THE STRATEGY FOR HOTEL DEVELOPMENT IN SECONDARY LOCATION: CASE STUDY OF EXCELSIOR HOTEL

Abstract

Traditionally, hotel developments in Singapore are concentrated on the prime locations, the Orchard - Tanglin area. To cater to the increasing demand for rooms, hotels are developed not only in the surrounding areas such as River Valley, Tangjong Pagar but also in remote location such as Changi. The woes of the hotel industry were highlighted in the daily newspapers in 1984 when Singapore registered its first year of negative growth in visitor arrivals. This was the result of the imbalance in supply over demand in hotel room inventory and consequences of external environment. Global economic growth in 1987 brought about a rejuvenation of hotel developments in recent years. However, it is suspicious whether hotel development in secondary location would be successful given such a volatile environment. To ensure long-term survival, the hoteliers should be aware of the unique characteristics of hotel enterprise. It lies in the fact that the hotel enterprise is in the service industry, which forms part of the bigger tourism industry. Therefore, there is a need to identify the factors peculiar to the hotel and hotel enterprise generally. As the success of the enterprise would depend on the synchronisation of all the components. Thus, the hotel enterprise would need to assess the problems confronting the industry, evaluate its potentials and to research for a solution aimed at developing a structured approach to strategy making.