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Beginner’s Guide on Starting a Hotel Business in Singapore
The COVID-19 pandemic has very much slowed down the business in the leisure and tourism industries. Indeed, any mention of starting a hotel business right now is likely to be seen as counterintuitive. However, a visionary entrepreneur may see opportunity rather than an obstacle – for this could also be a chance to innovate and apply pivotal strategies for success.
Singapore’s service sector remains the largest contributor to its gross domestic product (GDP), forecast to expand 5.1% in 2021. According to the Singapore Tourism Board (STB), the hotel industry is sustaining itself by diversifying strategies. Quarantine guests, staycations and green lane travellers are keeping the industry afloat until times get better. STB has also launched initiatives such as SingapoRediscovers, travel green lanes, etc., to support the industry.
In this guide, we explore a hotel business’ requirements as well as formal processes and procedures. We also provide some insights on how to turn the corner for your business towards successful bottom lines. If you need further assistance or clarification, get in touch with us at 3E Accounting Singapore.
What is a Hotel Business?
A hotel is a building or establishment which accommodates and serves paying guests. The hotel business is part of the hospitality industry, a category under the service sector. Hotels have various amenities and services that cater to their guests’ comfort. These include, amongst others:
- Room service, butler service and housekeeping
- Business centres, conference and meeting rooms and facilities
- Coffee houses, restaurants and meals
- City chauffeur and airport shuttle service
- Guided tours, etc.
Hotel categories encompass several factors such as ownership chain, size, location, rating, target market, etc. To get some idea of its flexibility, the following is a non-exhaustive list of hotel types and varieties:
- Airport Hotels, Business Hotels, City Centre Staycations, Resorts and Spas.
- Bed and Breakfast (B&B), Casino or Theme Park Hotels, Service or Self-Catering Apartments.
- Boutique Hotels, Heritage Hotels, Luxury Brand Hotels.
- Motels (for motorists and adjacent to highways), Boatels (houseboats, etc.), Rotels (cross border journeys via train), Floating Hotels (cruise ships, etc.).
Why Start a Hotel Business in Singapore?
Whether you are targeting ‘revenge travel tourists’ or ‘work from paradise executives’ starting a hotel business can be lucrative. This is especially so in Singapore, with its international acclaim as a must-visit tourist and business events destination. As a melting pot where East meets West, Singapore offers unique cultural experiences with world-class infrastructure and attractions. The city-state is also set to host several international events in the coming days.
As one of the best tourist destinations, Singapore offers travellers the very best in everything. Scenic views, amazing gastronomic delights, and a ‘green’ city experience await the discerning tourist. If you’re in Singapore for work, then the very best in connectivity and business suites are at your disposal. The hospitality industry here is undoubtedly vibrant and climbing towards better industry statistics.
Pre-pandemic levels of business in the hotel industry are slowly but surely making a cautious appearance. The hotel industry has received strong support from the Government via quarantine facility allocations, tourism vouchers, etc. Indeed, a weak market can be the best time to start and iron out issues before business booms. It’s a great time to try new technology, upgrade and refurbish, as well as streamline operations.
Requirements to Start a Hotel Business in Singapore
Starting any business in Singapore requires the registration or incorporation of your company. This is a fundamental legal requirement, without which compliance becomes an issue. Further, your business will not be able to take advantage of other benefits such as tax exemptions, etc.
The registration process is straightforward and available online via Singapore’s Accounting and Corporate Regulatory Authority’s (ACRA) business platform, BizFile. A SingPass is needed to log in; hence foreigners may need to hire corporate solution firms for this. 3E Accounting offers comprehensive and customisable solutions for all entrepreneurs via our Singapore company incorporation services. Our team of global professionals will ensure all your business affairs are in order.
Proceeding with the Company Incorporation in Singapore
You’ll need to register your company name with ACRA in accordance with its ‘naming rules’ and proceed with incorporation. Document submissions include the Articles and Memorandum of Association, directors’ and shareholders’ details, a registered business address, etc. Other steps consist of:
- Paying the relevant registration or incorporation fees.
