Complete Property Market Updates of Singapore

April 30, 2008

Yummy times for F&B and hospitality

Filed under: 1 — Propertymarketupdates @ 3:17 am

SINGAPORE’S F&B and hospitality industries appear to be set for another strong year ahead – despite rising costs and the shaky economic climate in the United States – on the back of strong demand and increased spending from both Singaporeans and foreign visitors.

‘2008 looks set to be a robust year (for the local hospitality industry) with average occupancy rates in excess of 80 per cent and average rate growth forecast at 25 per cent,’ said Cheryl Ng, public relations manager for Pan Pacific Singapore, singling out Singapore’s location and infrastructure as assets that will contribute to long-term growth.

For Pan Pacific, the overall demand for rooms this year has been growing at a steady rate, a trend that mirrors last year’s, Ms Ng said. The MICE industry has contributed substantially to the strong demand.

‘We expect the trend for growth to continue this year and although we expect variations in the costs of operations, we will ensure that our product remains competitive in the market with minimal adjustments to the price,’ she added.

The global hotel industry saw a profitable year in 2007, according to the HotelBenchmark Survey by Deloitte. Regions such as the Asia-Pacific, South America, Europe and the Middle East registered double digit growth in both average room rate and revenue per available room.

The Asia-Pacific region, in particular, grew by 12.7 per cent. As such, Asia is working actively to meet the hotel room crunch and maintain high standards of quality to meet the rising demands of the growing industry.

The F&B industry here has little reason to complain either. ‘The vibrant entertainment scene and growing tourist attractions are attracting visitors to Singapore in increasing numbers,’ noted a spokesman for Sushi Tei, adding that the robust economy in 2007 has translated to the increased spending power of Singaporeans.

While these factors will undoubtedly play a part in the growth of the local F&B industry, he says, inflation and the rising cost of living also have to be considered. ‘Rising costs is definitely a major challenge. For Sushi Tei, we are still not increasing prices yet, even though the prices of several food materials have gone up by double digit percentage,’ the spokesman said.

Economies of scale enable the company to cope with the increase. The consistent prices, unsurprisingly, have gone over well with customers, he said.

Sushi Tei, which currently has nine outlets in Singapore as well as additional outlets in cities such as Sydney, Shanghai and Bangkok, has its sights set on breaking into potential markets such as the US and the UAE.

‘FHA2008 (Food&HotelAsia) is being held against a backdrop of Singapore’s growing hospitality and tourism industries,’ said Stephen Tan, chief executive of Singapore Exhibition Services (SES) Pte Ltd. SES is the organiser of FHA2008 – Asia’s largest international food and hospitality trade event – which will be held at the Singapore Expo from April 22 to 25. It will act as a sourcing ground and a platform for buyers and sellers to converge, and Singapore’s geographic location puts it in an ideal position to gain from the booming trade.

FHA2006 generated $37 million in tourism contributions, nearly 30 per cent more than the $29 million for FHA2002.

Buyers are expected to come armed with a budget in the region of US$6.1 billion, according to a survey that polled the buyers attending FHA2008, a marked increase from the estimated US$5.9 billion sourcing budget for FHA2006.

FHA2008 will occupy seven halls – or 75,000 square metres – at the Expo and play host to 2,626 exhibiting companies from 69 countries. Over 37,000 visitors from 80 countries are expected to attend the biennial trade show, of which 38 per cent will hail from overseas. Visitors that have already pre-registered for the show include Banyan Tree and Singapore Airlines.

Source : Business Times – 22 Apr 2008

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