Suburban hotels can appeal to corporates, budget travellers: Analysts

Genting Hotel Jurong is the latest among hotels that are sprouting up away from the city centre. While they are situated away from the tourist belt, analysts have said that these suburban hotels could appeal to a certain market segment, and build up their own clientele.

Genting Hotel Jurong plans to open in phases, starting from Apr 30 until end-May. The 15-storey hotel at Jurong East has 557 rooms, with rates ranging from S$380 to S$800 a night.

It hopes to tap growth opportunities at the Jurong Lake District, while at the same time, serve as an extension for Resorts World Sentosa, with a shuttle service to the integrated resort.

Mr Chow Keng Hai, vice president of rooms at Resorts World Sentosa, said: “The 24-hour shuttle service is one of the key initiatives we will put in place that will make sure our guests in this hotel will be able to get to where they want to in the resort to enjoy the attractions.”

Although Genting Hotel Jurong is located away from the main tourist hotspots and Central Business District, hospitality analysts said it can attract certain groups of travellers. These groups include corporate visitors to surrounding business parks and leisure travellers from Malaysia.

The hotel is one of several being set up outside the core central region. Park Hotel Alexandra will be opening next month, near Queensway Shopping Centre. Last year, One Farrer Hotel & Spa opened near Farrer Park, while Parc Sovereign Hotel and Aqueen Jalan Besar Hotel were set up in the Jalan Besar area.

Said Mr Mervin Song, vice president of equity research at DBS Bank: “We will see probably two types of guests frequenting these hotels. The first one would probably be the more budget conscious travellers looking for lower price hotels, happy to pay slightly lower rates offset by a longer distance to the tourist attractions.

“The second one would probably be corporates who want to visit a nearby business park, for example, Park Hotel near the Alexandra Business Park area.”

Industry watchers said these hotels can help ease pressure on hotels in prime locations which are seeing high levels of occupancy.

However, with supply expected to increase by about 4.5 per cent each year for the next three years, analysts warn of a slight softening in the market. Still, they said that these hotels can help support the overall tourism sector.

Mr Robert McIntosh, executive director for Asia Pacific at CBRE Hotels, CBRE, said: “If you have properties that are out of town, you can attract a different type of clientele, which adds to the base of the type of demand we get in Singapore, and that variety can help strengthen tourism as a whole.”

According to hotel statistics from the Singapore Tourism Board, standard average occupancy rates for the luxury and upscale segments were above 87 per cent in 2014.

Source : Channel NewsAsia – 22 Apr 2015

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