www.shaproperty.com

 
Business Times - 02 Oct 2007

Transforming Singapore's hotel industry

Global players are injecting new brands and product concepts into the local hotel scene

By CHEE HOK YEAN

SINGAPORE'S hotel sector is currently enjoying a new surge of energy and opportunities brought about by the government's efforts to reinvigorate tourism.

Complementing efforts by the Singapore Tourism Board (STB) to raise visitor numbers to 17 million by 2015, the government had in recent years released more sites for hotel development under its Government Land Sales (GLS) programme to meet the anticipated accommodation needs.

The state land tenders have generally been met with keen industry interest, buoyed by the strong trading conditions that have prevailed with the current strong demand and tight room supply. This is a stark contrast to the 1990s when the government announced a hotel safeguarding policy in 1997 to check the creeping trend of hotels being converted to residential use.

Latest numbers from the tourism authority showed a total of 225 hotels and 36,891 rooms in Singapore's accommodation market as at end-2005. There is no existing star-rating system in Singapore and the current hotel stock is sub-divided into 103 gazetted hotels (30,445 rooms) and 122 non-gazetted hotels.

Jones Lang LaSalle Hotels estimates that around 81 per cent of the gazetted 30,445 rooms fall within the upper-tier four-star and five-star hotel segments.

Geographically, the majority of these upper-tier hotels are concentrated along the traditional hotel belt: Orchard Road, City Hall, Suntec City/Marina Centre, Bras Basah/Bugis and the CBD/Boat Quay/Clarke Quay.

Familiar international brands found within these localities include the Ritz-Carlton, Marriott, Grand Hyatt, Hilton, Shangri-La, Four Seasons, Raffles, Swissotel, Traders, Pan Pacific, Conrad, Meritus, Novotel as well as The Oriental Singapore which was re-named the Mandarin Oriental Singapore from Sept 25.

Outside of these locations, a cluster of smaller, self-managed budget or boutique hotels have emerged in the Chinatown, Little India and Geylang/ East Coast/Joo Chiat areas.

Sentosa Island is now home to a handful of mid- to high-end hotel properties such as The Sentosa Resort & Spa, Shangri-La's Rasa Sentosa Resort and the new Amara Sanctuary Resort Sentosa.

A more exciting local hotel scene is unfolding with a new cast of players, additional brands and creative product concepts. Riding on the opportunities presented by the renewal of the tourism industry, international hotel management companies such as Accor, Starwood Hotels & Resorts and the InterContinental Hotels Group (IHG) are growing their presence in Singapore by bringing in other brands from their portfolios that are currently not in this market.

Ranging from boutique to mid-tier to luxury establishments, many of these new hotel developments are being established in non-traditional hotel locations such as Tanjong Pagar, One-North, Labrador Park and Novena areas. A new 320-room Crowne Plaza, a brand from the IHG family, is scheduled to open at the Singapore Changi Airport next year.

United Engineers, a local developer with a strong focus on the residential sector, has announced plans to build a business hotel at Singapore's biosciences hub at South Buona Vista.

With the latest GLS programme for the second half of 2007 including sites like Jalan Bukit Merah/Alexan- der Road, Outram Park and Kampong Glam for hotel development, more hotels can be expected to spring up outside of the typical hotel hot spots.

The two upcoming mega integrated resorts (IRs) at Marina Bay and Sentosa will also be the launch-pads for new hotel brands and concepts. While Sands @Marina Bay will offer 2,500 rooms in the upper-tier sector in 2009, Resorts World @Sentosa will add another 1,830 rooms in six hotels in 2010.

The latter will comprise a Hard Rock Hotel, the Hotel Michael boutique hotel, the Festive Hotel with a Hollywood theme, an iconic Maxims Residences, the Equarius Hotel with a lush greenery theme and the ESPA Villas.

Resort and villa-type establishments, too, are making a stronger statement in Singapore. Apart from the ESPA Villas, Villa Raintree @Labrador Nature Reserve (a refurbishment project) as well as the recently opened Amara Sanctuary Resort and the upcoming Capella Singapore at Sentosa fall under this category.

Meanwhile, the luxury hotel segment will soon witness the opening of the 299-room St Regis Hotel at end-2007. Sino Land plans to open a new 120-room boutique hotel at Collyer Quay in 2009, while a new 320-room W Hotel at Sentosa Cove is expected to be operational by the end of 2010.

The entry of these new hotels will up the ante in Singapore's luxury hotel segment, which currently comprises the Four Seasons, Shangri-La, Ritz-Carlton and The Fullerton.

The present lack of quality branded mid-tier accommodation options has created opportunities for new niche developments that are targeted at specific market segments. For example, Far East Organization's upcoming hotel at Sinaran Drive next to the Tan Tock Seng Hospital will cater to the needs of the growing inbound medical tourist segment.

Similar opportunities are available at a government 'white' site on the current Reserve List that is located at Outram Road/Eu Tong Seng Street to develop a 555-room hotel near the Singapore General Hospital.

The proliferation of low-cost carriers in Asia has also fuelled the growth of lower-tier segment, with the new Ibis Hotel scheduled to open at Bencoolen Street in 2009 a case in point. More recently, the Hong Leong Group has linked up with Istithmar PJSC and Tune Hotels.com to open around 30 budget hotels in South-east Asia, including Singapore.

The completion of the Marina Bay and Sentosa IRs as well as supporting infrastructure and tourist attractions in the Marina and Sentosa vicinities will collectively cultivate an environment conducive for the entry of differentiated quality and luxury hotel products to the Singapore marketplace.

The arrival of new brands and new-generation properties such as W, Westin, Fairmont, emerging Middle East Groups like Jumeriah and from the Indian sub-continent, groups like Taj and Oberoi, will provide synergy for the broader local hotel market and is anticipated to generate a wider geographical capture and mix of tourist traffic to Singapore.

In the longer term, new hybrid products such as condotels (or condo-hotels) that are established in the US but still relatively untested in Asia, may be introduced, although the success of such products will hinge on the regulatory framework.

In the meantime, with a wider selection of accommodation offerings to suit the different budgets and expectations of visitors, guests can look forward to a more varied and interesting stay experience in Singapore.

The writer is Jones Lang LaSalle Hotels executive vice-president

Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.