customers of your hotel and its market segment, offering products and services that matter most to guests, and ensuring that your staff members understand and can deliver on guests' preferences.

Hotel staff members who can handle problems with ease, provide reliable service, and be responsive to customers' needs represent an enormous competitive advantage.

E-Biz However, in the last 5 years, the corporate market do channelled their booking through hotel website http://klcc-kualalumpur.frasershospitality.com/ and with last minute offers by online travel Agent (OTA) i.e. Agoda.com, booking.com, hotel.com. This is due to the good rates available over the internet portals that’s provide the best guaranteed rates with instant confirmations and online payment.

Distribution Channel Channel Distribution Media Corporate Sector  Booking make direct to Hotel via Phone, fax or Email  Booking Via hotel sales department- Corporates rates e-Biz/Ecommerce Booking as follows:  Hotel web site  Online travel agent (OTA) eg. Agoda. Hotel.com. Booking.com  Online agencies : Expidia/ Travelocity  Online Opaque agency  Brick and mortar agency website  Destinations sites

Geographic Source of Original Hotels and resorts though complicated are very high cash-yielding investments that require specialized operation expertise. To help you make a sound hotel investment, we have outlined some basic criteria to ensure that the investment is a true winner.

Varied Market & Geographical Segments. Avoid hotels that depend on just one market segment (corporate, government or leisure). This provides relief from a downturn of either travel sectors. Likewise, ensure the hotel is not overly dependent on tourists from a single region as it runs a risk of low occupancy should any political problems arise.

Varied Source of Business. Ensure there is a varied source of dealers. i.e. from a variety of travel agents, internet engines and direct bookings. Just as above, you do not want to be overly dependent on one source.

Choice of Management Company. In many cases, the investor and the manager are two separate parties. You must fully understand the capability and reputation of the management company. The best way is to request for their portfolio of hotels and analyse the performance statistics i.e. revenue is maximized and expenses optimized.

Thorough Diligence. Caveat emptor and give yourself enough time to thoroughly "understand" the property. Conduct a thorough marketing, financial, legal and property audit that covers all licenses, approvals etc.

Market Positioning. Ensure the property is well positioned and attracts the correct market segment. You might not want your hotel perceived as a 'Meeting & Convention Hotel' when its capacity for such a market is limited or it’s purely leisure hotel. You would need to investigate the markets and the properties positioning/branding in the market.

Easy Exit Strategy. Of course as an investor, you must also think of the eventual sale of your property. To attract a variety of buyers, ensure the structure of the purchase entails an easy termination of the management contract./franchise agreement, funding prepayment or assignment and minimal tax exposure.

Other Issues. Other pertinent issues to look at include accounting systems, maintenance and energy management, food and beverage quality and concepts and reporting systems.

But what makes a hotel successful? End users, that is hotel guests, are becoming more sophisticated. In Kuala Lumpur, where majorities of the hotel guests are business travellers, there is a need to tailor products to meet the more discerning and specialised needs of business travellers in order to achieve success. This includes business facilities and services, IT and multimedia facilities.

Other considerations for a successful product include:

 Market driven design which is attractive and efficient  International accessibility  Highly service orientated which is personalised  High quality of facilities and services  Effective packaging and marketing  Easy access and egress  Technology orientation.

Though there are over 25,000 hotel rooms in Kuala Lumpur and 2,400 serviced apartments, at the moment, occupancies have been steadily picking up since the September 11th incident, SARs, Iraq War etc. Room rates have also remained stable last year with some hotels and serviced apartments recording increments. Anticipated yields for hotels and serviced apartments range from 6.5% to 11%, depending on category and locations.

Our hot picks are hotels, resorts and serviced apartments with the following traits:

1. Within or around KLCC, top resort destinations that are accessible (Penang, Langkawi, Kota Kinabalu, Kuching, Kuantan) and even suburbs of Kuala Lumpur for Serviced Apartments. 2. Functional Room Designs and General Layouts 3. High End and Medium End Categories (low end category provide cash flows but low yields for the same management costs)to cater for international and domestic tourism 4. Potential to offer products to the more discerning consumers

A word of caution though, hotels and serviced apartments would initially require some capital injection, but with the right management, these efforts are really lucrative.

