Only 3 out of 15 hotels report full occupancy during Grand Prix stretch
AS SINGAPORE hoteliers gear up for the nation’s first ever Formula 1 night race later this week, the initial euphoria about a potentially huge tourist windfall has given way to more realistic expectations.
Of the management teams at 15 hotels Today spoke to, only three — The Fullerton, Ritz Carlton and St Regis — report full occupancy for the Grand Prix weekend on Sept 26 to 28, but the rest have an average occupancy rate of 80 to 90 per cent.
Most of these hotels are up-market five-star lodgings, with nine of them “trackside” hotels located alongside the Grand Prix race circuit.
At least one hotel — Meritus Mandarin — expressed disappointment with the results.
Its director of marketing communications, Ms Lim Ee Jin, said bookings have not been “overwhelmingly high” as initially predicted.
Mr Jason Pereira, a senior associate at leisure sector consultancy Globalysis, said: “Given the current global credit crunch and economic uncertainty a year later, it is reasonable to expect a lower turnout than was anticipated previously as consumers globally hold back on spending.”
There have also been reports of hotels — from mid-range ones like York Hotel to five-star ones like Pan Pacific Singapore — slashing their rates, some by as much as 60 per cent, to boost demand and fill up rooms.
Others like The Royal Plaza on Scotts said it has removed the requirement for a minimum number of nights of stay, and is providing extras such as a free shuttle service from the hotel to the race circuit.
Still, industry experts said this is a good showing given the deteriorating economic mood in Singapore and other countries in the region. Some hotels — such as Fairmont Singapore and Marina Mandarin — said orders are still coming in and they expect rooms to be filled come race weekend.
Ms Chee Hok Yean, executive vice-president of Jones Lang LaSalle Hotels, thinks some hotels will hold rates steady and will be prepared not to hit full occupancy. “For them, it is a question of ‘what yield can I get out of it?’,” said Ms Chee.
“If I can get a high room rate at 90 per cent compared to a lower room rate at 100 per cent, I’ll choose lower occupancy but at a higher rate because it is a strain on resources with no time for maintenance if every room is occupied.”
Ms Chee also noted that hotels lowering rates for the hyped-up period does not necessarily mean the hotel industry in Singapore is heading for a slump.
“Are they slashing from three times the normal rate that they would charge? They are probably slashing from that (initially) expected rate, which is still higher than, say, their average room rate for the year,” she said.
Ultimately, this is the first F1 event for Singapore, so hotels probably took some time to establish their rate structures for the period, said Mr Pereira.
While he said that hotels here have taken a cue on room rates from Monaco and Melbourne — two other cities which host F1 races — the best lessons they can learn is through studying the dynamics at play in this year’s event.
“Then, they can take action to better capitalise on the event in future years,” he said.
Source : Business Times – 23 Sep 2008
