Singapore Hotel rates up, as visitor arrivals hit record
Average January room rate reaches a high of $237, fuelling fears that budget travellers will keep away
By Natalie Soh
SINGAPORE tourism set two records last month - one good, one worrying.
First, the good bit: 883,000 visitors arrived, an all-time high for January, and up almost 7 per cent from a year ago.
That kept up a string of record-setting months for arrivals stretching all the way back to 2006.
The other record? The average hotel room rate hit an all-time high of $237, fuelling concerns among some industry players that Singapore risks pricing itself beyond the reach of more budget-conscious tourists from the region and China, who form a large part of visitors here.
National Association of Travel Agents Singapore chairman Robert Khoo said: ‘The risk is that people start getting the perception that Singapore is too expensive to come to, and that would be disastrous in the long run.’
Average room rates broke through the psychological $200 ceiling seven months ago, hitting $210 in June last year.
They went down a little in July, but have been on the up and up since then, fuelled by a shortage of rooms.
With the average rate at $237, four- and five-star hotels are pricing their rooms at between $300 and $400 - or more - a night.
Industry watchers, such as Dr Donald Han, managing director of property consultants Cushman & Wakefield, estimate that Singapore is short of between 1,000 and 1,500 rooms this year, and this could mean prices rising further.
Visitors last month collectively spent 3.5 million days here, 20 per cent more than in January last year.
Indonesians, mainland Chinese and Australians formed the top three groups.
January is traditionally a slow one for visitors, and the numbers usually start picking up in April and June.
With a full slate of exhibitions, conferences and events such as the world’s first Formula One night race, Singapore will continue to be a prime destination.
But high room rates are already putting off some travellers, said Berzurk.com’s CEO Martin Symes.
The website collates travel offers, and Mr Symes said he is seeing more potential visitors who are not making bookings after checking hotel prices here.
Today’s room rate situation is an almost complete reversal from that in 2000, when hotels were engaged in a cut-throat competition to fill rooms.
Most travel agents that The Straits Times spoke to said there was little they could do but wait out the room crunch.
But there is a silver lining, said Cushman & Wakefield’s Dr Han: Room rates here are still relatively lower than in other Asian cities such as Tokyo, Seoul or even Jakarta.
‘Their average rates are US$200 (S$280) plus, so there’s some room to move.’
Also, at least 10 hotels are scheduled to open soon. They include the Crowne Plaza Changi Airport Hotel, the Park Hotel Clarke Quay and Far East Organization’s Quincy Hotel off Orchard Road.
For the longer term, the Government has put up 12 sites for new hotels, in traditional tourist areas as well as off-the-beaten-path areas like Bukit Merah.
Source : Straits Times - 27 Feb 2008
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