Supply-Hotels At present, there is a total of approximately 25,000 hotel room’s supply in Kuala Lumpur. In the 4 and 5 star range within Kuala Lumpur city centre, the total number of rooms are approximately 8,300 units or 33.23% of the total amount.

The future supply of 4 and 5 star hotel rooms in Klang Valley by end 1999 amounts to an additional 8,244 units out of which 6,278 or 76.15% will be in Kuala Lumpur city and the balance 1,966 or 23.85% outside Kuala Lumpur. By this time the total 4 and 5 star rooms will account to 59.61% of the total rooms in the Klang Valley.

Future Supply of 4 - 5 Star Hotel Outside KL

Market Prospects

The current hotel industry is still too focus on providing rooms to meet the future demand. There is an acute lack of convention, seminar, exhibition and meeting room facilities within current hotel establishments and so are those that are currently under construction or being planned. Competition from neighbouring countries like Singapore and Thailand are gaining popularity in respect of accommodating and organising international events within hotel establishments. With the nations numerous promotions programs to promote Malaysia as an alternative international venue for tourism and business activities, it further supports the need for the hotel industry to cater for the specific needs for the international market.

The near completion of the Kuala Lumpur International Airport in Sepang, the promotion of the Multimedia Super Corridor and the coming Commonwealth Games in 1998 will make Malaysia more accessible and exposed to the global market. This is an opportunity that will create large potential for growth in visitor arrivals and the spin offs that could be created.

End users, that is, hotel guest are also becoming more sophisticated consumers. In Kuala Lumpur City, where the majority of the hotel guests are business travelers, hotel operators must increasingly need to tailor their products to meet more discerning and specialised needs in order to achieve success.

Considering the enormous supply of rooms coming into the market and the slowing down of the regional economy, the future for the Kuala Lumpur market in 1998 and beyond looks pale. This outlook is shared by the existing and future hotel operators and owners.

Serviced Apartment Sector

Supply

To date, there are approximately 1,542 units of serviced apartments in the market with over 3000 units currently under construction that will enter the market by the year 2000. MiCasa Hotel Apartments, Pacific Regency Suites and Duta Vista Executives are among the leading serviced apartments in the Klang Valley.

At present, the 4 and 5 star serviced apartments in the Klang Valley total up to about 552 units or 35.79% of the total amount. This is shown in Table 2 below.

Supply of Serviced Apartment in Kuala Lumpur No. of Rooms Pacific Regency Suites 153 Crown Regency Apartments 90 Total Existing Unit of Serviced Apartments in KL No. of Rooms MiCasa Hotel Apartments 241 Duta Vista Ececutives 68

The future supply of serviced apartment in the Klang Valley is astounding with an additional 3,201 units coming into the market by end 1999. The 4 and 5 star units total up to 46.89% or 1,501 units. Out of this, only 241 units or 16.05% will be outside Kuala Lumpur city; all these units being within Lanson Place along Jalan Ampang/Persiaran Ampang Hilir. Table 10 below shows the list of the oncoming supply whilst Graph 5 shows the existing, future and cumulative supply of serviced apartments.

Supply of Serviced Apartment in Kuala Lumpur No. of Rooms Ascott Serviced Residences (1998) 223 The Maple Suite (1998) 92 Lot 181 Service Apartment (May 1999) 330 Guoman Serviced Apartment (1999) 288 Vision City Project (1999) 288 Capital Square (1999) 400 Future Supply of Serviced Apartment outside No. of Rooms KL Lanson Place, Ambasador Row (1998) 241 Total 241

Demand

The demand for serviced apartments in Kuala Lumpur is unlike the tourist-dependent hotel industry. The serviced apartment sub-sector caters for the economic-driven market niches. Ninety percent are foreigners who require accommodation for extended periods from three weeks to six months. Most of these foreigners are from UK, Australia, USA and Japan and are primarily involved in the oil and gas industry, information technology and infrastructure projects such as the LRT, KLIA and KLCC developments.

This indicates that the survival of serviced apartments is highly dependent on the expatriate communities who are on contractual employment terms in Malaysia.

