There’s room for more boutique hotels

BOUTIQUE hotels are sprouting like mushrooms recently but industry watchers say that the boutique hotel sector in Singapore is still under-penetrated. They say there’s room for at least another 10 new ones, to spice up the local hospitality scene and to attract more niche travellers looking for something different.

At Singapore’s latest boutique hotel, klapsons, you can take a shower right in the middle of your room just a few feet from your bed, for about US$270 ($385) per night in a basic executive room. The most expensive room, the premium suite, costs US$850 per night.

Since its soft launch in June, the 17-room hotel, located in downtown Singapore, has attracted bookings from some 250 corporate clients.

klapson’s director Adrian Lee said: “Right now you have the run-of-the-mill five-star hotel or the other extreme. There’s nothing that fills the gap in the middle which we see ourselves fit very nicely.”

Another boutique hotel, Naumi, which has 40 rooms, said that it’s banking on leisure travellers for next month’s Formula 1 race in Singapore and year-end holiday-makers.

Naumi’s hotel manager Hamat Rai said that “even in these challenging times, we’ve been lucky to be surviving on 80-per-cent occupancy”.

Quincy, which opened in June, has seen an average of 77-per-cent occupancy with nearly half of their guests being repeat visitors.

Observers say there will be no shortage of business for boutique hotels like these, if they offer value in their services.

Tourism Management Institute chief executive Loi HP said “they provide very personalised service”, are “unique in terms of room design” and are “normally located in areas where there’s a heritage background”.

Source: Today, 11 Aug 2009

More boutique hotels in S’pore can spice up hospitality sector: analysts

Industry watchers said the boutique hotel sector in Singapore is under-penetrated.

They said there’s room for at least another 10 new ones to spice up the local hospitality scene and to attract more niche travellers looking for something different.

Take a shower right in the middle of the room just a few feet from your bed is what you get to do for about S$385 per night in a basic executive room at Singapore’s latest boutique hotel, klapsons.

The most expensive room, the premium suite, costs US$850 or S$1,225 per night.

Since its soft launch in June, the 17-room hotel, located in downtown Singapore, has attracted bookings from some 250 corporate clients.

Located at 15, Hoe Chiang Road, klapsons will open officially in October.

It took developers three years to put the hotel together.

Initial plans include building a 17-storey commercial development but developers decided to build a four-storey boutique hotel instead due to the downturn.

klapsons’ owner said the building is designed in such a way that more levels can be added at any time.

Adrian Lee, director, klapsons The Boutique Hotel, said: “Right now you have the run-of-the-mill five-star hotel or the other extreme. There’s nothing that fills the gap in the middle which we see ourselves fit very nicely.”

The hotel expects to break-even on its US$7 million (S$10 million) investment in less than seven years.

Another boutique hotel, Naumi which has 40 rooms said it’s banking on leisure travellers for the September Formula One race in Singapore and year-end holiday-makers.

Hament Rai, “Even in these challenging times, we’ve been lucky to be surviving on 80 per cent occupancy. However, we had to compromise 20 per cent of our average room rates to achieve these goals.”

But due to economic uncertainty, Naumi has also shelved plans to expand. It previously said it will open two more boutique hotels in Singapore in the next three years.

As for Quincy which opened in June, it has seen an average of 77 per cent occupancy with 48 per cent of their guests repeat visitors.

Observers said there will be no shortage of business for boutique hotels like these, if they offer value in their services.

Loi Hp, CEO, Tourism Management Institute, said: “They provide very personalised service and they’re unique in terms of room design. And they’re normally located in areas where there’s a heritage background. So in a way, there are still people who want that kind of personalised service and they’re willing to pay for it.”

Most boutique hotels said their main growth markets are in Europe and America, with a proportion of guests coming from Australia.

These are usually well-travelled executives who are willing to pay five-star rates for a different hospitality experience.

Source: Channel News Asia, 11 Aug 2009

More boutique hotels in S’pore can spice up hospitality sector: analysts

SINGAPORE: Industry watchers said the boutique hotel sector in Singapore is under-penetrated.

They said there’s room for at least another 10 new ones to spice up the local hospitality scene and to attract more niche travellers looking for something different.

Take a shower right in the middle of the room just a few feet from your bed is what you get to do for about S$385 per night in a basic executive room at Singapore’s latest boutique hotel, klapsons.

