SINGAPORE: The crunch for hotel rooms looks set to ease in Singapore, thanks to the launch of Zhongshan Park on Monday.
The new integrated development in Balestier includes an office tower, a shopping mall and two hotels.
Although the new supply of hotel rooms may put some downward pressure on room rates, eventually weighing down on revenue per average room (RevPAR), it is not making hotel operators lose any sleep.
Mainboard-listed Hiap Hoe, owner of Zhongshan Park integrated development, said the 190,000-square-foot development has seen strong occupancies for its hotels, retail mall and office tower.
Hiap Hoe Office Tower is now fully leased while Zhongshan Mall is over 90 per cent leased and continues to see a strong flow of shopper traffic.
The two hotels — Ramada Singapore and Days Hotel — have continued to record steady occupancies.
The four-star Ramada Singapore Hotel and three-star Days Hotel have added 789 rooms in the area.
That is nearly one third of available hotel rooms in the Toa Payoh and Novena area, which is near private medical centres as well as Tan Tock Seng Hospital.
Property consultancy CBRE said there are 2,773 rooms in the Toa Payoh and Novena area.
But it is not just medical tourism that has helped boost business for the two hotels.
Being near the Toa Payoh sports stadium, the two hotels at the Zhongshan integrated development have also benefited from Singapore’s plan to boost sports tourism, working with the Singapore Sports Council and Singapore Sports School to bring in training groups from overseas for sporting events.
But the hotel operator expects earnings from room rates to see some downward pressure due to oversupply. This is measured by RevPAR, or the performance metric in the hotel industry.
CBRE said 15 hotels with 3,629 rooms will make their way into the market by end-2013.
Still, market experts remain upbeat on Singapore’s hotel sector.
They said the city state’s push to be the centre for the MICE (meetings, incentives, conferences and exhibitions) industry will likely keep local hotels well occupied.
CBRE also noted high occupancy rates in Singapore have allowed new hotels to take just one year, instead of three years, to establish a customer base.
Hotel room crunch looks set to ease with Zhongshan Park launch
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