Singapore has imposed stricter rules on the conversion of shophouses to boutique hotels in historic districts. Paige Lee Pei Qi finds out how the new measures affect hoteliers and travel consultants
Even as boutique hotels in Singapore continue to find new fans, hoteliers seeking out new developments in prime areas will have to hold their horses following restrictions implemented by the Urban Redevelopment Authority (URA) in July.
These new measures seek to prevent the proliferation of tourist accommodation in areas not intended for hotel use, which in turn affect hoteliers looking to convert existing shophouses in historic precincts such as Chinatown and Little India. This policy will be reviewed in two years.
Within the Central Area, proposals for new hotels, boarding houses and backpackers’ hostels, including any change-of-use proposals, will generally not be allowed within certain areas inside the Outram, Rochor, Downtown Core and Singapore River Planning areas.
For other parts of the Central Area, URA will evaluate such proposals individually, considering the planning intention for the locality and the potential traffic impact that the individual proposal will generate. Outside the Central Area, all proposals will generally not be allowed.
According to URA, the move seeks to ensure such (hotel) developments “do not dominate and displace other commercial activities” in these areas.
Boutique hotel owners told TTG Asia that the regulation would further fuel their expansion abroad. Two-year-old homegrown brand Hotel Clover currently has four properties under its name, and the fifth one will be opened next year, according to CEO, Teo Kok Hwee.
Admitting that this new measure has halted his expansion plans in Singapore, Teo will instead cast his sights on overseas markets like Thailand, Malaysia, China and Indonesia.
He said: “I can no longer have my hotels in these historic areas, which is a pity, but it is fortunate that Hotel Clover has already built its name in Singapore.”
Wang Tjang Yuin, director of luxury boutique hotel Wangz Hotel, also expressed his disappointment at the new ruling, especially when combined with challenging labour situation in Singapore. He remarked: “We have placed any expansion plans within Singapore on hold and are focusing on developing countries around the region instead.”
This is a pity, however, as many interviewed noted that travellers are showing a greater interest in accommodation options offering a unique experience that hotel chains cannot give.
Small Luxury Hotels of the World (SLH) area & development director for Asia Pacific, Victor Wong said: “Having hotels built among other shophouses located in historic areas gives travellers a nostalgic feel and a back-in-time experience, since most shophouses date back to a century or more. This proves to be a refreshing experience in a very modern city like Singapore.”
The Naumi Hotel and The Scarlet Singapore on Seah Street and Erskine Road respectively – under the SLH umbrella – were themselves converted from shophouses in historic areas.
Likewise, Loh Lik Peng, director, Unlisted Collection, said heritage has been a key selling point for its three luxury boutique hotels in Singapore: New Majestic Hotel, Hotel 1929 and Wanderlust. He said: “Our guests love being in a historic and interesting local ethnic location such as Chinatown or Little India, and they love staying in heritage buildings.”
“We have placed any expansion plans within Singapore on hold and are focusing on developing countries around the region.”
Wang Tjang Yuin, director, Wangz Hotel
More leeway please
SLH’s Wong opined that there should be flexibility in exercising this rule. He said: “The new regulation seeks to prevent a hotel overcrowding situation within a single area to ensure the diversity and charm of the different districts – which is a fair consideration.
“However, I also think there should be room for evaluation on a case-to-case basis regarding new hotels’ application in the restricted zones.”
Mary Sai, executive director, Knight Frank, said: “It is a very clear-cut signal from URA that they want to protect these areas for the residents because the proliferation of hotels means that residents may be deprived of their own amenities like coffeeshops or supermarkets.
“In the past, it would be refreshing to see a boutique hotel in the neighbourhood, but now it is becoming too much that enough is enough.”
According to Sai, while the demand for shophouses may be dampened by the new rules, owners of shophouses already approved for hotel use will find their assets rise in value over time because of the difficulty in getting hotel sites.
She said: “The added value is subjective because it depends on various factors like location, size, number of rooms, etc. But the asset value goes up by approximately 30 per cent.”
For existing approved hotels and boarding houses on sites zoned for hotel use, any proposed intensification of the Gross Floor Area (GFA) will continue to be subject to evaluation.
Expansion of existing approved boarding house and backpackers’ hostel uses that are on Temporary Permission will be considered individually, up to the total GFA of the existing building that it occupies. Further renewal of the permission will only be allowed if they have not caused any adverse traffic impact and disamenity to the surrounding users.
Agreeing with the need to protect historic neighbourhoods, Unlisted Collection’s Loh said: “There has been a rash of poorly thought-out conversions recently, and they have very poor quality spaces and fit in poorly with the rest of their neighbourhood.
“I think for a district to thrive there needs to be variety, and having a concentration of hotels will only make the area touristy and irrelevant for locals.”
However, Loh shared that the new measures would have minimal impact on his business. He elaborated: “Given the prices of property in Singapore now and the very acute labour situation, there is no realistic prospect for me to purchase any shophouses for (hotel) conversion.”
Similarly, inbound operators were generally unfazed by the new developments.
Siam Express, managing director, Jaclyn Yeoh said: “Demand for luxury boutique hotels is limited to the West European market, and mainly FIT traffic. Due to the small size of this market and their low inventory, the quantitative impact is negligible.”
However, she conceded that special interest groups may be lost due to the dearth of variety in the market.
Luxury Tours & Travel Singapore’s director, Michael Lee, added: “Boutique hotels are a niche market that appeals more to the younger and solo FIT travellers. It is a good addition to have but it is not really our core audience.”
This article was first published in TTG Asia, October 24, 2014 issue, on page 4. To read more, please view our digital edition.
