A STUDY OF BUDGET ACCOMMODATION IN SINGAPORE: DEMAND AND SUPPLY

Abstract

The accommodation industry forms one of the three fundamental pillars in tourism and while many studies have been done on gazetted hotels; few have been done on budget accommodation. With changes in global economic conditions and peoples' lifestyles and values, budget accommodation can no longer be viewed as insignificant hotel products and have a definite role in offering diversity and range in prices, facilities and services at the lower end of the market spectrum. The objective of this study is to find out more about the future of budget accommodation in Singapore and to learn more about tourists' perceptions on this kind of accommodation. The findings of the study show that for the next 5 years, there will be an excess demand for rooms in both gazetted and non-gazetted hotels. This would mean that there would be a need to build more hotels or increase the number of rooms. From a survey done with 200 tourists in Singapore, it was found that tourists generally have a positive perception of budget accommodations. They were more likely to stay in budget accommodation that were located near shopping districts and were willing to pay up to S$59 a night. The analysis of the survey also showed that the main 3 factors that tourists took into consideration when choosing a budget accommodation to stay in was "service quality & security", “price & location" and “design & reputation". The importance of the factors “security’’, “location’’ and “comfort’’ have also been found to change the most with changes in socio-economic variables. Through the analysis of the future of the budget accommodation sector in Singapore and the factors that are important to tourists, this study hopes to give developers an idea of what to take note of when venturing into this sector and whether opportunities exist for them.