Thursday, August 21, 2008

Slowdown prompts hotels to drop rates

ECONOMIC woes and tightened purse strings are finally causing some hotels in the four- and five-star categories to drop rates from now till December in the hope of raising occupancy. Hotels not offering discounted rates are throwing in value-adds to draw business.

From January to June 2008, Singapore Tourism Board (STB) reported that visitor arrivals and average room rate rose 2.9 per cent and 29.6 per cent respectively, as compared to the same period in 2007, while visitor receipts and average occupancy rate dipped 0.2 per cent and 3.4 per cent respectively.

Hotel Rendezvous general manager, Mr Kellvin Ong, said: "We are already seeing a slowdown in corporate travellers as companies curtailed their travelling patterns and expenditure. Many hotels like us are similarly impacted. We are also seeing some hotels dropping rates to get business."

An industry source said: "August is especially bad for Singapore. Any hotelier who says that business is great for the rest of this year is lying."

Pacific Arena reported that four- and five-star hotels had slashed their rates by at least 10 per cent in July and August, and had offered lower rates as well for September.

However, the dip in room rates will only offer a brief respite for inbound travel agents who have been having a hard time encouraging groups to stay on longer in expensive Singapore. Travel agents expect hotel performance to pick up again in the new year, and overall room rates will rise between five to 10 per cent.

Source : TTG
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