31 July 2012

Malaysia’s Desaru Coast: Re-establishing Desaru as an international tourism destination? | The Development Advisor

Malaysia’s Desaru Coast: Re-establishing Desaru as an international tourism destination? | The Development Advisor

Recent History

During the 1980′s Desaru was a very popular beach destination with about half a dozen hotels. Events since then have not been kind to Desaru. Relatively cheaper airfares and more attractive Asian regional beach destinations lured travelers away from Desaru. The deteriorating numbers of visitors led accommodation standards into a downward spiral. Without further coherent tourism development planning each negative circumstance re-enforced the other.

Iskandar Malaysia & Malaysian Tourism Development

On a positive note the fortunes of Desaru seems to be changing under the umbrella of Iskandar Malaysia as well as the Tourism NKEA’s of the PEMANDU’s Malaysia Economic Transformation Program.
‘Desaru Coast’ appears to be the new branding for the new developments in Desaru.  This re-vamp is also partly a recreational outlet for the people working  in the new Refinery and Petrochemical Integrated Complex (RAPID) in nearby Penggarang once completed in 2016.
The new Senai-Desaru Expressway also improves accessibility from others parts of Johor as well as for visitors coming from Singapore.  Even existing properties like the 190-key Pulai Desaru Beach Resort has been recently updated to take advantage of the renewed interest in the location.

Desaru Coast

Khazanah Nasional Bhd through Desaru Development Corp Sdn Bhd and Desaru Development Holdings One Sdn Bhd are spear heading the development ofDesaru Coast with substantial investments in hotels, golf courses and themed attractions.  In total it encompasses around 1,000 new hotel rooms over 1,700 hectares. This is over and above the existing 1,250 rooms which have been in existence since the 1980′s.
New projects announced for Desaru Coast:
  • Sheraton Desaru (357 rooms)
  • Aman Country Club and Villas (50 rooms + 50 villas)
  • The Plantation Hotel (400 rooms)
  • Datai Desaru Resort (60 suites 40 pool villas)
  • Ernie Els Residences (information not available)
  • Vijay Singh Residences (information not available)
  • Convention Centre
  • Riverwalk Retail
  • Marine Park / Water Park / Wildlife Park
  • Ernie Els 27 hole golf course
  • Vijay Singh 18 hole golf course
Existing hotels in Desaru:
  • Pulai Desaru Beach Resort & Spa (193 rooms)
  • Lotus Desaru Beach Resort (700 rooms)
  • Desaru Damai Beach Resort (134 rooms)
  • Desaru Golden Beach Resort (220 rooms)

Key Question

While the re-development of Desaru is highly praised and total room count can yield about 600,000 visitors annually a key question remains: Does the new Desaru Coast capture the full tourism development potential of the area?
Let’s examine the SWOT to understand some of the broader dynamics inherent in Desaru.
Strength
  • Beautiful natural coastline.
  • Abundant undeveloped land.
  • Good infrastructure already existing in the area.
  • Set within the larger Iskandar Malaysia development zone.
  • Desaru Coast is backed by sovereign wealth fund Khazanah.
  • Next to and easy accessibility from Singapore.
  • Easier accessibility with the new Senai-Desaru Expressway.
  • Warm relations between Singapore and Malaysia reflected in the Joint Ministerial Committee for Iskandar Malaysia, and the
  • Khazanah Nasional and Temasek Holdings joint development through M+S Pte Ltd and Pulau Indah Ventures Sdn Bhd.
  • Rapid Transit Link between Singapore and Johor Bahru that’s slated to commence operations by 2018.
  • Excellent investment location for coastal resort homes due to proximity to a financial hub, clarity on land laws and land titles, favorable foreign property ownership and property financing regulations (compared against other regional countries) as well as MM2H incentives.
Weakness
  • Currently requires private transport to get there.
  • A lack of a property ‘maintenance’ culture in the country as a whole. See here.
  • Lacks the charm of Thailand or an exotic visual culture like in Bali.
  • An unsafe image due to life lost to drowning as well as concerns about generalpublic safety and security in the state of Johor.
Opportunities
  • Greater international tourism accessibility being located next to Singapore and in particular across from the airport at Changi.
  • A possible Third (3rd) Bridge Link between Malaysia and Singapore can potentially form an excellent basis for Desaru becoming a major international tourism destination.
  • Excellent location for coastal homes along the lines of a New York City – Long Island model (just as Iskandar Malaysia – Singapore are touted as a Shenzhen – Hongkong model for industry). This resort / tourism / residential strip could potentially stretch all the way to Teluk Mahkota.
  • With proper planning and execution this can be an opportunity to target higher yield visitors as envisioned in the ETP Tourism Handbook.
  • Existing attributes can potentially turn Desaru into a modern and contemporary coastal destination that can rival existing regional competition in visitorship.
Threat
  • Competition from much more established regional coastal destinations.


Conclusion

It’s quite apparent that there are opportunities to be seized in the vision of a greater Desaru development. While the upcoming Desaru Coast project will be a much-needed catalyst to revive Desaru as a tourism destination its current scale is not sufficient to capture the full potential that the location offers.
For Desaru to be transformational to the Malaysian economy and tourism landscape, a larger scale tourism master plan needs to be developed and supported at the level of Iskandar Malaysia in order to make it work over the longer term. To be transformational it should complement and tap the potential of the Singapore economy just like it’s currently being done for other industries. At the same time leverage off Singapore’s global accessibility in order to capture a slice of the larger global tourism market. This would necessarily make Desaru an international destination in and of it self – a challenging and not straight forward task. But the payoff can be potentially significant. Indeed the good news is that much of the foundation and key ingredients are already in place. This begs the next question: Does Iskandar Malaysia view a greater Desaru tourism development area as sufficiently strategic and worthy of consideration?