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Mr Lim Neo Chian, Deputy Chairman and Chief Executive of the Singapore Tourism Board.
Speaking at the opening of the SHA-REDAS (Singapore Hotel Association and Real Estate Developers Association of Singapore), seminar held in late June, Singapore Tourism Board's Deputy Chairman and Chief Executive, Mr Lim Neo Chian, said 14 new sites for hotel development have been opened up which, if sold, could add another 6,000 rooms to the city's inventory.
He said that since August last year, eight Government Land Sites (GLS) have been sold which will contribute 2,700 additional rooms.
Addressing the 70 or so hoteliers, property developers, consultants and government agencies gathered for the one-day event, Mr Lim added: "We are happy with the level of interest of the local players to bid and tender for the hotel sites.
"The number of foreign players participating in the various tenders has not been high, but we can sense the high level of interest of potential foreign investors and the confidence they have in the Singapore tourism sector.
"We expect an increased participation in the sale of hotel sites in the coming years, after they become more familiar with the Singapore investment environment."
The STB has estimated that Singapore would still face a shortfall of 4,000 hotel rooms in 2010, even with the 4,300 rooms within the two Integrated Resorts and the extra confirmed supply coming on stream.
The Merrill Lynch report, issued on 18 June, supports the findings. It forecasts that Singapore will attract 17.7 million visitors by 2015, an 82% jump from the 9.7m visitors in 2006. This is 4% higher than the Tourism 2015 target of 17 million visitor arrivals. The report also stated that the demand for hotel rooms will increase at an average of 4,050 rooms per year between 2007 and 2015.
"Supply of rooms is forecast to increase at 3,300 rooms per annum, resulting in a 19% shortfall per annum. In 2015, we forecast that demand for hotel rooms will reach 62,100 rooms per day whereas supply will only reach 59,220 rooms per day," the report said.
As a result, "we forecast room rates to triple to S$600 by 2015 and occupancy to remain above 90%. Correspondingly, we forecast RevPAR to reach S$540 per room by 2015, 270% above the RevPAR in 2006".
It observed that Singapore was still affordable by global standards. "As at end 2006, Singapore's four- and five-star hotel room rates were cheaper than Hong Kong's and Shanghai's by 54% and 17%, respectively. We believe that as market conditions improve, hotel operators will regain pricing power and room rates will begin to converge with those of regional peers."
Mr Lim said Singapore's tourism was on a growth track. "Barring major catastrophes, we expect this growth trend to continue in the next few years.
"We should leverage on the next two to three years of optimistic outlook to chart and shape the longer term competitiveness of our hospitality sector. If we do it right, our hospitality sector can be a key competitive edge to attract tourists to Singapore, in addition to our theme-parks, MICE infrastructure, nightlife, etc."
Major projects coming on stream such as the Singapore Flyer opening early 2008, Singapore Grand Prix in September or October 2008, Marina Bay Sands in the later half of 2009, Resorts World at Sentosa in 2010, and other projects like the Sports Hub, Gardens by the Bay, and the new National Arts Gallery would make Singapore a much more attractive place to visit, he said.
In 2010, the STB expects visitor arrivals to reach 14 million and the average length of stay to increase from the current 3.4 to 3.6 days.
"The average number of visitors in Singapore at any one time is expected to increase from the current 90,000 to 140,000, a 55% increase. Everything being equal, we can expect business to increase by 50% from the current level in three years' time. So, there is quite a lot of extra business to be made, if we position ourselves right, relative to the new situation," said Mr Lim.
Correspondingly, hotels have fared well. Over the last three years, from 2004 to 2006, the Average Occupancy Rate (AOR) has increased by 4.6 percentage points (from 81% to 85%), the Average Room Rate (ARR) by 35 per cent (from $122 to $164), and RevPar by 43 per cent (from $98 to $140).
Growth has continued into this year. From January to May this year, compared with the same period last year, AOR reached a high of 86 per cent (from 82.4%) while ARR topped $189 (an increase of 19%), and RevPar rose to $163 (an increase of 24.2%).
"Until the hotel room supply and demand situations narrow in three- four years' time, AOR is expected to remain in the high 80s, and rates are expected to continue to increase," said Mr Lim.
