Sustainable growth beckons for Singapore’s hospitality sector

With so many options in the market, deciding where to stay when traveling is not always an easy decision. Budget, location, and brand are key factors to consider when making a decision, however, one fundamental truth remains - people will remember why they chose to stay in a hotel at a specific location, but they’ll leave the best hotels remembering how they felt.

 This is why hotel brands invest in creating a unique experience for their customers – people return to the same hotel to relive the memories, positive moments, and emotions inspired by their stay. The physical spaces in the hotel form the cornerstone behind the brand experience – one that translates into personalised services that customers engage with and breathes life into memories of their place of rest. 

Diversifying is king

In a bold new world, businesses that broaden their offers and appeal to focus on enriching their deep connection with visitors are better inoculated against whatever tomorrow may bring. As international travel is bouncing back from the pandemic, amenity-rich places like hotels have had to transform their business models to better surf the storm.

Today, it is not uncommon for hotels to be choice venues for work-from-home employees seeking premium experiences, staycations, work retreats, awaydays, networking events, corporate workshops, teambuilding programmes and life celebrations – and many have evolved their service offerings to meet this growing demand from both domestic and international markets.

There are lessons to be learnt from the corporate world – in our first power of place report we asked employers what really mattered at their workplace. We found that while the pandemic and subsequent rise in hybrid and remote working may have changed the world of work exponentially, the physical workplace still has a crucial role to play in encapsulating brand identity, creating a sense of belonging among talent, and inspiring creativity and productivity among employees.

Our latest research ‘The power of place II: The true cost of inaction’ report has confirmed the commercial benefits of investing in placemaking to boost bottom lines.

Such findings are equally relevant to amenity-rich spaces where brand equity and customer retention are built into the physical bricks and interiors – extending into intangible service qualities that complete the brand experience. Hotels, ahead of other sectors, would fully recognise the benefit of personalised interactions and touchpoints delivered in exceptional places – to remain the brand of choice in customers’ minds. 

Sustainable growth beckons for Singapore’s hospitality sector

Average hotel occupancy in Singapore reached 75.8% in 2022, which is one of the highest in the world, while the average global rate is at 66%. Singapore welcomed 7.23 million international visitors between January 2022 and January 2023. The rising number of international travellers to Singapore has been driving the hospitality sector, which is forecasted to grow at a CAGR of >6.9% over the next 5 years. 

Post COVID, Singapore is highly seen as a holiday destination, and as part of the SingaporeReimagine Marketing Programmes (SMP), Singapore Tourism Board granted $4m to 10 marketing campaigns to boost tourism to the Lion City. 

In the last few decades, Singapore has emerged as one of the most important hubs for facilitating regional trade flows, attracting international investors in the fintech sectors. The total number of visitors to the country is growing at an average of 6% over the past 10 years, while the hotel room supply is growing at only 4.2%. This gap creates challenges for the tourism industry and has lead the country to invest in the hospitality sector. 
With Singapore’s Green Plan, the country is leading ambitious and concrete targets towards achieving the 2030 global pledges, and the long-term Net Zero emissions aspiration by 2050. Findings from our ‘power of place: The true cost of inaction’ report reveal that landlords and investors in the retail, hospitality, and leisure sectors cite the most precedence on net zero accreditations – likely owing to the demand from occupying brands whose reputations are sensitive to consumer perceptions. 

Part of the 2030 Green Plan, Singapore aims to be a sustainable tourism destination and to be a leading centre for green finance and services in Asia. 

Investors today are very in tune about the preferences of consumers supporting brands with well-defined sustainability goals and deliverables that are measurable. The line between a brand and its reputation has never been blurrier – consumers are better informed than ever and want to know how brands are giving back to the community and enriching the world we live in – beyond managing the bottom line.

Our latest report “Sustainable Buildings Monitor: Redefining Value”, reveals that developers have cited that their investment in ESG as owing to it being a critical issue to the tenants they wish to attract. With Singapore’s conscious decision to enact energy audits as part of Building and Construction Authority’s (BCA) new Mandatory Energy Improvement (MEI) regime, which will be introduced by the end of 2024. 

When working with developers, operators, or local authorities, we share the ambition to create places committed to measurable green targets and certifications in line with national regulations, and our hotel clients’ underlying objective – to create memorable experiences that build brand loyalty and enrich lives.

With the cost of inaction defined, is your business invested in its sustainable future?