Swing & Pillows, the largest co-living and hotel chain in Malaysia, signed a Memorandum of Understanding (MoU) with the Malaysian Budget and Business Hotel Association (MyBHA).
The MoU will enable budget hotels to lease out unoccupied rooms as long-term rentals on iBilik, the country’s leading room rental platform, and aims to help reduce the impact of rising operational costs for hotels.
The partnership looks to provide a much-needed leg-up for the over 9,000 budget hotels in Malaysia, which are a substantial part of the local tourism industry and its critical contribution to the country’s projected 4% GDP growth in 2023. Hit harder by the pandemic than their larger franchised counterparts, budget hotels are still facing numerous financial challenges on the road to recovery — which, without aid, will threaten the livelihoods of more than 30,000 Malaysians and leave a detrimental dent in the national tourism industry.
Under this collaboration, a portion of unused rooms in MyBHA-member budget hotels can be repurposed and furnished into long-term rental units. This includes facilities like washing machines and laundry dryers, as well as iBilik Smart Meters, a device that provides usage data to give hoteliers better control over energy consumption and overall operational efficiency.
This partial takeover presents a renewed potential for budget hotels, innovating traditional business models with the addition of the co-living element to increase their competitiveness in the wider hotel landscape. Furthermore, budget hotels can more easily maximise the use of their assets like consistently unutilised rooms, while creating a steady alternative revenue stream to meet immediate financial obligations.
The push for diversification into long-term rentals aligns with a growing local demand for alternative accommodation — particularly among younger Malaysians aged 20-39, where one in three are shifting away from traditional home ownership to the flexibility of renting.
“Being a co-living platform, we recognise the immense value of unused budget hotel rooms in changing the way people live. By harnessing these vacant spaces, we are not only optimising the potential of underutilised spaces in the hospitality sector; we are also addressing the demand for more flexible, cost-effective alternative living options — especially in an age where remote work and varied life experiences are becoming a priority. We want struggling budget hotel operators to know that help is on the way, and soon there will be a whole new way to earn: through long-term rentals,” shares Ken Lee, Chief Executive Officer of Swing & Pillows.
To date, Swing & Pillows has acquired 65 hotels with a total of 3,250 rooms, having invested some RM55 million in acquisition and refurbishment.
This MoU is part of Swing & Pillows’ wider investment in hotel technologies and facilities, towards its 3-year projection of partnering and co-managing 15,000 hotel rooms through hotel partnerships. On top of the RM48 million revenue per annum contributed back to its parent company, GFG Group, Swing & Pillows is also estimated to generate RM200 million in annual market revenue that will directly benefit the growth of budget hotels nationwide.
Furthermore, the collaboration will see Swing & Pillows do its part to onboard more budget hotels in MyBHA’s 2,000-strong network of members nationwide. Hotels under the association will have easier access to wider industry support and connections, while MyBHA’s stronger membership base will allow them to better represent the budget hotel industry’s interests in larger conversations on policy and financing.
This landmark MoU was signed by Lee and Dr Sri Ganesh, President of MyBHA and was witnessed by YBhg. Dato’ Dr Ammar Abd. Ghapar, Director General of Tourism Malaysia.