The most expensive room, the premium suite, costs US$850 or S$1,225 per night.

Since its soft launch in June, the 17-room hotel, located in downtown Singapore, has attracted bookings from some 250 corporate clients.

Located at 15, Hoe Chiang Road, klapsons will open officially in October.

It took developers three years to put the hotel together.

Initial plans include building a 17-storey commercial development but developers decided to build a four-storey boutique hotel instead due to the downturn.

klapsons’ owner said the building is designed in such a way that more levels can be added at any time.

Adrian Lee, director, klapsons The Boutique Hotel, said: “Right now you have the run-of-the-mill five-star hotel or the other extreme. There’s nothing that fills the gap in the middle which we see ourselves fit very nicely.”

The hotel expects to break-even on its US$7 million (S$10 million) investment in less than seven years.

Another boutique hotel, Naumi which has 40 rooms said it’s banking on leisure travellers for the September Formula One race in Singapore and year-end holiday-makers.

Hament Rai, “Even in these challenging times, we’ve been lucky to be surviving on 80 per cent occupancy. However, we had to compromise 20 per cent of our average room rates to achieve these goals.”

But due to economic uncertainty, Naumi has also shelved plans to expand. It previously said it will open two more boutique hotels in Singapore in the next three years.

As for Quincy which opened in June, it has seen an average of 77 per cent occupancy with 48 per cent of their guests repeat visitors.

Observers said there will be no shortage of business for boutique hotels like these, if they offer value in their services.

Loi Hp, CEO, Tourism Management Institute, said: “They provide very personalised service and they’re unique in terms of room design. And they’re normally located in areas where there’s a heritage background. So in a way, there are still people who want that kind of personalised service and they’re willing to pay for it.”

Most boutique hotels said their main growth markets are in Europe and America, with a proportion of guests coming from Australia.

These are usually well-travelled executives who are willing to pay five-star rates for a different hospitality experience.

Source: Channel News Asia, 10 Aug 2009

Nice hotel, very quiet neighbours

Aqueen sets up stall right next to Singapore Casket

IS it possible to sleep well knowing that your neighbours are also resting – not just peacefully but in peace? This is what guests will soon find out when they check in at Aqueen Hotel Lavender, which is right next to Singapore Casket.

The 105-room hotel on Lavender Street will be opening its doors in September. Its owner is Crescendas Group, which owns another three Aqueen sites.

Times have changed, said Crescendas CEO Lawrence Leow, when BT asked if travellers would be nervous about the funeral service provider nearby. ‘In this modern world … I’m not affected by the fact that it’s next to the Casket.’

In fact, the location could open the door to unique opportunities. Cushman & Wakefield managing director Donald Han noted that the hotel might draw people who need a place to rest while they attend to wakes.

Asked if this was a possible market segment, Aqueen Hotels’ general manager Albert Leong said: ‘We welcome all kinds of guests.’

Although Crescendas’s Mr Leow could cast aside doubts about Aqueen Hotel Lavender’s location, he admits he can still be superstitious at times. For instance, he consulted a geomancer – who gave the Lavender site the all-clear – before entering the deal.

Also, there will not be rooms with the number ‘4’ or ’14’ across all Aqueen hotels – not just the one at Lavender. This, according to him, is his personal preference.

Mr Leow, who is also president of the Association of Small and Medium Enterprises, knew the site’s previous owner. He visited the 8,338-sq-ft freehold plot, did the sums and Crescendas eventually invested about $17 million to buy the land and build the six-storey hotel.

According to Aqueen Hotels’ Mr Leong, the Lavender establishment’s target market will be no different from that of other mid-tier hotels – it aims to draw business travellers who want a clean, value-for-money and accessible place to stay.

The hotel fits these criteria, he added. It is a 10-minute walk from Lavender MRT Station and is near the Singapore-Malaysia Coach Terminal. There is no swimming pool but all rooms come with broadband and cable television. He also emphasised that Singapore Casket is relatively quiet and guests will not be disturbed.

Aqueen Hotel Lavender’s site poses a ‘good challenge’ and could be a ‘marketing point’, Mr Leong reckoned. Room rates have not been fixed but they should be close to those at Aqueen Hotel Balestier. It is the first of the chain to open in May – its occupancy rate exceeds 80 per cent and promotional room rates are above $88 per night.

