Govt To Check Hotel Conversions Islandwide

Source : The Straits Times, Jan 15, 2008

THE Government has made a key policy change regarding land set aside for hotels at a time of heightened concern over the supply of rooms during the tourism boom.

It has discontinued the hotel safeguarding policy, so developers with land designated for hotels may find it harder to convert the site for other uses, such as apartments.

Applications will now be considered based on the need to ensure sufficient hotel facilities and must be in line with the Master Plan, a broad blueprint outlining Singapore's development. The plan is up for review this year.

The new guidelines represent a key shift from the existing policy. Hotel safeguarding allowed the Government to stop hotel sites from being converted for other uses but was restricted to core areas like the Orchard Road corridor.

But now hotel sites across the country will be under the spotlight. And all conversion applications will be assessed the same way, said the Singapore Tourism Board and the Urban Redevelopment Authority (URA) yesterday.

Hotel conversion applications will generally not be allowed if the area is zoned for hotel use or needs of a certain level of rooms.

'Instead of just safeguarding the hotels in core areas, they are now effectively safeguarding all hotels - on land with hotel zoning - across Singapore,' said Knight Frank director of research and consultancy Nicholas Mak.

'It gives the Government more flexibility to regulate hotel supply in the future.'

The change reflects how the Singapore market has altered, particularly for hotels. The hotel safeguarding policy was introduced in 1997 to check the trend of hotels being converted to condominiums. The Seaview and ANA hotels were turned into residential sites in recent years.

Having sufficient hotel rooms is critical given the aim to attract 17 million visitors to Singapore and $30 billion in tourism receipts by 2015. The 10-millionth visitor landed on Dec 22 last year and in November the average hotel room rate in Singapore reached a record $226.

Demand for hotels within key tourist districts such as Orchard Road and Singapore River is high, but these areas are already largely built up.

The URA said: 'Hence, the loss of hotels within the key tourist districts is irreversible and even the conversion of just a few of the existing hotels within the key tourist districts would significantly impact the critical mass of hotel rooms within these areas.'

Last year, a few hotels opened, bringing the total number to 227. Typically, it takes about three years to build one. If an existing hotel is converted to other uses, it will take that long for a new one to replace it.

'Such lead time can affect the available room supply to meet the growing demand as well as the landscape and the attractiveness of the district as a whole,' said the URA.