Do not disturb: Singapore hotels profit from Hong Kong turmoil

Singapore hotels are benefiting from growing protests in Hong Kong as travelers and business groups look for alternatives. (Reuters)
Updated 04 September 2019

Do not disturb: Singapore hotels profit from Hong Kong turmoil

  • Occupancy rates soar with highest revenue per room in almost four years as conferences switch from rival business hub

SINGAPORE: Singapore’s hotel occupancy rates have climbed to their highest levels in over a decade as travelers and business events switch from Hong Kong, where pro-democracy protests have hit tourist numbers and wider business sentiment.

Data released on Monday by Singapore’s tourism board showed average occupancy rates in the city-state's hotels hit 93.8 percent in July, the highest in records going back to 2005, and up from 92.5 percent a year ago.

The data also showed the highest revenue per room in almost four years, a trend analysts and hoteliers said was helped by conferences switching from rival business hub Hong Kong as protests that started in mid-June turned increasingly violent.

“Singapore may benefit twice as much from the Hong Kong fallout as both these destinations share similar traits,” said Derek Tan, an analyst at Singapore’s biggest bank DBS.

The Global Wellness Summit, a gathering of 600 health and beauty industry delegates scheduled for mid-October, recently said that it was moving to Singapore from Hong Kong. The event’s spokeswoman said this was “to ensure travel is as seamless as possible.”

Marcus Hanna, general manager of Singapore hotels, Fairmont Singapore and Swissotel The Stamford, said he had a 60-strong business group last month switch from Hong Kong for a five-night stay.

Hanna said his hotels, which offer conference and meeting facilities, have received a number of inquiries from companies looking to move events out of Hong Kong amid the growing unrest.

Jefferies analyst Krishna Guha said events in Hong Kong would have been a factor in lifting Singapore’s hospitality sector. Revenue per available room, a key performance metric for the hotel industry, rose to S$203.7 ($146) in July, its highest since October 2015, and up from S$200.2 in July 2018.

He said the unrest would have weighed on tourists’ summer travel plans, while other factors included tightening hotel supply in Singapore and a weaker Singapore dollar.

In Hong Kong, the city’s airport has suffered repeated disruptions due to protests, and hotel operators have reported lower occupancy rates and booking cancellations. 

Many countries such as Singapore have advised their citizens to defer non-essential travel to the former British colony.

“The outlook remains bleak for September and the rest of the year for destination Hong Kong,” said Alicia Seah, of travel agency Dynasty Travel, adding that inquiries and bookings have come to a “standstill” since last month’s airport shutdown.

“There are now spillover effects, with leisure and business travellers opting to travel to Singapore instead of Hong Kong.”


India probes Flipkart, Amazon discounts after retailers complain

Updated 15 October 2019

India probes Flipkart, Amazon discounts after retailers complain

  • Products on Amazon, Flipkart listed at steep discounts in sale
  • Trader groups allege firms violating foreign investment rules

NEW DELHI: The Indian government is looking into whether hefty discounts offered on Walmart-owned Flipkart and Amazon.com during their online festive sales violate foreign investment rules, a commerce ministry official told Reuters.
India introduced new rules in February aimed at protecting the 130 million people dependent on small-scale retail by deterring big online discounts. The rules forced e-commerce firms to tweak their business structures and drew criticism from the United States, straining trade ties between New Delhi and Washington.
While Amazon and Flipkart say they’ve complied with the federal rules, local trader groups say the two companies are violating them by burning money to offer discounts — of more than 50 percent in some cases — during the ongoing festive sales.
Reuters reviewed emails and internal training material from Flipkart showing the company is in some cases offering to reduce, or forfeit, its sales commission from sellers that offer discounts.
The commerce ministry official said the government was reviewing complaints and evidence filed by the Confederation of All India Traders (CAIT), a group representing some 70 million brick-and-mortar retailers, alleging Amazon and Flipkart were violating the foreign investment rules.
The official declined to comment on possible action, but executives from Amazon and Flipkart were summoned to meet commerce ministry officials last week to discuss the matter.
Flipkart in a statement said it had a “good meeting” with government officials and it was “deeply committed to doing business the right way in India.”
Amazon said it had an “open & transparent discussion” with officials and has a high bar for compliance.
Seeking to attract shoppers around the key Hindu festival of Diwali, both retailers have placed full-page advertisements in top national daily the Times of India to showcase discount offerings stretching from Samsung and Apple phones to clothing and diapers.
“Customers are going online because of the unbelievable discounts. Because of this sales at offline businesses are down 30 percent to 40 percent this month,” CAIT’s secretary general Praveen Khandelwal said.
Two emails received by Flipkart sellers in September, just days ahead of the inaugural phase of the festive sales, showed it offering to partly fund discounts.
The company would “burn” 3 percent of the discount if a seller lowered a product price by 15 percent, or 9 percent if the seller discounted by 30 percent, said one of the emails.
In training material posted on Flipkart’s restricted website for its sellers, seen by Reuters, the company asks them to prepare for the festive season by saying “nothing is bigger than this” and explaining how they can benefit by discounting products for Flipkart’s premium customers.
“We want to ensure that you fetch as much profit from it as possible ... whatever the discount you are offering, half of that will be reimbursed to you by Flipkart,” a post said.
A Flipkart source said the incentives were compliant with Indian regulations and were aimed at promoting sellers’ earnings by effectively reducing the commission they pay.
All India Online Vendors Association, whose 3,500 members sell products on various online platforms including Flipkart, in a statement said fewer than 100 of its members benefitted from Flipkart’s partial discount funding, giving some sellers an unfair advantage.