Malaysia Makes High Tech A Priority In Two New Cities

<B>Malaysia Makes High Tech A Priority In Two New Cities</B>

By Maria Lenhart

Rising from the rainforest outside Kuala Lumpur are Malaysia's answers to Brasilia and Silicon Valley: two ambitious master-planned cities that include a new capital city, Putrajaya, and an adjacent high-tech business and residential enclave called Cyberjaya. While their significance for business travel to Malaysia will not be fully realized for another decade or so, the massive developments already are spurring hotel growth, new transportation systems and speculation about their potential impact on the country's current administrative and financial capital, Kuala Lumpur.

Both cities are multibillion-dollar projects heavily funded by the Malaysian government, with some support from private developers. The further along of the two is Putrajaya, where construction has been underway for three years on a 12,000-acre site about 20 miles from downtown Kuala Lumpur. A recently completed motorway links Putrajaya with Kuala Lumpur, Cyberjaya and Kuala Lumpur International Airport.

While not expected to be fully complete until 2010, Putrajaya is already a working city that includes a green-domed office complex housing the prime minister and his staff, about 5,000 residential units, schools, a university and a wetlands park with a nature interpretive center. By 2002, all Malaysian government departments are scheduled to be relocated from Kuala Lumpur to Putrajaya. When completed, the city will have an estimated population of 330,000 residents living in homes wired for high-speed Internet access and connected to a citywide intranet system. Putrajaya also will include a light rail system and commercial districts with shops, restaurants, hotels and conference centers. An express rail system linking the new city with downtown Kuala Lumpur, Cyberjaya and the airport is set for completion in 2002.

Officially opened last summer, but still only about 10 percent complete, is Cyberjaya, a futuristic city that is part of an even larger high-tech district called the Multimedia Super Corridor. Spanning an area of about 300 square miles, the MSC extends from the Petronas Towers in downtown Kuala Lumpur to the airport. Both Cyberjaya and Putrajaya are between the two points.

Designed to support a population of 240,000 upon completion in 2020, Cyberjaya currently consists of a multimedia university and several office buildings with tenants that include Arthur Andersen, British Telecom Multimedia and Telekom Malaysia. More than 225 companies have applied for future locations in Cyberjaya, including Microsoft, Oracle, Fujitsu and Sun Microsystems. As in neighboring Putrajaya, the 28,000 housing units in Cyberjaya will be fully wired to enable residents to accomplish many everyday tasks online. The city also will include schools, parks, hospitals and commercial districts.

While the master plans for both cities include new hotels, so far there are just two international properties in the area that serve business travelers: the 436-room Pan Pacific Kuala Lumpur International Airport and the 152-room Renaissance Palm Garden Hotel. Opened in 1998, just after the new airport was completed, the Pan Pacific KLIA is a deluxe property with a 24-hour business center, restaurants serving Asian and Western food, concierge floors, fitness center and meeting space that includes a 200-seat auditorium and ballroom seating up to 1,000.

A 20-minute drive from Cyberjaya and Putrajaya, the Pan Pacific KLIA has seen its occupancy levels increase to 76 percent in the first quarter of 2000, a 25 percent jump over the same period last year, according to director of operations Alex Chin. While much of that increase can be attributed to the recovering Malaysian economy, Chin said the hotel is seeing its corporate business grow as a result of the new developments.

"While transient corporate travelers comprise just 50 percent of our total business now, we expect that to be doing nearly all corporate business by 2006 because of all the new companies coming in," said Chin. By that time, an additional hotel is expected to open in the airport vicinity, designed to serve most of the flight crew business that the Pan Pacific now handles. The airport's master plan calls for a total of four hotels to be built by 2020.

Also poised to reap the benefits of its location is the Renaissance Palm Garden, a resort-like property that opened just outside Putrajaya in 1997. The hotel is adjacent to a 27-hole golf course and includes three restaurants, a health spa and 5,000 square feet of meeting space.

While Malaysia's new government and high-tech enclaves are certain to benefit nearby hotels, their impact on Kuala Lumpur's already competitive hotel market, while still unknown, is being viewed as minimal. With business bouncing back into a capital city that two years ago had seen occupancies plummet to below 50 percent, hoteliers are optimistic that the formation of a new capital and high-tech center will not hurt Kuala Lumpur.

"I don't see any real threat to hotels in downtown Kuala Lumpur any time in the near future," said Jeff Crowe, area director of marketing of peninsular Malaysia for Shangri-La Hotels & Resorts. "The government offices are scheduled to finish the move by 2002, but the embassies will take much longer due to the real estate issues involved. Even then, it will take a long time before Putrajaya and Cyberjaya take on that sense of community needed to move most business travelers from downtown hotels, which offer such advantages as dining, shopping and nightlife, plus close proximity to other corporate offices."

At the Pan Pacific Kuala Lumpur, where occupancy levels have soared from 49 percent to 69 percent in the past year, director of operations Chris Lee said he views Putrajaya and Cyberjaya as positive developments for Kuala Lumpur. "Putrajaya has already eased some of the traffic problems in Kuala Lumpur and will continue to do so as more of the government sector moves out there," Lee said. He also noted that the Multimedia Super Corridor extends all the way to the Petronas Towers in Kuala Lumpur.

"An influx of multimedia companies can only benefit Kuala Lumpur hotels," he said. "We're looking at a further boost in corporate business, which is already 75 percent of what we do.