The growth in the hospitality industry in 2007 is expected to be driven by strong growth in tourism. By the close of 2006, total visitor arrival hit 9.7 million, a 9% increase over the 8.9 million visitors in 2005, pushing the total number of visitor days to 32.9 million, up from 30.5 million. As a result, the average occupancy rate among local hotels increased to 85% in 2006.

The growing demand for hotel rooms has stirred great interest among hotel developers, especially the Public-listed Companies, for a share of the hospitality pie. Projects in the pipeline include the St. Regis Hotel , Amara Sanctuary Resort Sentosa, The Boutique Hotel @ Tiong Bahru and Airport Hotel. Such developments not only bring positive impact to the Hospitality sector but also the property and construction sectors.

The St. Regis Hotel, a joint venture between City Developments Limited, Hong Leong Holdings Limited and TID Pte Ltd is poised to provide 299 plush guest rooms upon its completion in year 2007. The St. Regis Singapore will be developed on a 180,000 square foot site in the heart of Singapore's uptown Orchard Road shopping and entertainment district. This will be an integrated property complex comprising hotel, apartments and service apartments. 

Executive Chairman of the Hong Leong Group Singapore and its listed property arm City Developments Limited, Mr Kwek Leng Beng, stated that the vision for this property is to be one of the finest landmarks in Asia. He also mentioned that they are proud to welcome the impeccable elegance of St. Regis, which they hope will be the super deluxe hotel in Singapore. This is in line with the Singapore's “Tourism 21” strategy to be a Tourism Capital. Mr Kwek also feels confident The St. Regis Singapore will play a key role in establishing Singapore in the international luxury hotel market and take Singapore to the forefront of the hospitality industry. 

On the other hand, L.C. Development Limited will build and operate the city-state's first airport hotel, named Crowne Plaza Changi Airport Hotel. The $92 million hotel expected to open by mid-2008, will have up to 350 guest rooms and be linked to the new Terminal 3. The new airport hotel will enhance the convenience of air travelers by offering them hotel accommodation that they can check into shortly after clearing immigration and customs at Changi Airport. 

With more projects scheduled for completion in the coming years, new hotel rooms are expected to increase by approximately 5,000 over the next 4 years, adding to the existing 37,000 rooms.

In addition to providing more hotel rooms, existing hotels are continually upgrading themselves to keep up with the times. 

Industry veterans such as the Overseas Union Enterprise Limited and Shangri-la Hotel Limited are recognizing the importance of product renewal to maintain, if not grow, their customer base. Hotels, such as Meritus Mandarin and The Oriental have revamped their interiors to increase their competitiveness within the industry. The Oriental, Singapore managed by Mandarin Oriental Hotel Group, has undergone a multi-million-dollar renovation. Overseas Union Enterprise Limited has also completed its soft refurbishments of the guestrooms for 

Meritus Mandarin at the South Tower in year 2005. Chatterbox, Pine Court and Mezzanine lounge (now known as Mezebar lounge) were also refurbished.

Another key challenge faced by the industry comes primarily from competition within the region. As pointed out by Mr. Simon Israel, Chairman of STB at the 20th Tourism Awards, “As Singapore faces an increasingly competitive tourism landscape, it is important for the industry to continue to place greater emphasis on innovation, creativity and experiential factors.” 

Hotels are beginning to think beyond the ordinary to offer innovative concepts within their premises. One such example is the unique dining experience of open-concept cooking stations for guests at “The Line” at Shangri-La Hotel and “Straits Kitchen” at Grand Hyatt.

The efforts by STB to build the Uniquely Singapore brand overseas, the re-making of Orchard Road into one of the world’s greatest shopping streets, the transformation of Clarke Quay into the country’s most exciting 24-hour entertainment precinct and the recent launch of Singapore’s largest retail development at Vivocity will definitely boost tourism and the hospitality industry further. In the next 3 year, the number of visitor arrival is expected to increase further with the scheduled opening of the “Singapore Flyer”, the 165-metered observation wheel in Marina, and the opening of the 2 Integrated Resorts - Marina Bay Sands and Resorts World at Sentosa in 2009 and 2010.

The number of business travelers is also expected to grow significantly as Singapore continues to position itself as the choice business and MICE (Meetings, Incentives, Conventions, Exhibitions) destination within the region. For 2 consecutive years, 2005 and 2006, Singapore was ranked No. 2 in the list of the world’s top convention cities, compiled by the Amsterdam-based International Congress and Convention Association (ICCA). A strong line-up of at least 12 mega events this year will consolidate Singapore’s position as a top conference and exhibition destination. Hotels with business services and facilities will be in great demand. 

Besides enhancements to the “hardware” in the tourism and hospitality industries by both the Government and the private sector, initiatives by various agencies to improve services such as the yearly Business Excellence Award - Service Excellence and the "Go the Extra Mile for Service" (GEMS) movement will continue to spur hotels and other players in the hospitality industry to upgrade their service level. As the hospitality industry is highly service-oriented, it is crucial for hotels to make service competitiveness part of their business focus. 

Indeed, the outlook for the hospitality industry in Singapore is expected to remain upbeat with the rapid transformation of Singapore and budget airlines making travel more affordable in the region. 

With the influx of tourists and consequently, the high occupancy and/ or improved average room rates, the expected spillover effects, as illustrated by the case of the retail sector boom in 2006, is likely to continue to manifest positively not only towards companies in the hospitality sector, but also the Services and Transportation sectors, strengthening along with it Singapore’s domestic demand and economic growth.

Article Contributed By DP Information Group
www.dpgroup.sg