Shangri-La Hotels (Malaysia) Berhad has signed a new Hotel Management Agreement with Shangri-La Hotel Management (MY) Pte Ltd Hong Kong for the provision of hotel management, sales, marketing and reservation services to the Hotel
Under the new HMA, SLMY will provide hotel management, sales, marketing and reservation services to the Hotel for a term of 5 years from 1 January 2024 with an option for Shangri-La KL to renew for a further 5 years upon the same terms, and thereafter, an option for either party to renew for an additional 5 years upon terms to be mutually agreed.
Shangri-La Hotels said the transaction allows the Malaysian operations to fully leverage the strength of the “Shangri-La” brand and its extensive global sales and marketing network. It also enables the Hotel to continue to benefit from
Shangri-La’s strong management and marketing expertise and experience. The agreement with SLMY was entered into on arm’s length basis and on normal commercial terms which are fair and reasonable and in the interest of SHMB and its shareholders as a whole.
The percentages of the fees payable are generally consistent with market benchmark of management and marketing fees of other major hotel chains of comparable class and standing. Specifically:-
(i) the base management and marketing fees payable under the Transaction are each within the range of comparable major hotel chains in Malaysia for the respective fee component; and
(ii) the incentive management fee payable under the Transaction is lower than the range of comparable major hotel chains in Malaysia.
