As Far Away As Pulau Ubin, Hotels Grapple With F1 Levy

By Lee U-Wen (TODAY)
15 August 2007

ONE'S a budget hotel for backpackers in Joo Chiat, another in Chinatown caters mainly to locals, while a third is a resort tucked away on the tranquil island of Pulau Ubin.

They are hardly close to the scene of next year's inaugural Formula One (F1) race in Singapore's Marina Bay area, nor are their guests likely to be international F1 "groupies".

But the three hotels are among at least 92 hotels likely to be charged a 20-per-cent tax on their room rates for five nights in September next year, when the F1 comes to town.

This tax - together with a higher 30-per-cent levy imposed on 11 "trackside" hotels expected to benefit the most from demand for rooms with a race view - is part of the Government's bid to recoup the cost of hosting the race, it was announced on Monday.

Some of the other hotels located far from the action, however, are wondering whether the demand from the spillover crowd will be enough to offset the 20-per-cent levy they will have to pay.

Said the supervisor of Astro Hotel in Joo Chiat, who only wanted to be known as Mr Ang: "We will have to raise rates because we have operating costs to consider. This is a small budget hotel and we rely a lot on walk-in guests, so it's hard for us to capitalise on the F1 fever."

Yesterday, Minister of State (Trade and Industry) S Iswaran said the demand for hotel rooms would be felt across the island.

He told reporters: "Singapore is a compact place, so even if you have a hotel in Changi, it's not difficult to get to Marina Centre. The effect will be quite broad-based, and in terms of occupancy and room rates it will be positive for all the hotels."

In addition, the Land Transport Authority is looking into convenient transportation to the venue, such as giving F1 ticket-holders access to the MRT. About 100,000 visitors are expected, of which up to 40 per cent could be here for three to four days, Mr Iswaran added.

The 92 hotels eligible for the 20-per-cent levy - which are those gazetted for the purpose of collecting cess charges - include those as far away as Pasir Panjang Inn, Changi Hotel and the Kampong Ubin Resort on Pulau Ubin.

Most that Today contacted were not even aware of the possible levy. They said they would wait for formal notification before deciding on a marketing strategy and whether to increase room rates.

A Ministry of Trade and Industry spokesperson said the Singapore Tourism Board would inform all the gazetted hotels on the exact collection mechanism of the F1 levy closer to race day on Sept 28 next year.

Mr Alson Leong, manager of Gateway Hotel in Joo Chiat, was surprised when told his hotel could be affected. But he said it was unlikely their rates would go up as that would affect regular guests who are not F1 fans.

"If they see our rates are higher than normal, they would simply choose not to come to Singapore during the F1 week. It would have been good if we were consulted on the levy," he said.

But Mr Desmond Poh, who markets the Kampong Ubin Resort in Pulau Ubin, was unfazed. While his guests are mainly corporate clients and unlikely to be overseas visitors coming here for the race - his hotel is the furthest from the track - Mr Poh was unconcerned about the levy.

"The 20 per cent is almost equal to the corporate discounts that we give out, so we won't be affected. And September to October is usually a hot period for us," he said.

Even so, hotels like his hope the Singapore Tourism Board will help promote them to the visiting F1 crowd.

At least one is looking at raising room rates. Ms Charmaine Wee, sales manager of the New Majestic Hotel in Chinatown, said: "Our average is about $340, and I imagine we will charge no less than $400 during the F1."