LANGKAWI SUN PEEKS OUT FOR RIYAZ HOTELS AND RESORTS AFTER THE PANDEMIC STORM
Born and bred in Ipoh, Dato’ Sri Mohammed Shaheen Shah Mohd Sidek stepped out of Cesar Ritz College, Switzerland, in 1994 with a graduation scroll in hand and buckled into a high-flying career in the hotel business.
Shaheen started in New York, where he worked for Marriott International and pursued an MBA at Cornell University. After spending a few years in the US, he returned to Malaysia to join the Pan Pacific Hotels Group, which managed the Pan Pacific KLIA hotel (later rebranded as ‘Sama-Sama’) of the then-brand-new Kuala Lumpur International Airport (KLIA). This put him in roles instrumental in handling the opening of both the hotel and the retail side of KLIA in 1998 and the Sepang International Circuit that would host the Formula One races. He became a General Manager of Cyberview Resort and Spa – at the young age of 28.
In 2008, Shaheen took the plunge to open up his hospitality brand, RIYAZ Hotels and Resorts. It now runs multiple hotels, including Dash Resort Langkawi, Dash Box Hotel Cyberjaya, and Dash Hotel Seminyak Bali. The Ri-Yaz Group has also expanded to other sectors like food, higher learning, and design and architectural services.
Yet, Shaheen’s wealth of experience over 26 years did not prepare him for the coronavirus pandemic. The first nationwide lockdown in March 2020 came in like a wrecking ball for his hotel business – which had been enjoying 90% to 95% occupancy rates two months prior – and the ambitious growth the company forecasted for what was supposed to be the Visit Malaysia Year.
But Langkawi brings a bright spot of hope. According to Shaheen, among the hotels and resorts under RIYAZ, Dash Resort Langkawi is recovering the best “by far” from the pandemic slump. The seasoned hotelier tells Asia Connects about his eventful career, how his hotels weathered through the pandemic months, and what he had to sacrifice to uphold what he believed in.
AC: What made you decide to study hotel management in Switzerland?
Shaheen: Well, it was my mother’s idea. I’ve always wanted to be a lawyer, but my mum said that hotels would be a better bet for me because, as a kid, I just loved our hotel stays whenever we travelled as a family. I wasn’t interested in leaving the hotel for any sightseeing. I’d only want to wander around the premises to observe the employees and guests!
AC: That’s interesting. Usually, the stereotype for Asian parents is that they’d convince their son not to study hotel management and be a lawyer instead.
Shaheen: [Laughs] Maybe my mum knew that I wouldn’t make a good lawyer.
AC: This career path did lead you to be involved in historical events like the opening of KLIA, its hotel and the Sepang International Circuit. What was that like?
Shaheen: I had just moved from the huge city of New York back to Malaysia at the time to join the Pan Pacific Hotels Group, which was opening up KLIA, as well as the hotel adjacent to the airport. The night before the airport was supposed to start running, I looked out the hotel’s window and was struck by how empty Sepang was. There was no traffic. You could lay on the road and sleep there. And when I woke up the following day, the streets were suddenly so busy, with cars and massive trailers transporting equipment and so on. Within hours overnight, they had redirected the planes from the old Subang Airport to land at KLIA.
Of course, there were significant hiccups with the move. Many flights were delayed, and we were slammed – Pan Pacific KLIA was the only airport hotel for KLIA at the time, and people flocked in for meals and layovers. I was assigned to handle the opening of the hotel and the retail side of the airport, and the Sepang International Circuit. I worked in Marriott in New York where there were 2,500 rooms to manage. But even that could not compare to opening a major airport and hotel and a world-class international Formula One circuit – it was simply mind-blowing.
AC: What drove you to start your venture, RIYAZ Hotels and Resorts, in 2008?
Shaheen: When I was the General Manager (GM) at Cyberview Resort and Spa at 28, I was one of the first local GMs for a five-star hotel. At the time, there were not many locals who made it to that rank – most of them were expatriates. Unlike Singapore with its Banyan Tree Holdings and Thailand with its Anantara, I also noticed that Malaysia lacked a world-class hotel brand despite the large volume of tourists we attract for our hospitality. So, I wanted to build a hotel brand that is genuinely Malaysian, and I also wanted to give opportunities to local Malaysians to be GMs in five-star properties.