The overall occupancy rate of service apartments for the year 1997 in the Klang Valley is 67.97% and this is depicted in Graph 6 below. Table 11 overleaf also depicts the monthly occupancy and average rate statistics for the year 1997. SWOT ANALYSIS OF THE FRASER PLACES SEEVICES APARTMENT SUITES KUALA LUMPUR

STRENGHTS WEAKNESSES Strategic location in the city centre Noise pollution being on the main street of Bukit Bintang Within the vicinity of 8 shopping complexes Next to BB Park and close to Bintang walk Room facing the road subject to noise pavilion and few more disturbance from surround traffic area Varieties of F&B outlets at our office block Not enough basement carpark when there is next doors more than one function held in the hotel Able to cater to convention market due to high room inventory Accessible to major places of interest for tourist Luscious garden and Pool side Gym facilities pool Spacious Lounge areas 18 lane bowling alley annex to building The only full facilities Apartment Services Suite Hotel in Jalan perak OPPORTUNITIES THREATS Close proximity to Prince Court Hospital NIL Services Popularity of KLCC Bukit Bintang and Low NIL Yat IT Center Accessible to major places via monorail NIL MTPB Continuous promotion of Shopping NIL paradise International Brands name NIL

Direct Competitor’s Services Apartment

Service Apartment Star Guestroom Locations Rating Ascort The Resident 5 Stars 221 Jalan Pinang The Prince Hotel & Residence Kuala 5 Star 445 Jalan Conlay, Lumpur INTERCONTINENTAL KUALA 5 Star 473 LUMPUR

Ascort The Resident

With exquisite detailing from stylish and elegant decor, wall to wall carpeting and marble flooring, each of the 221 spacious and elegant apartments come fully-furnished with a home entertainment system, fully-equipped kitchen and broadband Internet access. With a choice of studio, one-, two-, or three-bedroom layouts, you can choose an apartment that suits your individual needs while on business or holiday in this exciting city.

These luxurious and prestigious serviced accommodations cater to the discerning executives and expatriates. Ascott Kuala Lumpur boasts of spacious and elegant apartments, personalised services and extensive business and recreational facilities. Ideal for overseas assignments, leisure vacation and relocation, the residence offers an exclusive city retreat while being just across the street from the famous Petronas Twin Towers, KLCC Putra Line (Light Rail Transit), KLCC Park and a wide variety of dining and entertainment options.

In our opinion, the standard of upkeep and maintenance of the service apartment is consider Poor. The Hotel group also manage a 5-star Ascott Kuala Lumpur (Newly Renovated!), Ascott Sentral Kuala Lumpur & Somerset Ampang Kuala Lumpur

The Prince Hotel & Residence Kuala Lumpur

Is more than just a 5-star hotel - it awaits to accommodate you or your colleagues in Kuala Lumpur – dedicated to offering you world-class service in an elegant, business-minded ambience.

Prince Hotel & Residence Kuala Lumpur promises an atmosphere of sheer elegance and convenience for your business trip, featuring 445 rooms and suites, as well as 157 fully serviced apartments. Our 5-star rated hotel boasts sensational views of the Petronas Twin Towers; your first glimpse of the illuminated towers climbing towards the sky sends a jolt running through your veins and is a visible reminder of Kuala Lumpur’s energy.

At Prince Hotel & Residence Kuala Lumpur, our extensive 5-star guest facilities include an outdoor swimming pool, tropical garden, fitness centre, spa, children’s play area, and an exquisite line-up of international cuisines. By upgrading your room to our Premier Executive INTERCONTINENTAL KUALA LUMPUR

Located in the heart of the city, we offer discerning business and leisure travelers the option of preferential accommodation with our spacious, luxurious and stylishly designed 473 guest rooms, including 110 newly renovated Grand Premier Rooms that feature modern, earth tone furnishings and the latest electronic enhancements.

InterContinental Kuala Lumpur, located in the heart of Kuala Lumpur city’s prominent KLCC address, is an ideal destination for business and leisure travelers. The international hotel presents a finely tuned blend of elegant hospitality and deep connections in a dynamic city by offering guests “In the Know”; unique, authentic and local cultural insights resulting in enriching and memorable experiences for guests. Ideally located within lifestyle and entertainment hub of the Kuala Lumpur city, InterContinental Kuala Lumpur is just a short stroll to the iconic Twin Towers, Kuala Lumpur Convention Centre (KLCC), the scenic KLCC park, Suria KLCC Mall, Aquaria KLCC, Petrosains Centre and Avenue K.

