Hoteliers say more investment in hotels is needed if targets set by the Singapore Tourism Board in its 10-year masterplan are to be achieved. sze toh yuin munn asks the trade how many is enough.

The Singapore Tourism Board (STB) has set a target of 17 million visitors by 2015 but hoteliers say there are not enough rooms now.

Positive economic conditions and the consistency of corporate traffic to Singapore have contributed to hoteliers turning in a healthy report card last year with occupancy averaging 80 per cent.

Growth has been led by business-related travel. In 2004, the Lion City welcomed an estimated two million business travellers, accounting for 26 per cent of the 8.3 million total visitor arrivals. The figure represents about 30 per cent increase over pre-SARS 2002.

Millennium & Copthorne Hotels senior vice-president for global sales and marketing, Mr Gerry Oh, said: "Over the next few years, Singapore may well see a shortage of hotel rooms if growth in visitor arrivals continues at this pace."

Hotel Phoenix Singapore general manager, Mr Noel Hawkes, added: "In order to hit the STB target, it would probably mean increasing the existing 36,000 or so hotel rooms by at least 50 to 75 per cent, but a lot also depends on how we can extend the length of stay of our guests.

"However, this increase should be carried out gradually in stages to safeguard against an oversupply of rooms."

Singapore Marriott Hotel director of sales, Ms Julie Yeong, said: "The ideal growth should be 20 per cent per year until 2015."

World Express managing director, Mr Tan Chee Chye, said: "We need to attract investors to build more relevant hotels and study what is needed to achieve the results."

Several new properties, including St Regis and Amara Boutique Hotel, are scheduled to open over the next few years.

Local inbound operator, Tour East Singapore group vice-president, sales & marketing, Ms Judy Lum, said: "The timing could not be better with the strong rebound and a return of the overbooking situation at established hotels."

Mr Hawkes said: "The new additions will provide a wider variety of choices and attractions for the well-heeled international traveller."

But Mr Oh said developers were still careful about building more properties. "The problem hoteliers here face is the issue of our relatively lower rates vis-a-vis in cities such as Hong Kong. Even when compared with Bangkok, Singapore's average room rate climb is trailing behind," he said.

And that could be debilitating if the STB's 10-year target is reached. However, confidence in the positive outlook for 2005 will see many hotels increasing their rates for the next winter season with industry players agreeing now is the opportune time to increase bottomlines.

Since 2004, the overall boom in the tourism industry has led to hotels enjoying a higher revenue with the total hotel room revenue estimated at S$1 billion (US$614 million) last year. Average room rates also increased, posting a 4.9 per cent rise over 2003 to S$121, although the figures are still 3.8 per cent lower compared to pre-SARS 2002.

Grand Hyatt Singapore former area director of marketing, Ms Jennifer Cronin, said: "Singapore has allowed itself to be driven into such a competitive rate situation. It is now time to regain the rate parity on value-for-money for Singapore."

According to Amara Singapore general manager, Mr Colin Clarke, hotel rates could see a 10 to 12 per cent increase by the end of 2005, although not immediately.

"The expected occupancy this year looks healthy. As an industry, we should be looking at making a move to increase the rates."

Ms Cronin added: "2005 will only be the beginning to reinforce Singapore's leading position in the region. We must ensure hotel management companies and owners have an adequate return on investment so longterm growth for the industry can be assured."