KUALA LUMPUR: Lifestyle property developer Eastern & Oriental Berhad (E&O) will cease operations of E&O Residences Kuala Lumpur (EOR KL), a segment within its hospitality division, next month.
Almost 50 employees are expected to be impacted by this move, and those who are eligible have been offered a voluntary separation package.
"With the cessation of operations on Sept 18, our priority is to ensure all our staff are supported and given appropriate notice in accordance with their employment contract," a company spokesman said when contacted.
The EOR KL, which is located along Jalan Tengah here, opened eight years ago and comprises 200 serviced apartment suites.
"Since opening in Dec 2012," the spokesman said, "EOR KL's guest profile has been an international mix of long-stay business and leisure clientele.
"Over the past several years, EOR KL's viability as a business has been challenged by global economic uncertainties dampening demand while faced with intense competition from increasing supply of new serviced apartments in the capital, and unforeseen market disruptors in the form of online direct accommodation platforms.
"Most recently, the Covid-19 pandemic dealt the final blow to EOR KL's already struggling business," he added.
EOR KL and Penang's landmark heritage hotel, the Eastern and Oriental Hotel (E&O Hotel) in George Town, belong to the hospitality division of the E & O Group.
In 2018, the group disposed of its the Lone Pine Hotel in Penang.
Asked if the group is planning to downsize its hospitality division with the disposal of Lone Pine and closure of EOR, the spokesman said:
"While property development remains the mainstay of the E&O Group, we consider the hospitality division to be a vital component.
"It is our namesake and the cherished legacy of the Eastern and Oriental Hotel is the premise that our brand name is built upon."
"The Group made a considerable investment in the refurbishment of the Heritage Wing of the E&O Hotel, which was completed in 2019, and was extremely well received by both our local and international guests," the spokesman added.
"Unfortunately, the Covid-19 crisis hit the industry soon after and our focus is now centred on mitigating the effects of the pandemic and adding value to both our product and service offerings.
"We believe that the E&O Hotel's distinct heritage identity and global recognition as a foremost luxury establishment will accord it leverage to maintain its market leader positioning in Penang."