The excitement continues onto the shopping district on Jalan Bukit Bintang with Pavilion KL, Fahrenheit 88 and entertainment streets on Jalan P. Ramlee. Get acquainted with the Malaysian cultural heritage at the Craft Cultural Complex on Jalan Conlay and KL City Gallery at Merdeka Square.

COMPETITOR SWOT ANALYSIS

Ascort The Resident Strengths Good location - Petronas Twin Towers, KLCC Putra Line With exquisite detailing from stylish and elegant decor With each of the 221 spacious and elegant apartments come fully-furnished with a home entertainment system, With a choice of studio, one-, two-, or three- bedroom layouts, Weakness Limited with affordable Food and beverage outlets No of room is quite limited Threat Hotel in the middle of the bad traffic area The Prince Hotel & Residence Kuala Lumpur Strengths views of the Petronas Twin Towers Prince Hotel & Residence Kuala Lumpur is entrancingly located in the heart of Kuala Lumpur, featuring 445 rooms and suites, as well as 157 fully serviced apartments Weakness Limited Carpark-Especially during special event and occasions Cannot compete on the convention market due to limited function room no indoor swimming pool Strengths Located only minutes away from the upmarket malls of the Golden Triangle offers a range of layouts, from exquisitely designed 2 + 1 bedrooms, 2 bedrooms, to 1 bedroom apartments Threat Located in City Centre and heavy traffic

INTERCONTINENTAL KUALA LUMPUR Strengths With our spacious, luxurious and stylishly designed 473 guest rooms, including 110 newly renovated Grand Premier Rooms that feature modern, earth tone furnishings and the latest electronic enhancements. located in the heart of Kuala Lumpur city’s prominent KLCC The international hotel presents a finely tuned blend of elegant hospitality

Breakdown of Gross Rental Income by Hotels, Serviced Residences and the Initial Portfolio

Operational Data of the Serviced Residences

Unaudited Pro Forma Statements of Total Return for FH-REIT

Unaudited Pro Forma Balance Sheets of FH-REIT

FH-REIT Forecast and Projected Statements of Total Return

Gross Revenue and Net Property Income Contribution of Individual Property

Gross Revenue of Geographical segments

Revenue Mix of the Properties

Hotels

The following table sets out the composition of the Gross Operating Revenue of the Hotels during FY2011, FY2012, FY2013, Q1 FY2013 and Q1 FY2014:

The major contributors to the Gross Operating Revenue of the Hotels are room and F&B revenue. F&B Revenue comprises revenue from the restaurants, lounges and bars, including revenue from catering services, banqueting sales, room service and room mini-bar sales, wedding dinners, corporate meetings and other corporate events. Other income includes income from provision of telecommunication services, internet broadband services, laundry services, operation of car parks, spa and health clubs and the usage of business centres.

Serviced Residences

The following table sets out the composition of the Gross Operating Revenue of the Serviced Residences during FY2011, FY2012, FY2013, Q1 FY2013 and Q1 FY2014:

Rental revenue generally contributes around 95% of the Serviced Residences’ Gross Operating Revenue. Other income refers mainly to income from the provision of F&B services, usage of the business centres and laundry services, income from the provision of telecommunication services, internet broadband services, the operation of the car park, rental income from concessionaires (where applicable) and hiring of furniture and equipment by guests in addition to standard provisions.

Competitive Advantage

World Travel Awads Frasers Hospitality Share This

The strategic location of our properties is one of the key reasons why our customers have come to us. Our global residence network includes the world’s most prominent gateway cities where things happen thick and fast on a daily basis. Within these cities, our properties are often sited in central business districts, commercial districts, prime locations, business parks and tech-parks, with proximity to essential amenities, facilities and entertainment.

Our Vision and Core Values lay the foundation for management excellence and service standards. Each of our management members, co-workers, customers and business partners plays a pivotal role in ensuring that we deliver our Vision and live up to our Core Values. Any missing link in the service chain will result in a quality breakage and hinder our progress. We are proud that our service chain has been tested and proven over the past years and this is evident in our string of awards and accolades including those conferred by the highly coveted Travel Trade Gazaette (TTG), World Travel Awards (WTA) and Expatriate Management & Mobility Awards (EMMA).

