SINGAPORE – New and buzzy brand-name hotels are sprouting like mushrooms in and around Orchard Road in a sign of a strong tourism recovery, say hoteliers, experts and business associations.
Despite recent slowing visitor arrivals to the Republic, the experts believe the increase in supply of hotels and hotel rooms will be met with a proportionate increase in demand from travellers in the future.
November alone saw two new-to-market brands opening in Cuscaden Road – the 204-room Singapore Edition and the 142-room Artyzen Singapore, located opposite each other. And the first Singapore outpost of international boutique hotel brand The Standard is set to open in 2024, just a stone’s throw away in Orange Grove Road.
Several stalwarts in Singapore’s much-lauded shopping and lifestyle belt are also undergoing extensive multimillion-dollar renovations, priming to reopen with brand-new rooms, restaurants and facilities embracing Singapore’s larger Green Plan 2030.
Conrad Singapore Orchard in Cuscaden Road – the former Regent Singapore – will open its 445 refurbished rooms to guests from Dec 28, while Grand Hyatt Singapore in Scotts Road is on track to reopen in phases from the second quarter of 2024.
From Tanglin to Dhoby Ghaut, Orchard Road has seen a rapid roll-out of at least 10 hotel projects since 2021, with post-Covid-19 recovery playing a large part in this boom.
“The Covid-19 pandemic… created downtime for hotels to refurbish and rebrand, contributing to the bumper batch of new openings and reopenings,” said Ms Tan Yen Nee, Singapore Tourism Board’s (STB) executive director for hospitality.
“The opening of several new hotels, such as Pan Pacific Orchard, Mondrian Singapore Duxton and Pullman Singapore Hill Street, is a testament to the private sector’s confidence in Singapore’s tourism prospects.”
Mr Benjamin Cassim, senior lecturer for the diploma in hospitality and tourism management course at Temasek Polytechnic, noted that major hotel groups pushed through global expansion plans from 2020 to 2022.
This was focused on Asia-Pacific countries, “with the expectation of an upsurge in tourism once the Covid-19 pandemic was resolved”.
Mr Cassim said: “Singapore, as a major visitor destination, has been a strong beneficiary of this expansion. For example, voco Orchard Singapore is part of IHG Hotels & Resorts; Pullman Singapore comes under Accor group; The Singapore Edition is a Marriott International brand; and Conrad Singapore Orchard is a Hilton brand.”
Business associations like the Singapore Hotel Association are bullish about this rapid growth.
“Not only will these new brands and rejuvenated hotels provide a greater diversity (of options), but they also reinforce Singapore’s appeal as a world-class travel destination,” said Mr Kenneth Li, president of the association, which represents 160 member hotels.
“The recovery narrative has been positive so far, with a healthy pipeline of Mice (meetings, incentives, conventions and exhibitions), world-class concerts and events in Singapore, which puts hotels in good stead to welcome more international visitors in the year ahead.”
Strong recovery despite slowing visitor numbers
Hoteliers and experts are confident of strong demand being sustained, despite visitor arrival numbers plateauing in recent months.
The Republic’s international visitor arrivals slipped month on month, for the third consecutive month, to 1,125,948 in October, based on data released by the STB.
As at Oct 31, Singapore had recorded some 11.3 million visitor arrivals of the targeted 12 million to 14 million set out by the STB at the start of the year.
Over 2023, the hotel industry has posted a healthy recovery, with an average occupancy rate of 81 per cent from January to September, compared with 87 per cent for the same pre-Covid-19 period in 2019.
Hotels’ average room rates also surged sharply in September during the Formula One Singapore Grand Prix and its surrounding events to a record $325.24, surpassing the previous year-to-date peak of $292.46 in July.
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“Higher occupancy rates and the strong growth in average room rates is being driven by strong demand, and this indicates that there is room for supply-side growth,” said Mr Paul Kent, partner for advisory at KPMG in Singapore.
“The surge in hotel activities around the Orchard Road area, including new establishments and major refurbishments, signifies the sustained confidence of hoteliers and retailers in the Singapore market.”
