InterContinental Hotels Group's latest foray into Penang and Kuala Lumpur will set the stage for further expansion not only within Malaysia, but in the region.

The recent agreement inked on August 25 with Malaysia's Arena Target (formerly Pernas Hotel Chain) paves the way for IHG to rebrand the latter's two hotels, the Mutiara Beach Resort Penang and the Mutiara Kuala Lumpur into the InterContinental Resort Penang and the Crowne Plaza respectively.

The deal with Arena Target is a "coup" of sorts for IHG, allowing it to plant the first InterContinental in the country.
The group already manages five hotels in the country – Holiday Inn Penang and four hotels in Sarawak, namely Crowne Plaza Kuching, Holiday Inn Kuching and two Holiday Inns in Damai Beach.

Managing director Asia/Pacific, Patrick Imbardelli, said the time was right for IHG to plant its flag in Kuala Lumpur and Penang, two prime spots, as the hotel industry in Malaysia was at an all-time high and the future looked bright.
He said the right partner had also been found.

"Arena Target has the largest hotel property portfolio in Malaysia, with 10 hotels and resorts. Some of them are key premium hotel properties that have great potential. Both our organisations share a common goal, and that is to make the Crowne Plaza Kuala Lumpur and the InterContinental Resort Penang the preferred hotel choices for travellers in Kuala Lumpur and Penang.

"We will achieve this through a synergistic effort of combining Arena Target's strength in real estate development with IHG's global resources and vast experience in managing successful hotels."

Arena Target also calls IHG its "perfect" partner.

Group chief executive officer of Tradewinds, Arena Target's holding company, Mohd Redza Shah bin Abdul Wahid said, "We have been looking around for a global network. We chose IHG due to its good performance, its vast loyalty programme, its
service standards and its training programme."

Added Mohd Reza, "Two years ago the intention was to have a locally-owned hotel chain. But now there is a new market niche and there is a need for an upscale market brand to leverage on the existing brand. We will be able to do this with on InterContinental's global infrastructure, expertise, extensive network, and service quality and standards to add more value to our properties."

Said Imbardelli, "Malaysia has always been a key market for IHG and we have now found the best partner to grow our current distribution in the country from the current five hotels to seven, and maybe more in the years to come."

On whether Arena Target will hive off the other eight hotels under the Mutiara umbrella to IHG, Mohd Redza said, "It remains to be seen. We have to adapt to dynamic changes. If there is a change in the profile of guests' needs, then we will change accordingly."

Asked if the room rates of the two hotels would be raised with the rebranding, Imbardelli said, "It's not about raising prices but getting quality customers. We will build strategies so that the hotels could be sold better."

The Mutiara chain of hotels recorded an average occupancy rate of 61.2 per cent in the first seven months of the year with average room rate of RM185 (US$48.69).

Arena Target's chief executive officer, Amir Abdul Rahman, said this was the benchmark set for the IHG.

According to Imbardelli, the Crowne Plaza was one of the fastest growing hotel brands in Asia/Pacific. With the new Kuala Lumpur property, there are now 35 Crowne Plazas in the region in key cities that include Sydney, Beijing, Shanghai, Jakarta, Bangkok, Manila, New Delhi and Auckland.

"In the next few years we are expecting to add 20 more Crowne Plazas to the Asia/Pacific network."

He added that the group was also developing 10 more InterContinental hotels and resorts in Asia/Pacific.