THE IMPACT OF TOURISM ON HOTEL DEVELOPMENT

Abstract

Little has been done on the relationship between the hotel development and the tourist industry. Hotels are important to Singapore because the tourism sector has a high value in the economy of the country. This study therefore attempts to examine the above relationship by investigating the factors that affect tourist flows to Singapore. The statistical results showed that the demand for tourism is highly income significant whereas the effects of hotel room rates and exchange rate movements varied from country to country. Having looked at the tourist and hotel industry from a macro level, the micro level focuses on the variables which affect hotel room requirements. These variables were used to forecast the demand for hotel rooms from 1988 to 1992, bearing in mind the Tourism Product Development Plan. Six scenarios were depicted by the author and all showed that a shortage of rooms will occur by 1992. Since there has not been any in-depth studies on the development of hotels, this study attempts to provide answers to two questions. What are the factors influencing international tourist flows to Singapore ? How does the tourist industry affect the development of hotels ?