Transforming The Hotel Industry For Sustainable Growth

The Hotel Industry Transformation Map (ITM) was launched today by Mr S Iswaran, Minister for Trade and Industry (Industry).

Four strategies were identified to transform the hotel industry for sustainable growth. They are: building manpower-lean business models; developing new solutions through innovation; growing businesses through internationalisation; and building a strong pipeline of quality talent.

The Singapore Tourism Board (STB) developed and will implement the Hotel ITM, in partnership with the Singapore Hotel Association (SHA), Food Drinks and Workers Allied Union (FDAWU), the Hotel Sectoral Tripartite Committee as well as other agencies such as Workforce Singapore (WSG) and International Enterprise (IE) Singapore.

"The Hotel ITM is key to ensuring that Singapore’s hotel industry stays abreast of consumers’ changing needs and sustainably thrives amid our manpower-constrained landscape. It is also an example of how the government, industry and its stakeholders can achieve more when we work together. We strongly encourage the industry to participate in the initiatives under the ITM," says Mr. Lionel Yeo, Chief Executive of STB.

Build Manpower-lean business models and innovate to develop new solutions

One key strategy for transformation is to develop manpower-lean business models that are productive. To support hotels which are constrained in adopting productivity solutions due to building legacy infrastructure, STB launched a time-limited hotel retrofitting grant this April. Hotels can apply for this grant to redesign their premises to unlock productivity gains. One such case study is Shangri-La Hotel Singapore (see Annex B).

Hotels should also build up capabilities in lean operations and measurements. A Lean Hotel Initiative developed by STB, WSG and McKinsey & Company will guide hotels to identify and implement productivity initiatives as well as build capabilities towards manpower lean operations. It is expected that 16 hotels will embark on this programme early next year.

Additionally, the government, industry and solution providers will develop solutions to transform guest experiences and business processes. One example is the use of RFID technology in hotels to manage uniform and linen, which has led to average man hour savings of up to 60 per cent.

The industry is also taking the lead to find new solutions to overcome industry pain points. To ideate and develop solutions, the Hotel Innovation Committee (HIC) led by SHA was set up in February this year. The HIC will look into piloting industry wide initiatives that leverage on economies of scale.

Grow Businesses through Internationalisation

The outlook for global travel and tourism continues to be positive. Between 2010 and 2030, it is forecasted that international visitor arrivals globally will grow at 3.3 per cent per year, and at 4.9 per cent per year¹ within the Asia Pacific.

To capture these growth opportunities overseas, the Hotel ITM will support Singapore hotels in their internationalisation efforts. As Singapore hotels develop lean business models locally, their ability to operate with lower cost and manpower can become a source of competitive advantage overseas. The hotels’ internationalisation efforts will in turn generate economic linkages and more good jobs in Singapore in the hotel industry and other adjacent industries such as F&B and Retail.

Build a strong pipeline of talent and Deepen Skill workforce

To build a strong pipeline of talent and a future-ready quality workforce, several initiatives have been rolled out, including the Professional Conversion Programme for Professional Executives (Hotel Industry), the Skills Future Earn and Learn Programme, and most recently, the SkillsFuture Study Awards for the hotel industry.

A Hotel Career Campaign will also be carried out to galvanise awareness of good hotel jobs and careers. It is slated to start in the first quarter of next year. The SkillsFuture Leadership Development Initiative will also be launched to support aspiring Singaporeans in acquiring leadership competencies and critical experiences.

"Today, the hotel industry employs about 33,000 workers. The transformation of Singapore’s hotel industry is critical to ensuring that it will continue to grow and offer quality career opportunities for all," says Mr Yeo.

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