Operational Support

At Frasers, our strategic framework is operationally supported by an infrastructure of people, processes and controls, and these cover financial monitoring, customer service, efficient business processes and innovative solutions. Various functional units take responsibility for their respective action plans which are to be devised in line with our corporate goals. We measure our performance with multiple yardsticks according to industry standards, including financial performance, brand equity, customer satisfaction levels and performance indicators. Short term goals are set for operational efficiency keeping in view long terms goals for overall business viability.

Our employees are groomed under a world-class human resource programme backed by systems that are designed to attract, retain and develop the most qualified individuals. Our training programmes encompass the development of both the soft and hard skills supported by positive and constructive individual coaching, and a monitoring framework that comprises comprehensive policies and procedures to foster a learning environment.

Sales and Marketing

We constantly seek to cultivate new revenue streams. By leveraging on both traditional and the new media, we are associated with nearly 1,000 online travel agents and 500,000 relocation agents around the world, to generate local and regional bookings and cross-sell accommodation packages.

Thanks to the awards and accolades, we have enjoyed a considerable amount of brand awareness and publicity through advertisements; Public Relations editorial features, endorsements by bloggers, positive online reviews and endorsements.

Centralized Booking Reservation Systems

By connecting with reputable online booking systems, global customer contact centres, worldwide online travel agencie, and our own corporate and brand sites, we provide avenues for driving business to our properties.

Revenue Management

Our regional Revenue Management team utilizes the latest technology for pricing and inventory management, so that we are able to offer at our rooms with the best online rate gaurantee without comprising our profitability.

Brand Management

At Frasers, we guard our brand and corporate identity fervently. A winner of the Asia’s Most Promising Brand 2012-2013, amongst other in-country distinctive brand awards, the Frasers brand represents who we are and what we stand for. It is an embodiment of our corporate Vision and Core Values, and even more so, a symbol of luxury serviced residences with a quality mark. The corporate identity ensures that we are consistently identifiable by our customers in all touchpoints. The Frasers Brand is the central guiding principle within our organisation, in all that we do and why we choose to do the way we want it.

The Frasers brand message is consistently communicated in all our advertisements, promotional materials, direct mails, press/public relations, sponsorship programmes, strategic alliances, Internet and social media in a bid to constantly build up the brand equity and raise the mark in the long term.

Fraser World Loyalty Programme

A returning customer is the most effective testimonial to our service. Designed to complement our acquisition drives, the Fraser World is a loyalty programme that aims at customer retention. Instead of incurring acquisition cost, we transfer that to the customer in the form of savings, and when they extend their stay, our average revenue per guest increases. This is a win-win relationship for us and our customers.

Customer Relationship Initiatives

Our customers’ needs are ever-changing in this dynamic world. We constantly keep ourselves abreast of the latest social trends, emerging attitudes, spending habits, and evolving customers’ tastes. By being proactive, we hope to stay ahead of our customers.

Technical Services

Frasers serviced apartments are known not just for its aesthetic and residence features. The Singapore Green Hotel Award 2013 is testament to our technical expertise in the conversion, adaptable reuse, mixed-use and greenfield new builds. This international technical know-how and our skillsets and experience with asset management are particularly valuable to partners looking to create enduring value to their assets.

Conversions

Our technical services team will help to transform your existing building property – be it office, hotel, condominium, heritage building for example – into a distinctive serviced residence.

Greenfield

Let us work with you to create your very own property built to international specifications, incorporating new market innovations that enhance operational efficiency, and top it off with the iconic Frasers Brand – one that stands for luxury premier serviced residences.

Mixed-use

From shopping malls, office buildings, hotels and condominiums, we have extensive experience in integrating the Frasers properties with mixed-use developments.

Asset Enhancement Your property has more potential than it is today. Let us help you unlock that potential and maximize your property yields by optimizing property life cycles, driving performance and improving operational efficiency.

Our People

Our exemplary service standards are marked by a set of rigourous measures put in place to maintain the hardware, software and heart-ware of our residences. The Frasers Difference is all but how we relentlessly seek to uphold the standards of our apartments and all its tangible features, improve our processes and workflows, and deliver our service with intuition towards building a heart-warming relationship with all our guests who come home to us everyday.

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