Singapore Outpaces Hong Kong in Hotel and Tourism Race

30.09.2024 - 22:05 / skift.com / Sean Oneill

Singapore’s hotel market is surging ahead of Hong Kong’s, capitalizing on travelers attending the city-state’s major events while Hong Kong struggles.

Singapore has positioned itself as a premier destination for high-profile events and luxury travelers, while Hong Kong grapples with a softer corporate market and budget-conscious visitors, according to a report by Global Asset Solutions.

Why it matters: The rivalry between these two Asian travel hubs extends beyond banking, with hotel performance serving as a key indicator of international appeal.

Singapore has courted marquee live entertainment, theaters, and high-profile sporting events to cement its pitch as an ideal stopover for long-haul travelers.

Its approach to attracting major events is assertive. It negotiated for Taylor Swift to make Singapore her exclusive Asia Pacific stop on her Eras tour, and the concerts boosted hotel occupancy to over 83%, a record for the month of March.

The city-state’s bet on live event tourism is paying dividends for hotels. With superior large-scale venue infrastructure, it’s better positioned to host crowd-pullers. This month, Formula 1 Grand Prix drove room rates 10% higher than when the event was held last year, illustrating growing demand.

The events help generate buzz about the city, which actively promotes itself via creators and influencers on social media as a good stopover destination for long-haul travelers.

Hong Kong aims to become more competitive in winning bids to host large-scale events. Although it lacks a major stadium, it is completing a new 50,000-seat venue, set to open in 2025.

Hong Kong is struggling to shed its reliance on luxury retail. Many mainland Chinese consumers have been pulling back on luxury retail shopping because of the country’s troubled stock and housing markets. Foreign visitors increasingly can get the same types of luxury offerings elsewhere.

The city’s luxury segment is particularly hard-hit, with some top-tier hotels reporting occupancy as low as 45%.

Currency headwinds aren’t helping. Hong Kong pegs its currency to the U.S. dollar, making the city pricier relative to Shenzhen, Beijing, and Shanghai for consumers.

Some hotel owners are pivoting, eyeing property conversions to student housing. Their properties, which are older on average than Singapore’s hotels, are often more affordably switched to other uses than upgraded.

A shift of corporate offices from Hong Kong to other cities in recent years may reduce the number of business travelers passing through the city indefinitely. However, the city has many natural assets and has an opportunity to promote outdoor activities at its scenic vistas.

“A lot of people don’t realize how, compared to other major cities, there’s