Singapore Hotels Bouncing Back From Economic Crisis
<B>Singapore Hotels Bouncing Back From Economic Crisis</B>
By Judy Jacobs
Asia is well on its way to recovery from economic crisis, and in no place is this more evident than in the Singapore hospitality industry. Hotel occupancies and rates have risen dramatically, and a rapidly growing local information technology industry is helping to drive the nation-state's meetings market.
According to the Arthur Andersen Asia/Pacific Hotel Industry Benchmark Survey of the first quarter 2000, hotel business is on the rebound. Occupancy rates in Singapore increased 19 percent--to a citywide 79.7 percent--over the same period for the previous year. Average room rates were up 5.9 percent, to $97.84. Hotels in the Orchard Road area had a higher average room rate of $121, while downtown's Marina Square registered an average of $93. In spite of a rise in rates, Singapore still is behind where it could have been.
"Unfortunately, our rates are equivalent to what they were in 1992," said Yasuhiro Uetani, general manager of the Pan Pacific Hotel at Marina Square. Rates at the Pan Pacific, and other hotels, will continue to rise steadily, but not drastically, he predicted. "Even though Singapore is experiencing an extremely good year in 2000, we expect to increase the room rate a maximum of 10 percent in the coming months," Uetani added.
Dexter Chia, director of sales at the Shangri-La Singapore, agreed: "The rates we are charging now are equivalent to the year 1992/93 and far less than those in 1994 to 1997," he said. "An increase of from 4 percent to 8 percent in room rates is expected in the coming months."
Even though occupancies are increasing in 2000, this growth may not carry over to next year, at least according to one hotelier. "Next year's demand is expected to be relatively weaker, due to fewer citywide conventions, and the supply will increase due to the opening of the Fullerton Hotel and the completion of the Westin Plaza's renovation," said Arthur Kiong, director of sales at the Ritz-Carlton. "This will add more than 414,000 deluxe room nights to the market as compared with the first five months of this year. In spite of hotels being under pressure to increase room rates in 2001, I do not expect rates to grow more than 8 percent overall."
The Grand Fullerton, the only five-star hotel under construction in Singapore, is expected to open at the end of the year in the historic General Post Office building, which dates to 1928. It sits on the edge of the city's colonial district on a site which, according to Chinese geomancy, is at the head of the dragon and therefore the most fortuitous place in Singapore.
Developed by Sino Land of Hong Kong, the 388-room property will combine traditional architecture with a new Asia theme, highlighting the art and culture of Southeast Asia. Meeting facilities will include 15 state-of-the-art meeting rooms and a ballroom, which will accommodate more than 500 people. The hotel also will incorporate a spa.
The new Grand Fullerton, along with many of the city's other upscale properties, is poised to benefit from a new breed of traveler. "Ten years ago, most of the business travel from North America was for fact- finding or oil-related business," Pan Pacific's Uetani said. "Now, the majority of business travel is related to the IT industry." He expects the IT business to increase substantially, bringing even more business travelers from the United States.
During the past few years, the Pan Pacific's guests included 6.5 percent from North America, a figure Uetani hopes to increase to between 10 percent and 12 percent. The Pan Pacific is well situated to take advantage of IT business travelers, both FITs and meeting attendees, he added: "Suntec City, an office complex adjacent Marina Square where the Pan Pacific Hotel is located, is establishing itself as the Silicon Valley of Asia. Thus, many IT-related companies, such as Microsoft, Lucent Technology, Cisco and H-P, are holding constant meetings for the introduction of and education about new products."
Downtown's Marina Square is not the only area to benefit from high-tech meetings, however. Meetings also are heading for Orchard Road, where the Shangri-La is seeing substantial growth in its meetings business. "Corporate meetings are growing strongly in Singapore and especially at our hotel," said Chia. "The percentage increase over the past two years is more than 100 percent." The business is coming mainly from IT firms and banks, as well as telecommunication, digital and electronic and pharmaceutical companies. In spite of the fact that the Shangri-La added five function rooms--for a total of 17--as part of a major renovation completed last year, Chia said it will add another three, each accommodating 16 people seated boardroom style or 30 classroom style.
Meanwhile, Singapore is expected to continue to thrive as a meetings destination. It has benefited this year from the Singapore Tourism Board's Global Meet 2000, a program inaugurated in 1998 that gives corporate and other groups special rates, packages and services for agreeing to hold a meeting in Singapore during the millennial year.
Singapore's success as a meeting destination, in the long term, however, will depend more on the nation's location and infrastructure than any special deals. "Singapore as a destination for corporate meetings has several selling points," Chia said, "including its infrastructure, telecommunications, banking, language, airport, location on the map between east and west, north and south, and its price compared with Hong Kong, Japan and Taiwan.