Sustaining a Hotel Business during Crisis: A Singapore Luxury Hotel's Journey during COVID-19

Christina Lam, Zahidah Raimy, Yi Ling Teo, Valentino Tan, Yin Kai Ng, Johnathan Tan
Muma Case Review  •  Volume 6  •  2021  •  pp. 001-020
Richard Ang, a Singaporean general manager at Hotel J, aimed to be a strong leader during COVID-19 disruption. Richard sat in his office deep in thought as earlier in the day, he had attended a board meeting with his management team to discuss strategies, he wanted to ensure safety of in-house guests and employees whilst effectively managing cost to sustain the hotel business during the crisis. Leaning back in his chair, Richard thought to himself about the potential strategies presented by his team and the effectiveness of the current critical situation. Richard knew that this was not an easy decision to make, and how could he choose among the three options based on the uncertainty of the pandemic.

Hotel J enjoyed and experienced the prosperity of the economy in Singapore since it opened in 2015. Tourism business was continually growing and doing well, according to Singapore Tourism Statistics 2019, Singapore recorded a total of 18.5 million international visitors who came to Singapore in 2019, they spent a total of S$27.1 billion in 2018 (Singapore Tourism Board, 2019). With a strong inbound arrival, Hotel J kept running over 85% occupancy with a decent average daily rate (ADR) at S$460. Hotel J has grown to become one of Singapore's leading luxury hotels.

However, in early 2020, the spread of COVID-19 virus had caused many countries to implement nationwide lockdowns and restricted international travel to curb the proliferation of the virus. Singapore experienced a strong impact from this unprecedented event with the number of infected people increasing, fear of the unknown being unsettling, and unforeseeable disruptions to business and life in general thus leading to panic. As a result, the Singapore government imposed stringent measures in response. These measures include an increase in health, hygiene and sanitation measures, halting of social activities, compulsory donning of masks in public, and compulsory quarantine for anyone traveling to Singapore.

The Singapore government employed the help of hotels to act as quarantine facilities to house individuals returning from overseas who are required to take fourteen days Stay-Home Notice (SHN). Many hotels expressed interest in accommodating SHN guests, as this option offered hotels a source of revenue, due to the fact that the government remunerated the hotels accordingly. Thus, becoming an SHN hotel was a good option for Hotel J. After signing a contract with Singapore Tourism Board, Hotel J was employed as a dedicated quarantine / SHN facility and overhauled its amenities to cater to the safety measures set out by the government.

As COVID-19 infection rates in Singapore declined, the government began reducing stringent lockdown measures and to allow for small social gatherings. Additionally, hotels that were used as quarantine facilities could restart its F&B operations albeit restricted to serve in-house dining. This created a spur in the market where many hotels began to return to regular operations to recuperate losses incurred during the pandemic. Concurrently, the government offered Hotel J an extension of the SHN hotel contract until late 2021. Upon hearing the news, Richard gathered the team leaders to begin discussions on the possible strategies for Hotel J. The meeting ended at a stalemate where there was no conclusion on an agreed strategy and decided to adjourn the meeting to the following day.

As the general manager of Hotel J, the final decision on the hotel strategy lies with him. Richard must consider the pros and cons of each option thoroughly. If you were Richard, what would you decide?
COVID-19, Hotel Business, Luxury Hotel, Stay-Home Notice, Staycation, Singapore
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