Once top resort destination, now forgotten by foreign hotel investors.

I was reading The Star, the Malaysian tabloid newspaper, on a flight from Kota Kinabalu to Singapore last weekend when my eye caught the headline, "Make the Pearl of the Orient shine again".

Reading the first line in the article written by Wong Chun Wai, "Every time I return to Penang to visit my parents and friends, my heart aches", I thought, hey, this is exactly how I feel.

My heart too aches everytime I return home to Penang and I too had just written an article about the decline of Penang's tourism fortunes as a guest columnist in The Sun, another Malaysian daily newspaper, about two weeks ago.

Reading on, I found out that Wong had quoted from my article.

In my column for The Sun, I wrote, "It's one of those insidious things that creep up on you and even before you know it, it's happened and you don't even know when it took root.

"I am talking about the disappearance of Penang from the radar screen of the international hospitality and tourism investment scene."

You see, attending the recent Hotel Investment Conference Asia/Pacific (HICAP) in Hong Kong, it suddenly dawned on me that Penang no longer figure in anyone's discussions, whether in the conference sessions or during coffee breaks.

I can't pinpoint when it actually happened – when interest in Penang died – but I recall years ago when Penang would be ranked up there with Bali and Phuket when investors talked about market performances and investment prospects in the three destinations.

Today, Bali and Phuket are still talked about. Indeed, both continue to be the hot spots for hospitality investments, with Phuket remaining the darling of foreign funds, despite the simmering political tension in the south of Thailand.

But Penang? Not a pip squeak.

The only hotel activity Penang has seen in the past year has been the rebranding of Mutiara to an InterContinental and the closure of the 31-year-old Shangri-La's Rasa Sayang Resort for a RM70 million redevelopment.

Considered Penang's premier resort, Rasa Sayang, which has hosted about 1,357,800 guests since November 9, 1973 (not including those who frequent its restaurants and other facilities), will close this December 1 and re-open sometime 2006. Its closure, which will take out 512 rooms from the island's room inventory, will certainly have an impact on tourist arrivals, given its almost 30-40 percent repeat guest ratio.

Companies like Horwath Asia/Pacific do not even bother to include Penang in their regional resort comparisons these days. Indeed, the last market study Horwath did for Penang was in 1996.

Several tourism task forces have come and gone. At the invitation of the state government, they have put together recommendations ad nauseum. Clean the water, improve the infrastructure, invest in tourism-related products and marketing, promote the culture and heritage, don't promote it as a beach resort …

In his article, Wong wrote, "It may hurt but the fact is that the state lost its competitive edge long ago. It's not news any more but what is sad is that there appears to be a state of denial and indifference on the part of the state leadership.

"The decay in Georgetown, especially the inner city, is sad. Just count the number of shops along Penang Road and Campbell Street, once bustling areas, that have been forced to close.

"The degradation of beach and environmental conditions at its numerous tourist spots such as Penang Hill, Botanical Garden and Ferringhi Beach has not helped either.

"I see little point in anyone, especially politicians or those in the tourism trade, pointing their fingers or being defensive because the damage has been done. It's better for the Penang leaders to put on their thinking caps and come out with an innovative and creative marketing approach to sell Penang as a popular destination."

Asked what it would take for Penang to get back on its feet, Robert Hecker, managing director of Horwath Asia/Pacific, says, "They would certainly need to restore the water and beach quality and generally re-invest in tourism-related projects and marketing. However, I think it may be too far gone for Penang to ever get back to the top but they could certainly halt the decline and perhaps build back a certain base of tourism that would at least keep them in the game."

Like Wong, I have a soft spot for Penang. Like Hecker, however, I am a realist and I think it will take more than creativity and innovation to pull the island up.

It will take real political will and leadership from the new man at the helm of Penang tourism, State Tourism Development Committee and Environment committee chairman Teng Chang Yeow.

He certainly has his work cut out for him.



The SHY Report
A regular column on news, trends and issues in the hospitality industry by one of Asia's most respected travel editors and commentators, Yeoh Siew Hoon.

Siew Hoon, who has covered the tourism industry in Asia/Pacific for the past 20 years, runs SHY Ventures Pte Ltd. Her company's mission is "Content, Communication, Connection". She is a writer, speaker, facilitator, trainer and events producer. She is also an author, having published "Around Asia In 1 Hr: Tales of Condoms, Chillies & Curries". Her motto is ‘free to do, and be'.
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