As one of the world’s most active business hubs, Singapore offers a robust environment for hotels and other hospitality businesses. In this article, we’ll take you through the step-by-step process in setting up your hotel business in Singapore as well as the various requirements and permits needed to operate the business.
Why Start a Hotel Business in Singapore?
Singapore is known for its bustling economic hub, and the sunny, tropical climate. These two factors create a constant influx of tourists in the country – whether they’re leisure tourists, or entrepreneurs on official business trips. The more tourists flying in and out the country, the higher the demand for hotels and accommodation in the area.
Singapore is no exception. In 2018, the country got over US$20.42B profit for tourism, with approximately 19.1M tourists per year according to 2019 data. Tourism declined over the years due to the global pandemic, but Singapore’s economy is quickly bouncing back, as well as its tourism sector. There is room for growth for hotel businesses in the country as Singapore puts focus on its tourism sector.
Besides an available market, starting a hotel business in Singapore can be a lucrative venture due to a number of factors. Local tourism is on the rise in the country following international flight restrictions during Covid lockdowns, and the country is also providing convenient services to “business, official, and high economic value travellers.”
How to Set Up a Hotel Business in Singapore?
Step 1: Create a Business Plan
The first step in setting up any business is to create a solid business plan. This includes all the specifics of the hotel, the number of rooms, the scope of services provided, hotel amenities suppliers, and more. Creating a detailed business plan will help with company registration and financing later on.
Included in the hotel business plan should be a shortlist of construction companies, suppliers, manpower services, and designers who will tackle the construction and operation of the hotel as it is being established. Planning for a hotel can take months or even years to complete, so it is best to start much earlier than the projected time frame.
Step 2: Choose a Location
Next, choose a location where the hotel will be built. Consider locations that have a high density of tourists, such as near business hubs, tourist attractions, theme parks, train stations, and malls. These areas have the highest chances for hotels to attract guests, and fill up rooms quickly. Avoid areas that are quiet, dim, and experience little foot traffic.
Step 3: Register the Company
Next, register the company through BizFile+. Here you will need to register the business name, which is typically the same name that will be used on the hotel’s storefront. Incorporate the company with the Accounting and Corporate Regulatory Authority (ACRA) in Singapore, and submit the necessary documents needed to incorporate the company:
- Company name;
- At least one resident director or shareholder;
- At least one corporate secretary;
- Registered address in Singapore;
- Detailed business plan;
- Memorandum and Articles of Association (MAA);
- At least SGD 1 in capital.
Besides registering with ACRA, the hotel business will need to obtain licences from different government authorities, depending on the business activities conducted in the premises. Licences needed are as follows:
- Hotel Licence: Singapore Tourism Board (STB)
- Building Plan Permits: Building and Construction Authority (BCA)
- Fire Safety Certificate: Singapore Civil Defence Force (SCDF)
- Food Shop Licence for the Hotel Restaurant and Cafe: National Environment Agency (NEA)
- Work Passes for Foreign Workers: Ministry of Manpower (MOM)
- Licence to Serve Liquor: Liquors Licensing Board
Apart from these permits are other regulations that the hotel business must comply with, such as data security for guest information and payment information provided to the hotel, employment permits, corporate documentation, and more.
Step 4: Finance the Business
Hotels are expensive to build, operate, and maintain. As hotels provide first-class facilities and services to guests, clients expect a level of quality during their stay. Financing the business helps with the initial investment of the hotel as well as the recurring costs from regular business operations.
There are multiple ways to finance a hotel business. One way, which is the most common way, is to convince shareholders and investors to put in capital for the business. Another way is to secure a loan from financial institutions, but this method requires the company to have a strong and detailed business plan, roadmap, and collateral.
Step 5: Build the Hotel
Once you have the finances backed up, you can then work with the chosen construction company to build the hotel. Work with the company to detail the number of floors and rooms of the hotel, as well as the specifications for each room. Work closely with the interior designer to ensure that the rooms are stylish, clean, and comfortable for guests.
Step 6: Hire and Train Staff
One of the most important factors in creating a pleasant hotel experience for your guests is the level of service provided by the hotel staff. Hire and train staff for the various work around the hotel, such as cleaning the rooms, cooking meals, providing concierge services, and more. Hotels often hire staff through manpower agencies to ensure trustworthy and skilled workers.
Step 7: Promote the Hotel
Before launching, it is important to consider promoting the hotel. This can be done through various media, such as digital marketing in social networks, paid advertisements in radio, TV, and paper advertisements, word-of-mouth advertising, and more. Go for advertisements that suit your target market.
Many hotels choose to partner with booking sites to provide visibility to their establishments as well. Booking sites have become increasingly popular among younger travellers as they offer discounts and promotions that optimise the price of accommodations, and provide reviews from other users who have stayed in the hotel previously.
Step 8: Prepare a Grand Launch
The final step is to prepare a grand launch for the hotel. The grand opening can be an intimate and private affair with only invited guests, shareholders, and members, but it can also be a grand event open to people outside the network. While the hotel is now up and running, the difficult part is just beginning as managing the business can prove to be challenging!
Set Up with Ease at WealthBridge
Unlike home businesses and retail stores, hotels require a number of licences, permits, and planning to set up as the business is in charge of numerous guests that stay in the premises. Focus on creating a positive impact with guests, and leave the paperwork to our team here at WealthBridge! With WealthBridge, you can streamline the opening of your business, and simplify your operations.
Check out our website for more information.