Most hotels remain positive despite drop in tourist arrivals

By Valarie Tan, Channel NewsAsia

SINGAPORE: Singapore's tourism is hit by the global financial slowdown, but hotels remain positive about year-end sales.

Visitor arrivals fell by 4.1 per cent in September compared to the same period in 2007, and high-end hotels are also seeing a decline in business and leisure travellers.


However, it is not all doom and gloom as the festive season is near. Corporate functions are the norm at most hotels in Singapore during the year-end period. But the recent economic meltdown has put the brakes on some party plans.

General Manager of Fairmont Singapore, Ian Wilson, said: "We've had a couple of cancellations, but we've had other businesses that have moved in to replace them for the most part. People are prudent about how they spend their dollars." Having fewer courses with cheaper wine is just one way some companies are said to be scaling back on their year-end functions. But when it comes to occupancy rates, most hotels are sheltered from the current tough times.

CEO of Tourism Management Institute of Singapore, H P Loi, said: "When I spoke to some of the hoteliers, some of the bookings are done in advance. So for the next three months, I think it will be okay. But it is really after the Chinese New Year, then you begin to see the real picture - 'will groups still be coming to Singapore?'" The Singapore Tourism Board has said that visitor numbers and spending are expected to fall short of targets for 2008. Five-star hotels say they are seeing a five to seven per cent decline in business travellers, due to companies - especially banks - cutting their budgets.

A spokesperson from Accor Hospitality told Channel NewsAsia it expects occupancy rate to go down five per cent to 10 per cent towards year-end and early 2009.

However, the five-star hotels say they are not likely to slash prices, but will instead offer value-for-money packages to attract more tourists.

Industry watchers also expect tourists to make short-haul trips. Despite the gloomy outlook, Singapore saw record growth of visitor numbers during the Formula One Grand Prix in late September.

During the race days, between September 25 to 27, visitor arrivals increased by 30.3 per cent over the same period in 2007.