Hotels to be charged room levy for five days during F1 week
AS they gear up to cash in on the thousands of expected visitors for Singapore's first Formula One (F1) race next year, at least 11 hotels located around the proposed street circuit be charged for that lucrative privilege.
As was earlier reported, such hotels will have to pay a room levy of 30 per cent — but in addition, it was confirmed yesterday that all other tourist hotels will be taxed 20 per cent, for the five nights leading up to and including the race day on
The rates, announced by the Ministry of Trade and Industry (MTI), were finalised after the Government had consulted the Singapore Hotel Association.
The list of trackside hotels, however, could change depending on the final circuit design, which is still awaiting approval from the Federation Internationale De L'Automobile.
Back in May, Minister of State (Trade and Industry) S Iswaran had announced that the F1 tax would help defray the cost of staging the event, which could be as much as $150 million.
The race is expected to boost Government coffers by an average of between $15 million and $20 million a year, and boost tourism spending by about $100 million a year.
In setting the F1 levy rates, the MTI said it was mindful that hotels should retain a significant share of the increased revenue.
As to why "trackside" hotels should "contribute more" to the staging of the race, the MTI said: "Some hotels are likely to benefit more from the event than others due to their proximity to the circuit or because their rooms have a good view of the track."
It was common for hotels in F1 host cities to "be near full occupancy" and to raise room rates by as much as two to three times during the race period, the MTI added.
Many hotels here, however, have yet to finalise their room rates, even with the race date and levies have been confirmed. Some are waiting to see if the green light will be given to stage Singapore's race at night.
"The night or day race concept will factor into the viewing demand. We're conducting global market research regarding the acceptable hotel room rates in significant F1 cities. Our final rates will be in line with these practices," said Pan Pacific's public relations manager Cheryl Ng.
Some hotels outside the circuit were unfazed by news of the 20 per cent levy, saying more demand for rooms would help offset it.
"As soon as news of the F1 race broke, we had many enquiries for rooms from both local and overseas guests. We expect to have a healthy occupancy next September," said Sheraton Towers' assistant director (marketing communications) Ernawati Setijo. Already, average hotel room occupancy across Singapore hovered at 86 per cent between April and June this year, despite all-time high average room rates.
Four trackside hotels Today contacted said that while enquiries had been streaming in already, they were not confirming bookings for the race period yet. But they have blocked out rooms to cater to demand.
Trackside hotels could also introduce a "minimum stay requirement" of up to five nights. This practice is common in Monaco, one of the F1's two street races, where there is a three- to four-night minimum stay for hotels that have a good view of the action.
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