Singapore hotels navigating business effects of virus
Singapore hotels navigating business effects of virus
01 APRIL 2020 8:09 AM

Singapore is an international destination that still depends on visitors from China and neighbor Malaysia—business which has taken a hit due to the pandemic—but hoteliers there remain positive, in part buoyed by staycation guests.

SINGAPORE—As one of the first countries to be hit by the coronavirus (COVID-19) outbreak, Singapore also has been among the first markets to report a sharp downturn in occupancy.

Initial impact on visitor arrivals from China, which accounts for approximately 20% of annual international visitor arrivals, was significant.

Since then, the Singapore Tourism Board has revised arrival forecasts down due to lower travel demand by approximately 25% to 30%.

The decline will be significant, as 2019 marked the fourth-consecutive year for a rise in visitor arrivals and tourism receipts in Singapore. Total visitation for 2019 was 19.1 million (year-over-year +3.3%), while tourism receipts registered $27.1 billion Singapore dollars ($19.05 billion), a rise of 0.5%.

According to data from STR, the parent company of Hotel News Now, Singapore hotel occupancy dropped 46.9% to 46.4% in February and revenue per available room fell 47% to 127.40 Singaporean dollars ($89.55).

In the same period, average daily rate dropped, but only slightly, by 0.1% to SGD$274.82 ($193.18).

With six hotels in Singapore, Park Hotel Group reported a promising start to 2020 with January’s occupancy “outpacing that of last year,” said Tan Shin Hui, the hotel firm’s executive director, but since February, occupancy has taken a drastic hit.

Park Hotel Group is now undergoing various cost-saving measures, including “reducing outsourced services, cross deployment and training of team members, encouraging team members to clear outstanding leave and actively tapping on the various support measures by the Singapore government,” she said. “To save energy and manpower, we have also shut unoccupied floors.”

Staycations, post-isolations
Sources said it is not all gloom and doom for the hospitality industry, with hotels capitalizing on revenue-making opportunities that were fortuitously presented by various travel advisories.

Led by Prime Minister Lee Hsien Loong, Singapore’s government had encouraged staycations for families during the week-long school holidays ending 22 March, while the Singapore Hotel Association banded its member hotels together to offer attractive staycation packages.

“Our hotels are very well located, with amazing pools, so they have always been very popular for staycations. This March holidays, we upsized the offering and included complimentary guided activities for children and meals where kids dine free, over and above extremely attractive rates,” Tan said.

“For bigger families, we’ve specially created a bundle of two rooms for the price of one. Our thematic family suites and Jacuzzi suites at Grand Park City Hall have proven to be very popular with families. While staycations in March have increased year on year, average hotel occupancy is still very low due to the lack of international travelers,” she added.

Hotels also are offering preferential rates for Singapore residents returning from abroad who may be required to serve out a 14-day stay-home order issued by the Singapore Global Network. That recommendation of isolation became a legal obligation as of 21 March.

“We are currently working with the SGN to extend affordable rates to all returning residents who will be serving the 14-day notice. To make their stay as comfortable as possible, we have curated special meal packages and laundry services, as well as a personal shopping-request service for any of their necessities,” Tan said.

Close neighbors
Another problem, and an opportunity, has come from Malaysia, Singapore’s closest neighbor and former ruler.

As a result of the recent Movement Control Order issued by Malaysia that forbids citizens from leaving the country, thousands of Malaysian citizens and workers remain in Singapore.

The Singapore government and employers have found accommodation for these workers, with some hotels offering preferential rates. It is estimated that some 300,000 Malaysians work in Singapore with approximately 50% commuting daily from their homes in Malaysia.

“To help support the Malaysians who chose to stay in Singapore, we offered a really affordable package for this period and had every department pitch in to quickly turn around rooms so that we could accommodate as many people as possible at such short notice,” Tan said.

“Across our six hotels in Singapore, we managed to accommodate over 400 Malaysians.”

Recovery actions
Notwithstanding the current situation, plans are still in the pipeline for a strong recovery following four years of consecutive growth, according to Keith Tan, CEO of the Singapore Tourism Board.

“Singapore’s tourism sector is facing its biggest challenge since SARS in 2003. But unlike SARS, we are now better prepared and more resilient. Our destination remains attractive, we have a strong pipeline of tourism products, and our market portfolio is diverse,” he said.

“The growth that we have enjoyed over the past four years reflects our strong tourism fundamentals,” Tan said, adding that plans are underway for the formation of The Tourism Recovery Action Task Force, a private-public partnership devised to map out recovery strategies and tourism plans.

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