At first, our business model was to manage hospitality assets for clients. We had the opportunity to manage Cyberview Resort and Spa and later the Ri-Yaz Heritage Resort and Spa in Terengganu. In 2013, we brought Tan Sri Abdul Rashid Abdul Manaf, the founder and director of Eco World Development Group Bhd, onboard as the partner and chairman of RIYAZ. He told me, “Look, we need to own hotels first if we want to have more management contracts. That would give other hotel owners confidence in us to manage their assets.” So, we took out a loan of RM120 million from Exim Bank and bought a property in Seminyak, Bali – that was our first hotel under the Dash brand. The second one was Dash Box Hotel Cyberjaya, and the third was Dash Resort Langkawi.
AC: You had front-row seats to how the hospitality sector in Langkawi screeched to a halt during the lockdowns amidst the Covid-19 pandemic. What were the last two years like for Dash Resort Langkawi?
Shaheen: It was very challenging; we did not see it coming. When the lockdown was imposed in March 2020, our occupancy rate dropped from around 90% to zero. So, we had thousands of employees across Malaysia and Indonesia that suddenly had nothing to do. But we were adamant about keeping all our employees. Without guests, all we could do was clean and maintained the hotel – it ended up being so clean that you could sleep on the corridor floors. But it was better than closing the hotel temporarily because a property without human movement breaks down very quickly. So we needed money for payroll, utility bills, landscaping maintenance, etc.
We had two outstanding months in January and February before the lockdown, so that gave us enough cash reserves to operate without income for the next three months. When the pandemic and lockdowns stretched on, we had to impose pay cuts – first at the management level and later among the lower-ranking employees. We also sold off some shares from our Bali property and a piece of land near KLCC, where we had begun development for a 24-storey hotel, to generate more cash.
AC: You launched a five-star Ri-Yaz Lavanya Resort and Villas in Langkawi in June 2020, just three months into the pandemic. Was that a miscalculated step, or did you see opportunities?
Shaheen: Ri-Yaz Lavanya is a major development consisting of hotel apartments and villas. We decided to launch the villas, whereby each unit has its private pool, in 2020 because we noted that many people were hesitant to share pool facilities with strangers during the pandemic. The privacy was attractive; we saw about 50% occupancy rate during the months when cross-state travels were allowed, and hotels could operate.
AC: With the relaxed Covid-19 restrictions, how has the hospitality business bounced back in Langkawi?
Shaheen: Well, when state borders reopened in the last quarter of 2021, and the international travel bubble was implemented for Langkawi, we saw our best ever performance yet. Business went up 25% in that three months alone compared to the full year we operated in 2019 before the pandemic hit.
While Langkawi was a top destination for international tourists, for now, it is heavily reliant on local visitors. This makes it a weekend market more guests would check in over the weekend, and occupancy would drop during the weekdays unless there are school holidays. This is different from serving an international market. The inflow of tourists was more consistent throughout the year because you could have Middle Eastern visitors during certain months and Europeans coming to escape from their winters during other months.
However, the upside of local tourists is that they are keener on sightseeing, unlike international tourists who prefer to sunbathe on the beach. So, our sunset cruise package has been selling well among local guests.
AC: The last two years of the pandemic were filled with tough calls and sacrifices for entrepreneurs. What were some of the hardest decisions you had to make?
Shaheen: The most challenging decision was selling off our assets, like some shares from our Bali property – which we acquired through hard-earned money and built the brand from the ground-up – because we needed cash. But it was necessary. One thing I would not compromise was to put my employees out on the streets with no income. I would rather sacrifice the assets purchased to have some cash to ensure that my staff can keep their jobs.
I also wanted to keep the hotel fresh and maintained even during the months when there were no guests, which incurred utility bills, landscaping costs, and so on. It would have been easy to close the hotel temporarily to cut costs. Many hotels have done that. But the cost to restore the hotel later would be astronomical. By keeping the hotel clean and ready, we could also open and receive guests immediately when travel was allowed, unlike other hotels that may need some time to air out the rooms, rehire the staff and clean the premises.
Of course, there was the option of taking bank financing. But a huge reason why we survived the pandemic was that we were debt-free. When we opened Dash in Bali, we were lucky because Bali was booming, and we managed to pay off our bank loan within five years. We even had a surplus of cash, which we used to build our Cyberjaya and Langkawi properties. From then on, we ran on internal funds. If we had gone into the pandemic with bank debt, we would not have survived. So, I did not want to take up more liabilities even as the pandemic stretched because there was too much uncertainty.
If I could go back in time, would I have done things differently? No. As an entrepreneur, I am not emotional about my assets. I could buy another piece of land in the future. I could expand again.