Cushman & Wakefield’s Mr Han noted that more people have found Lavender’s proximity to town attractive. He illustrated this with a few examples: Other hotel chains such as Hotel 81 and Fragrance Hotel have set up shop there, and prices at Citylights near Lavender MRT Station have risen.

Condos at Citylights were first launched in 2004 at an average price of $590 per square foot (psf). Caveats show that prices last month ranged from $950 to $1,176 psf.

As for Aqueen Hotel Lavender, Mr Han felt that it should do well even if it is next to Singapore Casket – budget travellers are generally ‘less picky on location’ and ‘more picky on stretching their dollar’.

Apart from the Aqueen hotels in Balestier and Lavender, two more are coming up in Paya Lebar and the Tyrwhitt area. Crescendas hopes to start building Aqueen Hotel Paya Lebar in the next two months.

Altogether, the four hotels will have around 360 rooms and Crescendas will be investing about $75 million in them.

Crescendas plans to grow the Aqueen chain further and is looking for more sites along the fringe of the city. The target is to have 1,000 hotel rooms in Singapore in the next three years.

The company, which also has real estate, manufacturing, distribution and technology businesses, first ventured into the hospitality industry on the belief that there is a shortage of mid-tier hotels here.

Source: Business Times, 8 Aug 2009

Swissotel Merchant Court hotel may be sold soon

TA Enterprise Bhd is proposing to buy both the hotel and its business

(SINGAPORE) Swissotel Merchant Court hotel in the Clarke Quay area is expected to change hands soon. Bursa-listed TA Enterprise Berhad said last week that it’s proposing to buy the 476-room hotel.

It did not reveal the price but market watchers say that it is likely to be in the mid-$250 million range.

TA Enterprise is proposing to buy both the hotel and its business. The hotel will be sold subject to a management contract with Swissotel, part of Fairmont Raffles Hotels International. Jones Lang LaSalle Hotels is said to be brokering the deal.

TA Enterprise – controlled by Tony Tiah and his wife Alicia – owns Westin Hotel Melbourne, Radisson Plaza Hotel in Sydney and the Aava Whistler Hotel in Canada, according to its website.

In an announcement last week, the group said that it had struck a deal with LaSalle Asia Opportunity II SARL to buy the entire issued shares of Quayside Gem Limited, which owns the hotel and business of Swissotel Merchant Court Singapore.

TA has secured an exclusivity agreement to perform due diligence on the property. The company has paid a deposit of $5 million, which will be forfeitable, if TA withdraws from the negotiations for the proposed acquisition or does not enter into a sale and purchase agreement with the seller by Aug 25, 2009.

During the exclusivity period, the seller will not sell, negotiate or solicit any invitations or bids for the sale of the hotel with any other parties.

Seller LaSalle Asia Opportunity II bought the hotel in 2006 from Fairmont Raffles Hotels International (owned by Kingdom Hotels International and Colony Capital), which had in turn acquired it as part of the entire hotel business of Raffles Holdings in 2005.

The hotel is on a site with a remaining lease of about 84 years. It was put up for sale a year ago, but a deal did not materialise then as sentiment worsened due to the global financial crisis.

Source: Business Times, 6 Aug 2009

Fragrance Group buys two more properties

PROPERTY and hotel firm Fragrance Group has bought two more properties, taking the total value of its acquisitions in the past month to close to $100 million. The company yesterday announced the acquisition of a 4,453-square-metre plot of land on Telok Kurau Road for $36.5 million and a 2,056-sq-m freehold site on Pasir Panjang Road for $23 million. The company’s two other acquisitions since mid-June cost a total of $33.51 million.

Fragrance Group chief executive Koh Wee Meng declined to comment on the identities of the sellers and on his company’s specific plans for the new acquisitions.

Construction and sale of the Telok Kurau development is expected to begin in the second half of FY2009. Meanwhile, said Mr Koh, tenancy at the 14 two-storey shophouses at the Pasir Panjang location will continue for a ‘minimum of one to two years’.

The $59.5 million purchases cap a busy week for the company. On July 21, it acquired the seven-storey Premier Centre from Hong Leong Group for $18 million, or $1,076 per square foot (psf). The office block is located at the corner of Beach Road and Tan Quee Lan Street.

