STANDING head and shoulders above the tired facades of an electrical shop and a coffee shop in Dickson Road in Little India is a shiny 29-room hotel, Wanderlust.
Not the only new kid on the block, it faces a brand-new branch of the Hotel 81 chain of budget hotels. Just a few paces away, workers are busy moving in the lobby furniture of a yet-to-be-named 90-room hotel.
These are among at least nine medium-budget to high-end hotels that have sprung up or been revamped in Little India over the last two years, catering to guests ranging from families looking for an affordable $100-a-night stay to trendy travellers willing to shell out as much as $650 a night, the price tag on Wanderlust’s top-end suite.
Their appearance marks the next stage in the evolution of Little India’s lodging landscape.
The area has been known more as a backpackers’ haven, especially along Dunlop Street and Jalan Besar. Many of these hostels charge around $20 a night for a bunk bed. Facilities are spartan; bathrooms are shared.
But the offerings have started going upmarket to cater to growing demand from other types of tourists, such as families and business visitors.
Mr Terrance Tay, director of Mutual Holdings, which owns the 14-year-old Mayo Inn, saw the shift and splurged $1.6 million on a revamp last year to turn the hotel from a place frequented by ‘undesirables’ – his euphemism for prostitutes and their clients – into a designer hotel.
He said: ‘We would like a cleaner image, and visitors who can pay more.’
Even the backpackers’ hostels, still growing in number, are getting swankier.
Last year, boutique hostel Checkers Inn opened in Campbell Lane, with dormitory beds going for about $30 a night, and chic, tasteful surroundings for its guests.
Tourists are loving the wider choice; the new hotels are clocking in occupancy rates of 70 per cent to 80 per cent.
Mr Chris Kerrigan, 31, an American photographer based in Jakarta, used to stay in five-star chain hotels whenever he came to Singapore. This time, he picked Mayo Inn, where he paid about $90 a night for a three-night stay.
‘I wanted some place comfortable and not too expensive. This area has interesting food and it’s close to other places like downtown,’ he said.
On the one hand, the swelling number of hotels and hostels is fuelling the area’s economy; on the other, property values have shot up, raising rentals and keeping out those looking to buy places in the neighbourhood.
Signs of a mini-boom time are here: Shops and restaurants say they are getting patrons, including tourists, who spend more than backpackers.
New businesses such as bars and spas have popped up, and they are thriving. Ms Janice Tan, for instance, who owns the two-year-old Spanish-themed Zsofi Tapas Bar, is expanding her outlet as her revenue doubles in the second year from the first year.
She said: ‘We’re seeing more tourists who can pay up to $100 for drinks and food. Most backpackers are on a budget and pay around $25 a person.’
Real estate agency ECG Property noted that the buzz has sent property values up by as much as 27 per cent in the last 18 months.
Little India Shopkeepers and Heritage Association chairman Rajakumar Chandra said: ‘Once there’s increased vibrancy, a lot of investors get interested.’
He estimates that the rental on a three-storey, 2,400 sq ft shophouse is now in the region of $7,000 to $12,000 a month.
This may sound reasonable compared with rates elsewhere in the downtown area, but in Little India, it represents a 40 per cent spike over the rates six years ago.
Thus, although businesses are getting more customers who are willing to spend, their bottom lines are also being eaten into by higher rentals and staff and operational costs.
Mr K.N. Raja of the Madras New Woodlands Restaurant, for example, has forked out 10 per cent more in rent over the last two years, so his profits have gone up only minimally.
But he does not mind this.
After all, every little bit counts in Little India, an area notorious for cut-throat competition and a high turnover in all kinds of businesses, from jewellers to restaurants.
He said: ‘There are so many competitors out there. At least we’re not losing money and we’re surviving.’
Source : Straits Times – 7 Aug 2010