Published The Straits Times, 29 Sep 2012
WHEN Mr Anthony Scaramucci wanted to bring Salt, the largest US annual hedge-fund schmooze fest, to Asia for the first time, he toured five cities looking for a venue.
Citing its world-class infrastructure and status as a global financial centre, Mr Scaramucci, known in the industry as "the Mooch", ruled out Hong Kong, Tokyo, Seoul and Shanghai before settling on Singapore's Marina Bay Sands hotel and casino for his SkyBridge Capital's SkyBridge Alternatives Conference on Oct 17-19, an add-on to the firm's annual conference in Las Vegas.
"The attitude in Singapore is that they aggressively want to compete," Mr Victor Oviedo, a SkyBridge Capital partner who toured Asia with Mr Scaramucci, said in a phone interview from the firm's base in New York. "Despite being small, they have managed to compete in a boxer world above their weight class."
Singapore has emerged atop Asia's ranks for business travellers and conventioneers ranging from orchid collectors to financiers and economists such as Mr Michael Milken, Mr Jim Rogers, Professor Nouriel Roubini and Mr Joseph Stiglitz.
They are being lured by the Sands, a two-year-old resort built by US gaming giant Sheldon Adelson, uncongested roads, some of the cleanest urban air in the region and development projects with waterfront parks, luxury shops and high-end restaurants.
Singapore topped Hong Kong as Asia's most-popular business destination in the first half of this year, according to a survey of 2,500 people in nine countries by Accor SA, the largest international hotel operator in the region, whose chains include Sofitel, Novotel and Ibis.
CONVENTIONS, conferences and trade shows in Singapore rose 46 per cent to 2,130 last year from 2010, according to the Singapore Tourism Board.
Comparable international events in Hong Kong fell almost 7 per cent to 1,336 in 2011 from a year earlier, data from the Hong Kong Tourism Board show.
"Singapore has constantly reinvented itself," Mr Clarence Tan, chief operating officer for Asia and Australasia at London- based InterContinental Hotels Group, which manages hotels including the Crown Plaza and Holiday Inn in Singapore, said in a phone interview from Tokyo.
"As Asia matures, Singapore has also matured as a destination for the more savvy business and leisure travellers."
HONG Kong's overnight business visitors fell 1.3 per cent to 1.75 million in the first six months of this year, according to the tourism board. Excluding business travellers from mainland China, they fell 2.2 per cent to 994,200.
Singapore does not break out half-year numbers, country of origin or duration of the stay. Its 3.2 million business visitors is a 2.6 per cent rise last year over 2010, according to its official figures.
Hong Kong is dependent on business travellers from mainland China.
Last year's overnight arrivals, excluding Chinese mainlanders, were little changed at 0.1 per cent growth to 2.03 million, while including them, they rose 4.1 per cent compared with the year before.
For the first time, Singapore was ranked the world's top international meeting destination last year by the Union of International Associations, a research institute in Brussels that collaborates with United Nations' agencies, including the Food and Agriculture Organisation, the Economic and Social Council and the UN Educational, Scientific and Cultural Organisation.
Singapore is also posting the highest hotel occupancy rates in the region.
In January, they climbed 12 per cent to 92 per cent from a year ago, the highest rate of the year, according to CBRE Hotels Asia Pacific. Average occupancy in the six months to June rose almost 1 per cent to 84.6 per cent from a year ago, according to London-based research group STR Global.
Hong Kong posted a 0.2 per cent increase to 83.8 per cent in the first six months of this year. Shanghai gained 8.2 per cent to 58.5 per cent, while in the US, they climbed almost 3 per cent to 62.3 per cent, the data show.
The Marina Bay Sands, which opened in 2010 and whose design recalls the Starship Enterprise of the TV series Star Trek, had an occupancy level of more than 99 per cent in the second quarter of this year, the highest for any casino hotel in the world, according to brokerage Phillip Securities.
"It becomes a wave movement," Mr Robert McIntosh, executive director of CBRE Hotels Asia Pacific, a unit of Los Angeles-based property broker CBRE Group.
"For a while, a new facility will attract a lot of conferences because they want to say that they've been to that new one." Business travellers and convention organisers also consider "things like pollution, political risk", he said.
SINGAPORE last year had air that measured "good" 96 per cent of the time, according to the Pollutant Standards Index used by the National Environment Agency. Public anti-government protests are virtually non-existent.
Hong Kong's polluted air exceeded World Health Organisation guidelines for "dangerous" or "very dangerous" for 306 out of 365 days last year, or 84 per cent of the time, according to the Hedley Environmental Index published by the University of Hong Kong.
At least three anti-government demonstrations in recent months drew thousands of people to Hong Kong's streets.
Even as international meetings, including trade shows and exhibitions, in Hong Kong declined last year, conventions alone grew 24 per cent to 324 and meeting attendees rose 9.3 per cent to 1.56 million from the previous year, meaning that the industry has done "rather well" given the state of the global economy, Ms Josephine Lo Wing-sze, a spokesman for the Hong Kong Tourism Commission, responded in an e-mailed statement.
