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LIESBETH FOESTERS travels for business around the world, but none of her hotel rooms was smaller than the one she got in Singapore. Her company has a tight budget.
It is a compromise that works well both for travelers like Foesters and the hotel industry in Singapore, which for the past two years has been aggressively targeting middle income guests.
Visitors from upwardly mobile China and India are providing much of the growth, flocking to Singapore to enjoy a city more modern and clean than anywhere back home.
“I have been to Gardens by the Bay and Skypark at Marina Bay. I came to see this place because it’s beautiful and modernized – a garden city,” said Chen Jianan, a Chinese tourist from Hainan.
Visitor arrivals are on track for their biggest rise since 2012, helped by the realignment in strategy, offering everything from smaller rooms and lower prices to new services such as unlimited laundry and age-based discounts. The data is due next week.
This is a new era for Singapore’s hotels, once known for their opulence.
Visiting a city that for the past three years the Economist Intelligence Unit has ranked the world’s most expensive to live in may have been alright when travel budgets were fatter, but less so in these more thrifty times.
The banking industry has contracted globally and fewer oil executives are coming to Singapore due to the crash in crude prices. Reflecting a structural shift in the tiny city-state’s economy, the more commonly sighted business visitors these days are pharma and tech professionals, according to industry executives and analysts.
Millennials flying in for business in Singapore’s growing Fintech space are more interested in good WiFi and how much fun they can have in the hotel’s common areas than elegant furnishings.
“The technology industry in Singapore is far more supportive of mid scale and upscale than luxury, which finance or oil and gas executives typically prefer,” said Frank Sorgiovanni, head of research, Asia Pacific, at JLL’s hotels and hospitality group.
According to real estate services firm CBRE, the number of mid scale rooms — which government data show cost on average S$170 per night (US$120)– increased 32 percent over the past two years.
That is a far bigger increase than seen at the top of the market. The number of upscale rooms – averaging S$260 a night (US$183) rose 8.25 percent, while luxury rooms – averaging S$446 (US$314) – increased 1.8 percent.
The trend continues. For 2017, mid-tier hotels are set to account for the highest proportion of new supply at 34 percent, research from brokerage DBS shows.
“It has to be about going for the middle class,” said Beh Swan Gin, chairman of the Economic Development Board, the lead government agency for economic strategies.
Park Hotel Group is among those moving down the value chain, with its mid-scale brand, Destination, debuting in Singapore in the second-quarter. Marriott International Inc’s mid-scale Four Points by Sheraton hotel opened last year. Yotel, a London-based operator specialising in small rooms, opens its first flagship Asian property in Singapore this year.
In far less well off parts of the region, hoteliers have been moving up the value chain, upgrading facilities to tap into the same burgeoning middle class segment of the travel market.
Visitor arrivals rose eight percent in the first 11 months of 2016 to roughly 15 million.
Spending by tourists was up 12 percent to reach S$12 billion (US$8.44 billion) until June-end even as room rates fell 3.2 percent on average.
Chinese visitors were up 36 percent in the first 11 months of the year, while arrivals from India rose 8.2 percent, trumping other source countries.
Many come from so-called second-tier cities such as Zhengzhou and Jinan in China and Jaipur in India.
Adapting to this, mid-scale Hotel Jen, launched by high-end focused Shangri-La group 2-1/2 years ago, now rents GoPro cameras to guests for free, offers a single price for unlimited items in the laundry bag and hands out age-based discounts — which works well with Chinese who travel in big groups.
Shangri-La finished renovating an older property for S$45 million (US$31 million) last year to open a second Hotel Jen in Singapore.
Tan Shin Hui, executive director of Park Hotel Group, says she targeted the Chinese market by opening up sales offices there and partnering with local travel agents. Its offerings, from breakfast to communication materials, also aim to suit Chinese customers.
Ascott Residence Trust says business travelers’ length of stay at its service apartments has virtually halved to one to three months.
Its CEO Ronald Tay says before reducing room sizes, which is a longer-term strategy, he will spruce up common areas with foosball tables and other facilities.
“A lot of business travelers are trending down, which is not surprising given that a lot of them are not even able to travel anymore, and when they travel they tend to cut back on expenses,” said Oliver Chong, an executive director at the Singapore Tourism Board.
“So from luxury they are moving to mid-tier.” – Reuters
The post More Singapore hotels swapping opulence for mediocrity appeared first on Travel Wire Asia.
Source: travelwireasia.com