G City Club Hotel Sdn Bhd, which manages a 180-room hotel under the trade name of GTower Hotel, is shutting down its hotel operations, after a decade in the business, due to a drop in occupancy rates.

G City Club Hotel said the decision to cease operations was a direct result of low occupancy suffered in the past few years from increased competition from new hotels and the proliferation of homestays in the Kuala Lumpur City Centre (KLCC) vicinity (photos, above).

“The hotel had been initially conceptualised and targeted at corporate travellers and the past few years have seen a sharp decrease in our corporate clientele, especially from the oil and gas industry,” it said in a statement yesterday.

It said prolonged roadworks and the Mass Rapid Transit works in the KLCC vicinity have also created accessibility problems in the Jalan Tun Razak area, resulting in much lower occupancy from leisure travellers.

G City Club Hotel said its adoption of an asset-light model with the hotel premises on a rental basis, unlike other hotels that are asset ownership model, also added to much higher fixed costs, particularly from rentals.

“With Covid-19 and the forecast of 18 months before normalisation of the global economy, and low travel confidence, the management reviewed its hotel operations and is making a difficult but needed decision to cease operations,” the hotel said.

It added that all 79 employees shall be given adequate notice in accordance with their Employment Contract terms and would be paid their wages as well as employment termination benefits in accordance with the Employment Act.

- Bernama