KUALA LUMPUR — Malay-sia's hotel room rates will climb to a record this year as operators including Millennium & Copthorne Hotels Plc refurbish properties and the government steps up efforts to lure tourists from the Middle East and China.

Occupancy at the 200 three-to-five-star hotels in and around the capital Kuala Lumpur will exceed last year's record 74 percent level, lifting average room rates to $92 a day, Malaysian Association of Hotels Vice President Ivo Nekvapil said. Last year, average rates climbed to $84.

"Room rates will rise to give us a degree of self-respect, as our rates are the most inexpensive in the region," Nekvapil said late yesterday. "Hotel operators are also refurbishing or they will lose out."

Malaysia's government aims to attract a record 21.5 million visitors this year and $15 billion in tourism receipts, extending a yearlong promotion to August. More than 20 million visitors arrived in Malaysia in 2007, an all-time high. That may lift the prospects for Robert Kuok's Shangri-La Hotels (Malaysia) Bhd. and Westin Kuala Lumpur, owned by Thailand's richest man, Charoen Sirivadhanabhakdi.

Hotel prices in Kuala Lumpur are almost half that of Singapore, where the average room rate was $153 in October, according to the Singapore Tourism Board. The Mandarin Oriental Hotel in Kuala Lumpur charges $205 for a deluxe room, compared with $919 for the Mandarin Oriental in New York, according to the U.S. hotel's Web site.

"We have it all here — shopping, good food, good hotels — and it's cheap," said Nekvapil. Recent demonstrations by disgruntled groups in Malaysia will be "short-lived" and won't deter tourists, he said.

Police fired water cannons and tear gas to disperse a November rally in Kuala Lumpur by the Hindu Rights Action Force, which brought together about 10,000 Malaysian ethnic Indians. They were demanding an end to alleged racial discrimination.

Millennium & Copthorne Hotels, which runs 112 properties worldwide, opened its first hotel in Malaysia in June last year after renovating and rebranding the former Regent Kuala Lumpur.

The government is spending $72 million to promote attractions, including a space shuttle simulator theater, the Petronas Formula One Grand Prix and dragon boat races. The promotion marked the 50th anniversary of Malaysia's independence from Britain on Aug. 31 last year.

"We have a great tourism inventory," said Previndran Singhe, chief executive of real-estate consulting company Zerin Properties Sdn. There's also "huge excitement in shopping with the opening of the Pavilion mall" and the Sunway Pyramid, which has completed an expansion, he said.