Business travelers are back Shangri-La - Business Travel

Business Asia, Sept, 2003

Shangri-La Asia, Asia's biggest luxury hotel group, said room rates at its Singapore flagship are expected to return to where they were before the SARS out break by early 2004.

Singapore's room rates fell after tourists avoided the city-state following the spread of severe acute respiratory syndrome in March, leaving as many as nine in 10 hotel rooms empty.

Shangri-La's rates will rise after discounts expire at the end of the year, general manager Cetin Sekercioglu said.

Shangri-La said it expects the Singapore hotel's occupancy to exceed 80 per cent in the fourth quarter, more than the same period a year ago when it filled about three in four rooms. It said business travellers are returning after conferences were postponed from earlier in the year because of the virus.

"Hotel operators are waiting for occupancy to come back up to increase the strength of the underlying markets before moving room rates up again," Scott Hetherington, managing director at Jones Lang LaSalle Hotels, said. Jones Long LaSalle is an industry/consultant and broker.

Global pick-up

From InterContinental Hotels Group to Starwood Hotels and Resorts Worldwide, hotel operators globally are reporting a pickup in guests and expect rates to rise when more rooms are filled.

"The conventions are coming back," Sekercioglu said, adding that half or the hotel's guests are corporate travellers.

The hotel's occupancy in August was higher than the same month last year, he said.

Sekercioglu spoke to reporters at the re-opening of its Valley Wing, a block in the 755-room hotel situated in a 15-acre property off the Orchard Road shopping belt. The hotel spent S$55 million ($47 million) over six months renovating the building.

Prices at the wing range from S$625 for a regular room to S$5500 for its 3723-square-foot presidential suite, which targets royalties such as the kings of Sweden and Morocco. The hotel also attracts celebrities such as footballer David Beckham.

Jones Lang LaSalle's Hetherington said the hotel planned the renovations at the right time. Tourists to the city-state fell to the lowest in more than two decades because or SARS.

"They're being extremely clever in taking inventory out of the hotel when occupancy is low," Hetherington said. "Improving the product will enable them to compete far more strongly in years to come."

Other than the downtown site, Shangri-La also runs the Traders Hotel in the city and another Shangri-La in the Sentosa resort island.