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Attractions provide boost to Singapore hotel sector growth

Singapore's hotel sector looked set to continue its spectacular rebound as room rates and visitor numbers hit record levels and the city-state unveiled numerous sparkling attractions, specialists said.

The inaugural Singapore Airshow, which bills itself as Asia's largest aerospace and defense event, will start the year off with thousands of foreign visitors expected next month.

About the same time the Singapore Flyer, the largest observation wheel in the world, will open.

Events will peak in September when Singapore's first Formula One Grand Prix races through the city's famously pristine streets.

Even before the new attractions Singapore's tourist arrivals hit fresh peaks, with record high visitor numbers every month last year, said Quek Swee kuan, the Singapore Tourism Board's (STB) deputy chief executive for international operations.

"Similarly, the hotel sector has had an exceptional year, with hotel occupancy and room rates at an all-time high," Quek said.

Latest STB figures showed 837,000 visitors in November, the largest number ever for that month, while average hotel room rates set a new milestone of S$226 (US$158) a night, up almost 30 percent over the previous year.

The average occupancy rate in November was 88 percent, meaning rooms were virtually filled every night, analysts said.

Some observers have said that the higher room rates should not deter visitors as accommodation at a local four or five-star hotel is still cheaper than elsewhere in the region.

Visitors to Hong Kong or Tokyo can expect to pay on average US$70 more at an upmarket hotel, said Chee Hok yean, executive vice-president of property consultancy Jones Lang LaSalle Hotels.

"Looking at the region, Singapore rates are not that high compared to Hong Kong, Shanghai and Tokyo," Chee said. "It's still relatively affordable compared to some of the other markets."

The experience of other Asian cities and even New York has shown that, as long as there are attractions to draw tourists, visitors will come even if room rates are high, she said.

But Jane Chang, a marketing communications executive with Chan Brothers Travel agency, said finding rooms at competitive rates for leisure travellers has become increasingly difficult.

"This is especially so as despite the increase in rates, booking volume remains high as demand from the corporate travel sector continues to grow," she said.

The STB says arrivals will not be affected.

It says the government is working to address the need for more rooms with the release of 14 sites for hotel developments since August 2006. These new hotels are expected to add another 4,800 rooms, the STB said.

The St. Regis luxury hotel chain opened its doors last month and general manager Yngvar Stray said there is demand for high-end accommodation as the city-state goes after big-spending tourists.

"I would actually say there is a substantial need for this in Singapore," Stray said.
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