"TOKYO and Seoul may tick many of the boxes, but what's been achieved in Singapore is that it ticks a lot more boxes than it did four, five years ago because of the new facilities and the increased range of facilities," Mr McIntosh said, noting that the rise of the yen, which has remained at post-World War II highs of less than 80 to the US dollar for most of this year, has made Tokyo more expensive.
Singapore ranked fourth among Asia's cities for its hotel rates - behind Sydney, Hong Kong and Tokyo - and 18th in the world, according to a biannual survey by London-based Hogg Robinson Group.
Its average room rate of S$335 (US$264) in the first six months of this year was an increase of 3 per cent over the same period last year, it said.
Hong Kong rates averaged HK$2,380 (US$307) in the same period, unchanged last year. In Tokyo, the average room cost 22,348 yen (US$280), a 4 per cent increase over last year, the survey said.
Hotel rates in Singapore rose almost 10 per cent last year compared with 2010, according to STR Global.
THAT has regional business travellers seeing the impact. Mr Yoshinobu Agu, 43, an investment-banking executive from Citigroup in Tokyo who stayed at the Ritz-Carlton, Millenia Singapore, next to the Marina Bay Sands, on a visit last month said Singapore hotel rooms had become expensive, almost on a par with New York and Tokyo.
Business travellers to Singapore are increasing their hotel spending more than for any other country, budgeting 16 per cent more per night in the first half of this year compared with the same period in 2011, the Accor survey found.
The average Singapore hotel allowance in US dollar terms rose to US$156, an amount lower than STR Global's room average because it accounts for corporate discounting. In comparison, a business traveller in the Asia-Pacific region spent US$125 a night, a 3.3 per cent increase from a year ago, the survey showed. In the US, a room night cost US$102.
"Singapore hotel rates have remained high," said New York-based Shankar Iyer, founder and chief executive officer of Viteos Fund Services, which provides support to hedge funds, who visits Singapore a few times a year. "My average spend in the rest of the world has gone down because hotels around the world, especially Europe and North America, have had poorer occupancy and hence better rates."
STILL, many say it is worth it.
Mr Peter Thompson, 38, a London resident on a work assignment with Universal Studios, paid about US$360 (S$442) a night at the Ritz-Carlton last month.
"I loved the hotel experience here," he said while seated in the high-ceilinged, airy lobby after checking out.
"The service was superb, and for the price, it was a steal for the amenities and services the hotel offered. In London, I would pay more with no swimming pool and no breakfast included."
The luxury hotel segment in Singapore posted a 12 per cent increase in revenue per available room until May, compared with a year earlier, Mr Jonas Ogren, Asia director at STR Global, said in an e-mailed response to questions.
Hong Kong's luxury segment revenues grew 4.6 per cent in the same period.
SHARES of the Singapore-traded arm of the Mandarin Oriental Hotel Group, Mandarin Oriental International, the operator of luxury hotels from Singapore to San Francisco, are up 3.7 per cent this year compared with a 16 per cent advance in the benchmark Straits Times Index. The company reported a 29 per cent decline in profit for the six months ended June 30 due to the euro zone crisis and "fragile" economic conditions.
Las Vegas Sands Corp said second-quarter profit fell 34 per cent as revenue in Asia and Nevada slumped. Mr Adelson, chairman of the Sands, called the Singapore property an "incredible success" during a conference call with investors in June.
"Three hundred million people within a 90-minute flight or a car trip gives us confidence that there is considerable room for growth as tourism expands," he said.
Singapore is estimated to add 17 per cent more hotel rooms from last year through 2014 as visitor arrivals are expected to climb 20 per cent in the same period, CBRE said.
TOURIST arrivals are expected to reach 18 million in 2015, up 36 per cent from the 13.2 million last year, Mr Tan of InterContinental said. The chain, which has four hotels in Singapore, plans to double that in the next three to five years, he said.
"Singapore is adding about 2,500 rooms annually now, and the market seems to be able to absorb it quite nicely," he said. "That augurs well for the industry."
The Marina Bay area, targeted for development by the Government in 2005, includes waterfront pedestrian areas and promenades, a freshwater reservoir, performance spaces, an art and science museum, tapas restaurants and oyster bars, the US$6 billion Sands casino resort, commercial and residential buildings and the world's largest Ferris wheel, the Singapore Flyer.
The year it planned the marina, Singapore also overturned a 40-year ban on casinos to spur economic growth.
In addition to the Sands, Resorts World Sentosa, built by Genting Singapore for $7 billion, opened in 2010 and features South-east Asia's only Universal Studios theme park. The two hotels were granted by the Government a 10-year period of operating exclusivity.
SINGAPORE in June opened its newest marina attraction, the $1 billion 101-ha Gardens by the Bay, featuring flora from South America and Africa, as it seeks to boost visitor arrivals by as much as 10 per cent this year. The country plans to spend a further $905 million over the next five years boosting tourism.
The Salt conference will host an array of speakers including former junk-bond king Mr Milken and New York University's Prof Roubini, as well as politicians Al Gore and Tony Blair.
Mr Scaramucci announced in July that he intends to open a SkyBridge Capital office in Singapore next year and seeks to raise as much as US$500 million for an Asia-focused fund. "Our identity as a company matches that of Singapore," he said while making the announcement. "Both are small but manage to pack in a lot and have lots to offer."