F1 Hotels Still Have Lots Of Room

Source : The Straits Times, June 20, 2008

Trackside hotels: Only one out of 11 checked is fully booked

Non-trackside hotels: Some are less than half-full for race period

Rates lowered: Expect to pay about $200 to $500 less

SINGAPORE plays host to the first Formula One Grand Prix night race in just three months, but hotel rooms are not filling up as quickly as expected.

Yesterday, a Straits Times check with 11 hotels alongside the downtown track showed just one, the 507-room Conrad Centennial Singapore, already booked up.

A survey of 10 other non-trackside hotels showed that there are plenty of rooms still available, with some major establishments less than half-full for days around the Sept 26-28 race.

Hotels were banking on big profits during the Grand Prix, which is expected to draw up to 100,000 visitors and add from $100 million to $150 million to tourism coffers.

An industry player, who declined to be named, said that the latest reservation numbers are a let-down.

'The big demand surge that hoteliers expected never quite materialised,' said the player.

To deal with the weak demand, hotels appear to be dropping their prices. The Straits Times understands that average room rates have fallen from over $1,500 a night to around $1,300 for trackside hotels.

For others, the range has moved from between $550 and $1,500 to between $350 and $1,000.

One chain, which declined to be named, said that rates have been lowered by 30 to 35 per cent.

Meanwhile, some hotels are adding perks, like a free breakfast, to attract guests. Royal Plaza on Scotts, which is about 45 per cent full, is throwing in free shuttle services to the race site as part of its $960-a-night package.

Others have lowered the minimum number of nights guests have to stay.

'People are being more flexible and realistic. They are looking at the demand and supply issue,' said Grand Mercure Roxy's general manager Kevin Bossino.

Previously, expectations were high. But now, faced with empty rooms to fill, hotels may adopt other strategies, he said.

Those in the tourism trade pin the blame for the relatively low take-up on the high hotel room rates. In turn, hoteliers finger the levy imposed by the Government as the reason behind their prices.

Trackside hotels have to pay 30 per cent tax on their room revenue for the five nights surrounding the race and non-trackside hotels will have to fork out 20 per cent.

However, a report on other F1 host cities suggests that there is no need to be overly concerned about the slow take-up rate.

Last September, hotel revenue management consultancy Integrated Decisions & Systems International released a study of Grand Prix weekends in Shanghai, Kuala Lumpur and Melbourne. It showed that bookings can come in as late as 30 days before guests arrive.

Its director of services, Mr Klaus Kohlmayr, said that Singapore hotels have nothing to worry about yet.

Still, many are far from reassured. Hoteliers are worried that there will be a replay of 2006's International Monetary Fund and World Bank meetings where over a third of the 11,000 rooms reserved for overseas delegates were unsold.

A hotelier who declined to be named gloomily predicted: 'I think there will be a repeat.'