LITTLE-KNOWN Ri-Yaz Hotels & Resorts Inc is on an aggressive expansion path both locally and abroad, ahead of a planned listing on Bursa Malaysia in 2017 or 2018.

The planned listing comes following the entry of a new partner, Tan Sri Abdul Rashid Abdul Manaf, in Ri-Yaz and the establishment of three hotels in popular resort destinations in Malaysia, Indonesia and Thailand.

Abdul Rashid is well known in the property industry as he is the founder and director of Eco World Development Group Bhd as well as former chairman of S P Setia Bhd.

Ri-Yaz, which means devotion, was established seven years ago by Datuk Shaheen Shah with the aim to manage hospitality assets for owners. Two years ago, Shaheen, who is Ri-Yaz’s CEO, sold his 60% stake in the company to Abdul Rashid. After Abdul Rashid came on board, the hotel group changed its growth strategy.

“In 2013, we welcomed a new partner, Tan Sri Abdul Rashid Abdul Manaf. With his entry as chairman and partner, the company changed its direction — which is to own hotels in order to build our own brand,” Shaheen tells The Edge.

“The plan was to own three properties within two years, so as to be able to market them to the Europeans, especially during the winter months,” he says.

Accordingly, Abdul Rashid and Shaheen came up with hotel brands RI-YAZ, the pure by Ri-Yaz, TAN’YAA Hotel by Ri-Yaz and dash by Ri-Yaz, and went on to invest in hotels located in popular island getaways in the region such as Bali in Indonesia, Koh Samui in Thailand and Langkawi in Malaysia.

Shaheen says the three islands rank high on the list of popular tourist destinations and that it is common for tourists to visit more than one island during the same trip.

To date, Ri-Yaz has invested RM90 million in a 139-room dash Hotel in Seminyak, Bali, RM65 million in a 60-room dash Resort in Koh Samui and RM30 million on refurbishing a 104-room dash Resort in Langkawi, which was previously The Lanai. The group has a 30-year lease on the Langkawi hotel.

Ri-Yaz will also be managing two hotels in Cyberjaya, Selangor, and one in Sungai Petani, Kedah.

These six hotels will provide the group with a total room inventory of 566.

Of the six establishments, the ones that are operational now are the dash Hotel in Bali and the 84-room TAN’YAA Hotel in Cyberjaya.

Other hotels scheduled to open this year include container hotel dash Box in Cyberjaya (July), dash Resort in Koh Samui (July) and dash Resort in Langkawi (October). the pure in Sungai Petani will open next year. It is owned by Dynamic Capital Sdn Bhd.

While Ri-Yaz has been in investment mode over the past couple of years, it has decided to pause investments next year to allow its existing hotel assets to mature ahead of its planned initial public offering. Nevertheless, it will continue to seek hotel management contracts.

“We are looking at a listing in 2017, after recording a full financial year for all the properties,” Shaheen says, adding that the listing was suggested by the chairman.

The group expects the hotels to be profitable in no time given the high gross operating profit (GOP) it is expecting. GOP is gross revenue (from rooms, food and beverage, laundry and business centre) minus cost of operations (wages, electricity and amenities). According to Shaheen, the GOP for its hotel in Bali is 50%, while that for the Koh Samui and Langkawi hotels are estimated at 48% and 42% respectively.

“These are mature tourism destinations,” he points out.

When asked about the group’s future expansion plans, Shaheen reveals it is keen on having a hotel in Penang. It is in talks to build one with a group that has a vacant parcel in Tanjung Tokong. “This parcel measures 1.5 acres and we are looking at possibly developing it to our specifications,” he says, adding that it may be ready in 2018 and carry the Ri-Yaz brand name.

The landowner of the Tanjung Tokong parcel is currently building a hotel in Pantai Tengah, Langkawi. Shaheen says the landowner is also keen to appoint Ri-Yaz to manage the Langkawi property for the group. Should this materialise, the hotel with 220 rooms could carry the brand name of the pure.

Abroad, Ri-Yaz is in talks with parties to enter the United Arab Emirates (UAE) and India.

Negotiations are ongoing between Ri-Yaz and a Dubai group, which owns 16 hotels. The UAE group is interested in roping in Ri-Yaz to manage a 230-room five-star property in Dubai.

“We are also in discussions with parties in Visakhapatnam, Tirupathi and Agra. These are fund managers who are buying parcels of land from individual owners. They will put the parcels together and develop them,” says Shaheen.

Ri-Yaz owns a parcel in Sabah near Shangri-La’s Rasa Ria Resort & Spa. However, the group has no plans to develop the site at the moment.

Ri-Yaz had previously managed Cyberview Resort & Spa and The Heritage Resort in Terengganu. It had also signed up to manage several other hotels, including new developments in Langkawi and Penang. Due to delays in launching the projects, Ri-Yaz opted out of them in the end.

This article first appeared in The Edge Malaysia Weekly, on June 22 - 28, 2015.

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