IE Singapore sees opportunities in the fast-growing markets of the Asia-Pacific and the Gulf
DESPITE the global economic slump, Singapore’s hospitality players do not seem to have let up in their aggressive expansion overseas, especially in Asia. They continue to be driven by new opportunities opened up by the recession, and new ways to meet the demand of travellers with tighter budgets. And International Enterprise (IE) Singapore, which has been pushing them to go global, is still egging them on.
‘Even in times of economic downturn we see opportunities in the fast-growing markets of the Asia-Pacific and the Gulf,’ says Tham Poh Cheong, director of IE’s infrastructure, environmental and engineering services divisions. ‘We are working with Singapore-based hospitality companies to facilitate their overseas expansion by unearthing these opportunities and providing market access.’
Among the help offered by IE: sharpening the competitive edge of Singapore companies, paving the way for them to break into emerging markets fast, and providing leads to grow their presence in mature markets.
Players such as Pan Pacific Hotels Group, Frasers Hospitality and CTC Holidays report launching new hotels or service apartments as well as signing new management deals in the past year. Where investments in hotels and service apartments were once unattractive because of high property prices, the picture has changed amid the recession.
‘Following the global financial crisis in late 2008 and the resulting drop in property prices, many hotel and service residence properties in major cities are now within reach,’ says an IE spokeswoman. ‘This has created merger and acquisition opportunities for Singapore-based hospitality companies to further establish their presence in major cities that were previously considered to be too expensive.’
Still, in pushing on with overseas expansion, many chose to offer consultancy and operating expertise rather than taking a stake in hospitality projects. ‘Through such asset-light business models, Singapore-based hospitality companies can advance expansion in overseas markets while minimising business risks,’ says the IE spokeswoman.
Singapore hospitality players have also developed new products, such as second-tier brands, to service an emerging pool of budget-conscious travellers. ‘In short, such products offer the necessary facilities delivered with high service standards, while keeping prices appealing, for customers to travel in comfort,’ the spokeswoman says. ‘When the economy picks up, this customer pool has the option to upgrade to higher-end products, thus encouraging customer retention.’
While the Asia-Pacific – projected to be the fastest- growing market for tourism – has not escaped the global downturn, the tourist trade in this part of the world has been less hit, says the World Tourism Organization.
The Pacific Asia Travel Association tips Asia, which drew about 280 million tourists last year, to bounce back and grow an average 4-5 per cent for the next three years.
Lower airfares brought on by the emergence of low- cost carriers have boosted demand for travel and accommodation in the region. IE says the tremendous growth in domestic travel in China and India has led hotel chains to invest in tourist-class hotels. ‘Singapore-based hospitality companies can leverage on the growth of the regional connectivity to capture business opportunities in the regional destinations,’ says the IE spokeswoman.
This includes starting operations in cities serviced by budget carriers to service travellers on smaller budgets in these recessionary times. ‘Singapore-based hospitality companies can grow within this fast-growing mid-scale market segment, essentially providing the core facilities needed by travellers while leaving out the frills of porter and full bouquet service,’ the spokeswoman says.
Singapore hospitality players are well-placed to capture a big slice of the market in the region, she says. ‘Operating well over 560 hotels, resorts and service residences with over 120,000 keys worldwide, they have vast experience operating in nearby markets of South-east Asia to (the) emerging markets of China, India, the Middle East and even in markets farther afield, such as Africa and Central and South America,’ she says.
Source : Business Times – 5 Nov 2009
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