Leng Beng sees rising hotel rates

Leng Beng sees rising hotel rates

SINGAPORE’S hotel room rates may rise by ‘quite a bit’ as the island-state draws more tourists, said Kwek Leng Beng, chairman of City Developments Ltd, one of the country’s biggest hotel operators.

The city will be short of about 3,000 hotel rooms, Mr Kwek said, referring to the government’s sale of land sites for new hospitality developments. Mr Kwek, who spoke at a briefing in yesterday, wasn’t more specific on the time frame for the hotel room shortage.

Singapore, prospective host to Formula One’s first night Grand Prix and two casino-resorts that will help draw more convention delegates, may face a shortage of hotel rooms as the government expects the number of visitors to double to 17 million by 2015.

‘The meetings, incentives, conventions and exhibitions business is going forward, and with Formula One, rates will go up quite a bit,’ Mr Kwek said.

Hotel operators may charge tourists an average $600 daily from $170 now as occupancy increases in the next eight years, according to Merrill Lynch & Co. About 3,300 rooms are expected to be added annually, falling short of the average 4,100 units needed, a team led by Merrill Lynch analyst Melinda Baxter wrote in a June 18 report.

Singapore is adding new attractions, including a Universal Studios theme park and the world’s largest Ferris wheel, to tap an increase in global travel. The government expects to triple tourism spending to $30 billion by 2015.

City Developments is the parent company of Millennium & Copthorne Hotels plc, the UK operator of the Biltmore in Los Angeles. - Bloomberg

Source: The Business Times, 27 June 2007

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