Early last month, the company was awarded the tender for a Short Street hotel site by the Urban Redevelopment Authority. Its winning bid of $15.51 million, or $353 psf, was 76 per cent higher than the $8.8 million trigger price, and 11 per cent more than the next highest bid.

Fragrance Group has launched more than 20 landed properties and apartments to date. Additionally, its Fragrance Hotel chain has 20 branches islandwide, including a hostel on Dunlop Street. In its latest financial results, the group posted an 11.4 per cent increase in net profit for the second quarter ended June 30 to $17.7 million. Turnover rose 33.1 per cent to $79.5 million. The group’s shares closed six cents up at 61.5 cents yesterday.

Source: Business Times, 25 July 2009

NTUC Club drops plans for $45m Sentosa resort

IT IS officially off. A 200-room resort at Sentosa, complete with spa, an infinity pool and free wireless broadband access has been canned.

NTUC Club, the recreational arm of the National Trades Union Congress, said in a statement yesterday that ‘it is no longer viable to continue with the project’.

Rising land value and high construction costs were cited as reasons.

In the statement, it also added that the club and landlord Sentosa Development Corporation (SDC) ‘have a good understanding about the decision’.

The 3ha site, which belongs to Sentosa, ‘will be reviewed for future developments’. A Sentosa spokeman said that particular parcel of land has always been earmarked for sports and recreational use.

Plans for NTUC’s fourth resort facility, just minutes away from the upcoming Resorts World Sentosa, were unveiled with great fanfare in 2005.

It was to have cost $45 million and would give its members ‘a relaxing holiday at a very affordable price’.

But as of last September, the plot remained unused. When asked, an NTUC Club spokesman said plans for the resort were back on the drawing board due to rocketing land construction costs.

Neither NTUC Club nor SDC would comment on the agreement over the land. Sentosa would say only that the land was not sold and no rental payments were made as there was no lease agreement involved.

NTUC Club added that the only document signed was a memorandum of understanding.

A spokesman said the club has no immediate plans to build a new resort elsewhere. But he added that the club is always on the lookout to add more facilities for its club members.

Source: Straits Times, 25 July 2009

NTUC Club scraps plans for resort on Sentosa

DESCRIBED as a quality high-end resort for the working class, Palawan Resort was to have opened its doors by the end of last year.

But it will not be opening at all now.

Its developer, NTUC Club, has scrapped plans for the $45 million development on Sentosa after concluding that the project is “no longer viable”.

The 200-room resort was to have been built on a 3-hectare disused carpark and boast state of the art facilities, including a luxurious spa and a mirage pool.

Room rates would have been about $150 with discounts for union members.

But as of last September, the project – announced in 2005 by former NTUC Secretary-General Lim Boon Heng – had faced several delays.

With the Integrated Resort being built at Sentosa, NTUC Club said then it was reviewing the concept and plans for Palawan Resort. Plans had to be shelved due to “rising land premium and construction costs”.

After reviewing initial plans, the conclusion was that the project is “no longer viable”.

It was meant to be “an engagement tool by NTUC Club Investments (NCI) for the labour movement, to allow members to have an additional option for affordable leisure and entertainment,” according to NTUC Club.

NCI and Sentosa Development Corporation (SDC) have a good understanding of the decision and the site will be reviewed for future developments by SDC, NTUC Club also said.

Construction costs for commercial or sports and recreational spaces have risen by up to 15 per cent year on year.

But property analyst Nicholas Mak said the cost of land on Sentosa has remained relatively stable – the development charge rates, which is the tax paid to the government for the development of land at Sentosa – has not changed over the past six months.

Both parties declined to reveal details on the land arrangement but SDC said there were no rental payments made.

The project “never went beyond a Memorandum of Understanding”, said NTUC Club.

NTUC Club is the biggest local resort operator, managing three budget family-themed resorts.

Two are located in Pasir Ris and one on Sentosa.

Source: Today, 24 July 2009

New hotel with luxury shopping outlets to replace former Crown Prince Hotel

A new five-star hotel with luxury shopping outlets will soon replace the former Crown Prince Hotel along Orchard Road.

