Inside Asian Gaming

INSIDE ASIAN GAMING | April 2010 34 Superior returns on office blocks It’s not surprising Singapore developers said ‘no thanks’ to buildingmore hotels. For years, Singapore property values have been overwhelmingly driven by the office sector. The city-state remains one the top ten locations in the world for office occupancy cost. In 2007, it was one of the world’s top five performers in office rental growth with a 78% increase year on year, according to Cushman and Wakefield Research. According to Singapore Tourism Board statistics for 2009, the city had on average 26,523 tourist arrivals per day, served by a maximum of 32,709 gazetted hotel rooms at year-end. That’s 1.2 hotel rooms per visitor per day. But only around 58% of Singapore tourists (15,383 per day) actually stay in gazetted hotels, according to the STB. Around 21% stay with friends and family. That changes the ratio to a much more favourable 2.1 gazetted hotel rooms for every tourist arrival actually seeking hotel space. Were, however, an additional 80,000 daily MICE visitors and 4,300 new hotel rooms from the Singapore IRs to be added to the mix, that would produce a total of 106,523 visitors per day effectively competing for access to only 37,009 hotel rooms of international standard. That’s only 0.3 rooms per visitor. Singapore has—possibly because of the high cost of its international standard hotels—a lot of small guesthouses. These establishments are known as ‘non-gazetted’ hotels and add another 8,620 rooms to the city’s inventory. But they’re hardly the sorts of hotels likely to attract MICE visitors. Convention delegates don’t normally stay in guesthouses or share a room—at least not with their fellow delegates. Breakdown of Major Expenditure Items TOTAL Shopping Accommodation Food & Beverage Medical Local Transport Sightseeing/Entertainment Others Year-On-Year %Change Source: STB and Singapore Disembarkation/Embarkation Cards TEV by Expenditures, 2008 TEV: S$ 10.644m Others S$ 33m Shopping S$ 3,520m Sightseeing/ Entertainment S$ 160m Local Transport S$ 635m Medical S$ 1,025m Food & Beverage S$ 1,025m Accommodation S$ 635m Excludes 2008 FORMULA 1™ visitors’profile -37.1 -31.2 -10.0 -6.1 43.1 12.6 18.2 24.0 8.3 33.7 12.8 45.0 13.4 1.7 15.9 9.1 0 (%) 50 -50 0% 2% 6% 10% 15% 35% 33% TopTen Most Expensive Office Locations 2008 Hong Kong CBD Tokyo CBD London West End Moscow CBD Dubai CBD Mumbai CBD Paris CBD Abu Dhabi CBD Mumbai Central - Worli Singapore CBD Source: ‘Office Space Across the World 2009’ Cushman & Wakefield Research 0 500 1000 Total Occupancy Cost (Per sq.m. Per Year) 1500 2000 Type of Accommodation, 2005-2008 100 80 60 40 20 0 (%) Source: STB Annual Report on Tourism Statistics 2008 2005 2006 2007 2008 Excludes 2008 FORMULA 1™ visitors’profile Not Stated Others Residence Of Friends Relatives Hotels 6 16 18 59 61 18 14 7 8 10 20 61 58 21 15 7 MICE in Singapore