Four thousand new hotel rooms are expected to be ready by 2013 to alleviate room shortage in Singapore.
To cater to tourists looking to stay away from the city, a growing number of industry players are developing hotels in the heartlands.
Under the Government Land Sales programme, developers have bid for hotel sites in suburban areas such as Balestier, Farrer Park and even further west in Alexandra and Boon Lay.
Construction and property group Chip Eng Seng is investing in its first hotel property in Singapore, located at the junction of Alexandra Road and Jalan Bukit Merah.
Chip Eng Seng Corporation Ltd’s executive chairman, Lim Tiam Seng, said: “Being a listed company, we hope to diversify. We are in the construction, development, hotel and precast yard. We hope to find opportunities in other industries as well.”
The retail mall cum hotel development will cost Chip Eng Seng some S$350 million and the 450-room four-star hotel will be managed by Park Hotel Group.
Park Hotel Group’s chief executive officer, Allen Law, said: “This location is also achieving untapped demand from the west side of the country. We see a lot of tremendous opportunities for us in operating this hotel in Alexandra.”
The hotel is targeted to open in the first half of 2015.
Analysts see the development as direct competition to Park Avenue Rochester which is located near the business hub of One-North.
The four star business hotel, which opened its doors in January this year, has an occupancy rate of 89 per cent in July this year. According to data from HVS Research, this is higher than the industry average of 87 per cent.
NRA Capital’s executive chairman, Kevin Scully, said: “Singapore is too small. So, I think there is no actual distinction. The key thing you should focus on is the target markets in terms of the potential visitors from the business segment, the healthcare segment and the education segment. I think that segment is more insulated in case of any significant cyclical (downturn), which might impact global tourism.”
Singapore received close to six million visitors for the first five months of 2012.
Analysts expect this year’s tourist arrivals to exceed last year’s 13.17 million visitors.
Source : Channel NewsAsia – 15 Aug 2012