Hoteliers like Mr Oscar Postma, cluster operations general manager for Conrad Singapore Orchard and Conrad Centennial Singapore, mirrored this sentiment. Conrad Singapore Orchard will be the next to reopen, in late December.
Mr Postma said the new openings, and especially new hotel brands coming into the market, will make Singapore more competitive globally, and thus an attractive choice for travellers.
“When Marina Bay Sands first opened, and Resorts World Sentosa opened at around the same time (in 2010), everybody was terrified about how that was going to impact the occupancies (of hotels in other parts of Singapore)… But on the contrary, you saw completely new customers coming into the market, and everybody immediately benefited.”
He added that the slew of new hotels in and near Orchard Road will “cement this part of town as a lifestyle space in Singapore, and provide much stronger competition to the hotels in the CBD (Central Business District) and Marina Bay area”.
Oversupply not a concern, but staffing challenges remain
Singapore’s hotel capacity is set to grow further in the coming years.
Seven new hotels are expected to be completed in 2024, and another nine in 2025, said Trade and Industry Minister Gan Kim Yong. This will add approximately 3,300 new rooms over the next two years, a 4.6 per cent increase in total hotel room stock as at Nov 15.
Mr Gan, in a written parliamentary reply on Nov 22, was responding to Sengkang GRC MP He Ting Ru, who had asked how many new hotel rooms are expected to come onstream, and the expected impact on tourism receipts.
Mr Gan said the new hotels – which include a mix of economy and luxury projects – will provide more options for visitors, and the extent of increase in tourism receipts will depend on actual market conditions.
Experts agree that the growth has not reached a stage where there is a glut of hotels and rooms.
“Oversupply of hotels is not a concern,” said Associate Professor Lau Kong Cheen from the Singapore University of Social Sciences’ business school.
He noted that the numbers of visitors from the top sources of tourists to Singapore – China and Indonesia – are at about 35 per cent and 75 per cent of pre-Covid-19 levels, respectively.
“Thus, there is still potential for more tourists to arrive from these countries, as well as the rest of the world,” he said.
But this supply boom is not without its challenges.
“The one major challenge for the hotels, given the new openings and revamps that have taken place over the past two to four years, is staffing,” said Mr Cassim. “It remains a key issue for hotels in Singapore – not being able to find suitable people to fill positions… So the concern ends up not being about having too many hotel rooms, but rather not having enough personnel to staff the hotels.”
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Hotels will help complete Orchard Road ecosystem
Experts like Mr Kent said the appeal of Orchard Road lies in it “being a pivotal component of Singapore’s tourist portfolio mix” and being strategically positioned as a lifestyle destination for visitors.
“These hotels play a crucial role in supporting Orchard Road’s multifaceted identity, functioning not only as a dynamic shopping hub but also as a hub for offices, healthcare facilities and luxury residences,” he said.
Prof Lau noted that there has been a concerted move in recent years to make the precinct more vibrant and add more buzz.
For instance, action sports venue Trifecta, where visitors can snowboard, skate and surf, opened on Oct 28, and children’s indoor playground SkyPark By Kiztopia @ Cineleisure opened on Nov 24. Both venues are in Somerset.
With brands expanding their footprints here, the Orchard Road precinct is also now home to the largest Muji flagship store in South-east Asia, at Plaza Singapura, and the first Singapore store from Swedish fashion brand Marimekko, at Ion Orchard.
“Adding more hotels to the belt will help complete the ecosystem that will elevate the Orchard Road experience in the post Covid-19 era,” said Prof Lau.
Professor of marketing Kapil Tuli, from Singapore Management University’s Lee Kong Chian School of Business, said much of the appeal of Orchard Road is its connectivity – retail, food and beverage, and attractions are all within walking distance, or easily reached by public transport. “As a hotelier, I would want to be in a location that captures both the business and tourist audience, and Orchard gives you both,” said Prof Tuli.
Ms Guo Teyi, STB’s director of retail and dining, said: “The spate of new hotels targets different visitor profiles, and thus, it is critical to have stakeholders offer fun, authentic and differentiated lifestyle and retail experiences to cater to varied visitor interests beyond retail on Orchard Road.
“This will ensure Orchard Road remains relevant in the hyper-competitive global tourism market.”
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