Service Apartments Seek Shorter Stays To Ease Hotel Room Crunch

Source : The Straits Times, Jan 22, 2008

Industry association proposes rule on stay of 7 nights or more be lifted

FOR 20 years, there has been a little-known rule governing service apartments: Guests have to stay seven nights or more.

ALMOST LIKE HOME: Facilities offered in service apartments, such as this Fraser Suites two-bedroom apartment outfitted with a kitchen to prepare meals, would 'help bridge the gaps for medical and family tourism'. -- BT FILE PHOTO

Now, with an eye on the current hotel room crunch, the Serviced Apartments Association proposes that this condition be lifted.

There are at least 3,500 service apartment units here, compared to more than 37,000 hotel rooms.

If the association gets the go-ahead, this will have an impact on the short-

stay accommodation market. Association president Alfred Ong told The Straits Times it is high time the rule was lifted - a rule he said is unique to Singapore.

He added: 'If Singapore wants to be a first-class city, then it should give customers the choice, whether it be service apartments, hotel rooms or budget accommodation.'

Although the association said it began preliminary discussions with the Singapore Tourism Board (STB) and the Urban Redevelopment Authority (URA) in 2006 and stepped them up last year, the two agencies said they have yet to receive a formal proposal to lift the rule.

Travel industry players said such a move will help ease the room crunch in Singapore where hotels have registered high average occupancy of more than 80 per cent.

This has led to higher room rates, which in turn have led to concerns over Singapore's competitive edge in the mass tourism sweepstakes.

The latest American Express market forecast on hotels in the Asia-Pacific, released last week, predicts that corporate rates in Singapore will go up by some 29 per cent this year.

This is higher than its projections on Hong Kong at 17 per cent, Beijing at 21 per cent and Kuala Lumpur at 20 per cent.

This is despite the 8,850 rooms added last year and this year.

Mr Prashant Aggarwal, head of American Express Consulting for Japan, the Asia-Pacific and Australia, cited increased demand with higher visitor arrivals as part of the reasons driving its projection.

However, Plaza Royal on Scotts hotel general manager Patrick Fiat said the industry should not be too concerned about the rates hike.

He told The Straits Times: 'For the past 10 years, hotel rates have been low. So, the current spike is just hotel rates catching up with rates elsewhere.' He expects levelling out by next year.

However, he is opposed to allowing service apartments to accept shorter stays.

But the service apartment industry sees the proposed move as complementary rather than competitive.

Ms Tonya Khong, general manager of Fraser Suites and Fraser Place, said: 'There may not be much impact on the industry's occupancy if the minimum duration of stay requirement is lifted.

'We foresee that this move can help bridge the gaps for medical and family tourism, as cooking and children-friendly facilities as well as spacious living space will mean a great deal to these visitors.'

Mr Ong said in other Asian cities, most service apartment guests are middle- to long-term guests. Only about 30 per cent are short-stay guests.

But he added that allowing shorter stays will mean more efficient use of service apartments, which always have some spare days between long-term guests.