In­creas­ing com­pe­ti­tion puts Sin­ga­pore ho­tels on edge

Hote­liers are wor­ried about the lacklustre eco­nomic growth, not to men­tion the ex­pected mod­est growth of 4% for tourist arrivals in 2017.

Singapore Business Review - - RANKING: HOTELS -

As one of the world’s top meet­ing spots and fi­nan­cial hubs, it seems that Sin­ga­pore is never in dan­ger of ex­treme declines in vis­i­tor arrivals.

Its boom­ing hos­pi­tal­ity in­dus­try is sup­ported by 33,000 in­di­vid­u­als work­ing to pro­vide the world’s top de­ci­sion mak­ers, fore­most com­pa­nies, and the city-state’s reg­u­lar vis­i­tors the best hos­pi­tal­ity ser­vices and deals.

How­ever, with the rapid growth of other cities around the world and in the re­gion, Sin­ga­pore’s ho­tel in­dus­try needs to keep evolv­ing and in­no­vat­ing if it longs to keep its cov­eted spot in the hos­pi­tal­ity busi­ness, par­tic­u­larly in the meet­ings, in­cen­tives, con­fer­enc­ing, and ex­hi­bi­tions (MICE) sec­tor. A re­port by DBS Bank re­veals that

2017 is go­ing to be a chal­leng­ing year for the tourism sec­tor, with a mod­est growth of 4% for tourist arrivals.

“With the car­ry­over of new ho­tels which were orig­i­nally sched­uled to open in 2016 into 2017, our ear­lier ex­pec­ta­tion of a more bal­anced mar­ket in 2017 is likely to be de­layed into 2018 where the sup­ply of new ho­tels drops off. The de­cline in new room sup­ply in 2018 is due to the lack of new land re­leased by the Sin­ga­pore gov­ern­ment for ho­tel de­vel­op­ments over the past two years,” says Derek Tan, vice pres­i­dent at DBS Bank, Group Eq­uity Re­search.

Stiff com­pe­ti­tion ex­ists in the ho­tel in­dus­try as sup­ply in­creases and de­spite eco­nomic un­cer­tain­ties in the re­gion and be­yond. Ac­cord­ing to the UNWTO Tourism High­lights of 2016, the global ho­tel in­dus­try re­mains to grow, thereby pro­vid­ing op­por­tu­ni­ties for lo­cal com­pa­nies to amass rev­enue through in­ter­na­tion­al­i­sa­tion. With the growth of the hos­pi­tal­ity in­dus­try, hote­liers are then ex­pected to keep up and pro­vide cre­ative so­lu­tions as cus­tomers con­tinue to change and reeval­u­ate their ex­pec­ta­tions.

“Sin­ga­pore faces in­creased com­pe­ti­tion from other tourism mar­kets through a va­ri­ety of fac­tors which in­clude eas­ier ac­cess to other coun­tries through the re­lax­ation of visa re­stric­tions, like mul­ti­ple en­try visas for Chi­nese vis­i­tors into Ja­pan; de­val­u­a­tion of the other re­gional cur­ren­cies, po­ten­tially mak­ing it cheaper to visit other coun­tries com­pared to Sin­ga­pore, e.g. a weaker Korean won and Ja­panese yen; and Sin­ga­pore al­ready hav­ing a high mar­ket share, e.g. Sin­ga­pore ac­counts for 38%-39% of to­tal In­done­sian out­bound travel,” ex­plains Tan.

Re­think­ing busi­ness

Frank Sor­gio­vanni, head of re­search Asia Pa­cific, JLL Ho­tels & Hos­pi­tal­ity Group, says that Sin­ga­pore’s ho­tel in­dus­try is very sim­i­lar to Hong Kong in that tightly held ho­tel stock amongst gen­er­a­tional own­ers sees lit­tle in­vest­ment ac­tiv­ity. He notes that in­vestors have be­gun shift­ing their fo­cus to other mar­kets like Aus­tralia. “Two of the most pre­ferred in­vest­ment mar­kets for 2017 are Ja­pan and Aus­tralia, fol­lowed by Thai­land, Viet­nam, and the Mal­dives. In the In­dian Ocean, in­vestor in­ter­est is ex­pected to go be­yond the highly soughtafter Mal­dives with a re­newed fo­cus shift­ing to the Sey­chelles and Mau­ri­tius re­sort mar­kets.”

The Ho­tel In­dus­try for Sus­tain­able Growth, a re­port by the Sin­ga­pore Tourism Board (STB), men­tions that the city-state’s hote­liers must be abreast of the cur­rent trends and the press­ing is­sues in the hos­pi­tal­ity in­dus­try in or­der to en­cour­age in­vest­ment. Ac­cord­ing to STB, ho­tels must lever­age tech­nol­ogy and an­a­lyt­ics, reeval­u­ate busi­ness pro­cesses and mod­els, en­hance cus­tomer ex­pe­ri­ence and en­gage­ment, and cre­ate dif­fer­en­ti­ated value propo­si­tions, amongst oth­ers.

Across the city-state’s ho­tel in­dus­try, STB found im­pres­sive ex­am­ples of in­no­va­tion from

Sin­ga­pore faces in­creased com­pe­ti­tion from other tourism mar­kets through a va­ri­ety of fac­tors which in­clude eas­ier ac­cess to other coun­tries through the re­lax­ation of visa re­stric­tions.

Marina Bay Sands re­mains at the top spot with over 2,500 rooms

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