KUALA LUMPUR, July 1 ― Hotel Istana Kuala Lumpur will cease operations on September 1, according to a circular from its management.

The June 30 circular, which Malay Mail verified, was signed by general manager Nooradzzudin Omar who explained that a voluntary separation scheme would be offered to affected workers.

In the circular, Noorazzudin said the management was forced to make the difficult choice to close the hotel due to the challenging economic situation caused by the Covid-19 pandemic that exacerbated the stiff competition in the hospitality market.

"We have arrived at this decision after considering the present circumstances and all available options. We are left with little choice other than to proceed with this closure,” he said.

"Many of you will be aware that our competitive advantage has declined over a period of time in the face of stringent competition from our neighbouring hotels and service apartments. The situation has now been aggravated by the Covid-19 pandemic which has and continues to impact our industry and its ability to achieve normality.

"This has impacted our business, rates, returns and occupancy despite our best efforts. Even as a quarantine hotel, we are incurring monthly operational losses. As such after a proper evaluation of the hotel and its viability, we have decided to cease operations.’’

The hotel and tourism industry has been among the hardest hit by the government’s measures to try and contain the Covid-19 pandemic.

Last month, the Malaysian Association of Hotels issued a desperate plea for assistance by saying many of its members would be forced to close as a result of the 80 per cent decline in revenue since March last year.

Malaysia is currently in Phase One of the National Recovery Plan in which only approved essential services were allowed.

Hotel Istana is a five-star accommodation located in Kuala Lumpur’s golden triangle and has been in operation since 1992 when it was launched by the prime minister at the time, Tun Dr Mahathir Mohamad.

The approximately 500-room hotel is currently owned by the Tradewind Corporations.