Set to open next year, the Grand Park Orchard Hotel and the Knightsbridge retail space linked to it will add to the buzz along the rejuvenated shopping district.

Its retail space will almost double to about 83,000 square feet.

It is part of Park Hotel Group’s plan – which was conceived in 2005 when it first bought the property – for a flagship property in its portfolio.

Allen Law, director, Park Hotel Group, said: “When we evaluate the concept of our mall, we look at our hotel portion as well. We are targeting this property to be our flagship property in our portfolio. We want to have some statement as of how our hotel group can transform an…old hotel into something totally new…So, first of all, that is our consideration.

“And, looking at the retail podium, we want to embark on a concept that is not so conventional in the Singapore context yet. But we do see this concept in places like Hong Kong, Japan, and even London. So, we have a concept that captures all the flagship brands and it is a collection of street front flagship stores…”

Knightsbridge tenants will have a double-storey facade facing Orchard Road.

About 50 per cent of space has been leased out, mainly to fashion brands.

Park Hotel Group said demand is strong despite the poor economic environment, but other challenges persist.

Mr Law said: “In terms of the economic outlook, it does affect the timeline in terms of the decision-making process. Our project has no difficulty in garnering interests from all these international branches.

“However due to their, maybe difficulties in other operations in different parts of the world, it may affect their decision-making in opening a store in Singapore. They are more careful in the sense that they look at their overall portfolio, and have to take a little bit more time…to make the commitment.”

The Knightsbridge stretch of retail outlets will link to the new Grand Park Orchard Hotel. Park Hotel Group is revamping the entire look of the building, noting that the original is almost 20 years old. It added that it sees a lack of rooms along Orchard Road, and expects strong demand when it opens for business.

Source: Channel News Asia, 17 July 2009

Frasers launches new service residence brand

FRASERS Hospitality yesterday launched Modena – a new line of service residences which cater to a budget-conscious and highly mobile group of business travellers.

Room rates at Modena will be around 20 per cent lower than those at properties under the existing Fraser brands. Some 1,000 apartments across five Modena properties will come on-stream in the next three years.

The launch is timely ‘because companies are really looking at cost-cutting measures’ and Modena will be ‘a lot more palatable’ for them, said Frasers Hospitality CEO Choe Peng Sum, who was in Tianjin, China yesterday to launch the brand. He heads the hospitality arm of Frasers Centrepoint, which is part of local conglomerate Fraser and Neave.

Apartments at Modena will be smaller than those under the Fraser brands. But Modena properties will have various facilities catering to ‘road warriors’ on the go, such as lobbies supplied with food and groceries, and 24-hour play rooms with gymnasiums and electronic game machines.

The first Modena property, with 272 units, will open its doors in Tianjin towards the end of this year or early next year. The second will be in Shanghai and another two will be in Suzhou. Frasers Hospitality will run them through management contracts.

The fifth Modena property – and also the flagship – will be ready in Singapore’s Changi Business Park in Q1 2012. Frasers Hospitality will own and manage the 300-unit Modena Singapore, which is under construction at a cost of $124 million.

Guests could come from the business park, Singapore Expo and the fourth university which is under development at Changi.

Modena Singapore will be part of a 4.7 ha integrated business and lifestyle development – a $500 million joint venture between Frasers Centrepoint and Ascendas.

The economic downturn has not curbed Frasers Hospitality’s ambitions for Modena. Negotiations are underway to expand the brand in Asia and Europe, and countries that it is interested in include India, France, the UK and Qatar.

Frasers Hospitality has also set itself a target of managing around 8,000 service apartments by 2010 and perhaps 10,000 apartments by 2012.

‘In this economic downturn, we have a very contrarian view – we see this as an opportunity for step-up,’ said Mr Choe. Modena for instance, may appeal to companies tightening their budgets, he explained.

Nonetheless, the picture for the service residences industry is not all rosy. In China and Singapore for instance, the economic downturn has pushed rates at Frasers Hospitality’s apartments down by 15-20 per cent. Occupancy rates have remained relatively stable, in the 80-90 per cent range.
Frasers Hospitality has also shelved plans to set up a real estate investment trust for ‘a few years’ until the ‘market is a lot more conducive’, Mr Choe said. For similar reasons, it has postponed plans to set up private equity funds to invest in service residences.

Source: Business Times, 17 July 2009