- Registering with the Inland Revenue Authority of Singapore (IRAS).
- Acquiring a corporate bank account and business insurance.
- Buying or leasing premises, hiring and training staff and getting outfitted to start business.
Our guide to company registration offers a detailed explanation of the ins and outs of incorporation. Basically, you’ll need to start by choosing a suitable business entity such as a sole proprietorship or partnership. Alternatively, a limited partnership or limited liability partnership may be better suited to your needs. However, the most popular entity is the private limited company, while a public limited company will enable public listing.
Licences and Permits for a Hotel Business in Singapore
Getting approvals to own, and operate a hotel business, can be a lengthy process. Approvals start with the Hotels Licensing Board (HLB), a statutory body under Singapore’s Ministry of Trade and Industry. The HLB issues the Certificate of Registration and the Hotel-Keeper’s Licence, prerequisites to having a hotel business. To apply for these primary approvals, the following must be obtained after incorporating your company:
- Premises approval from the Urban Redevelopment Authority (URA).
- Approvals from the Building Construction Authority of Singapore (BCA).
- Approvals from the National Environment Agency (NEA).
- Clearance from the Singapore Civil Defence Force’s (SCDF) Fire Safety Department.
- Advertise in the local dailies – one English and one Chinese newspaper – within two weeks.
You’ll also need to hire top management for the position of Hotel-Keeper and submit their resumé. Usually, someone of a General Manager or Chief Executive Officer level holds this administrative post. Upon paying the licensing fee, you should get approval within three weeks.
Aside from this, you will also need to look into other licences and permits, such as:
- Halal Certification
- Advertisement Licence
- Licences and permits to sell Tobacco, Alcohol, Food & Beverages
- Public Establishment Licence and Copyright Permits
- Public Entertainment or Arts Entertainment Licence
- Non-Residential TV Licence
There are numerous other approvals to apply for – each with its own process. Erroneous applications can delay the start of your operations, not to mention being costly to correct. Your best bet is hiring a corporate service provider such as 3E Accounting to ensure proper compliance. You’ll have peace of mind and a lot more time to focus on running your business instead.
How to Grow Your Hotel Business
In the current pandemic-hit global stage, growth strategies need to evolve from mere recovery rollouts and marketing ideas. Fundamentally, the hospitality and tourism industries need to pivot and innovate, and this applies crucially to all hotel businesses. It’s not all about technology either but rather adopting a more holistic approach towards the whole hotel experience.
Technology is key though, especially touchless tech that automates processes and robotics in the service side of the business. Providing customers with apps and technology that facilitates social distancing and contact-less experiences is a game-changer. No more lengthy check-ins or -outs, touching doorknobs, phones, light switches, or even remotes to turn on TVs. Instead, equipping your hotel with digital assistants enables easy access to these functions with simple voice commands.
When constructing or renovating your hotel premises, consider focusing on an ‘all-inclusive experience’ rather than ‘opulent luxury.’ Design sustainability ties in with the wants of the future target market in a post-pandemic travel arena. Millennials and Gen Z want the complete holistic package, so ditch the fancy foyers and imposing marble receptions. Instead, flexible areas open to rearrangement, smooth indoor-outdoor transitions, en-suite mini gyms, and plenty of green spaces are trending.
While digital marketing is here to stay – i.e., websites, active social media presence – it needs some clever repackaging. Offer flexible packages and pricing that will prioritise your customers’ needs rather than simply selling the room. Solutions such as work-holiday-wellness hybrids are becoming popular – even throwing in some school-staycation avenues into the mix. Another idea is to offer subscription-type packages with competitive pricing – this may just turn the tide for your business.
As the world moves on, businesses need to adapt to remain competitive and survive in a constantly shifting arena. Starting a hotel business in Singapore requires vision, dedication, resourcefulness, and the ability to innovate. If this describes the entrepreneurial spirit in you, contact 3E Accounting today and make your dream a reality.