Hostels

Singapore backpacker hostels struggle to keep afloat amid COVID-19

Mr Adler Poh said hostel operators could not afford to support the business until tourism resumed. The Straits Times / Asia News Network / SHINTARO TAY, MARK CHEONG

SINGAPORE – Staycations is ringing cash registers at local hotels amid the pandemic, but hostels are in the cold.

The owner of the hostel, Jacquelyn Chan, summed it up in a few words: “Who goes to hostels for the holidays? We don’t get anything out of it. ”

Ms Chan, 36, director of The Hip and Happening Group, owner of the Rucksack Inn, said the battle to keep her 160-bed hostel afloat has been tough since tourist arrivals dried up at the start of the year. year.

International visitor arrivals to Singapore have reached an all-time high as worldwide travel restrictions hampered the once-thriving industry.

There were 1.69 million visitor arrivals in January, but it has become a trickle, with just 750 in April and 880 in May.

A $ 45 million campaign by the Singapore Tourism Board (STB), Enterprise Singapore and Sentosa Development Corporation was launched last month to encourage domestic tourism, with offers of hotels, restaurants and attractions.

Some hotels that have since reopened with secure distancing rules have reportedly been fully booked for stays, especially on long weekends.

But backpacker hostels don’t have a piece of the cake, Chan said.

“This is our cry for help. We feel like we have been left to fend for ourselves. “

Chan partnered with two other hostel owners, David Seah and Adler Poh, in April to form the Singapore Backpacker’s Hostel Alliance.

Regroup

The group discussed its specific needs with agencies like the STB, but Mr Seah, 46, said nothing concrete had come out of the talks.

Hostel owners say there is a real risk they will go bankrupt before international tourism returns.

The owners have injected money and manpower to adhere to the safety measures necessary to combat Covid-19, such as ensuring more frequent cleaning and staffing counters 24/7.

They also cut occupancy rates in half to comply with guidelines.

Mr. Seah, owner of The Bohemian, Chic Capsule and Backpacker’s [email protected] Little Red Dot, said the alliance allows a “vulnerable” segment of the tourism industry to amplify its voice.

The alliance now has around 40 hostel owners who manage around 50 properties, making up about 60% of the roughly 9,000 hostel beds here, he added.

The Hotel Licensing Board has noted that there are 57 hostels registered here.

But Mr Seah said there are more, as not all hostels or capsule hotels are registered with the board. To his knowledge, at least three hostels closed during this period.

“If this continues, there is no way we can stay afloat. I earn just enough to pay the rent and my employees, ”said Seah, who hasn’t received a salary since the start of the year and lives off his savings.

Fewer beds and lower rates

Like many other hostels, Ms Chan’s hostel mainly caters to Malaysian workers who cannot return home due to travel restrictions.

Most are either hosted by their company or have approached the hostels on their own while looking for a place to stay.

“Some hostels have ties to construction companies, so when they get leads on such groups, they share them.

“So it’s up to us to help each other and find business,” she said.

But this group, which currently makes up around 90% of all hostel occupants, are not expected to stay for long as cross-border movement slowly begins to pick up, Chan said.

She added, “It’s pretty scary living month to month. We can’t plan ahead and the changes are so unpredictable.

To cut costs, she put some of her employees on unpaid leave, and she also had to step in to clean the toilets and make the beds.

Some hostels have also reduced their rates by up to 70%, as Malaysian workers are unwilling to pay daily rates of up to $ 50 a night, said Mr Poh, 32.

Mom-and-pop owners

Most, if not all, hostel operators are small and medium-sized businesses or “family owners,” said Poh, who runs the 40-bed Adler hostel.

They don’t have the deep pockets to support the business until international tourism picks up, which won’t happen so soon, he added.

Mr Poh noted that some hostel owners were unable to obtain bank loans as they were deemed risky, being in the tourism business.

Mr Seah also said most hostels were either fair or at a loss, largely supported at the moment by government initiatives such as the Jobs Support Scheme (JSS), which helps co-finance employee salaries. local.

The JSS is expected to end this month.

Government assistance

STB’s hospitality and industry workforce director Tan Yen Nee told the Sunday Times that in addition to measures like JSS, he waived licensing and renewal fees for licensed hostels. until the end of this year, and provides grants to encourage staff development and innovation.

The alliance has called for the 50% occupancy cap to be lifted and for authorities to consider generating temporary savings for them, such as the way hotels are used as dedicated notice-of-stay facilities. residence.

But the STB has taken a more cautious approach for places like hostels where large groups are likely to meet in confined spaces for extended periods of time, Ms. Tan said.

“It’s about reducing the risk of a resurgence of community transmissions. Therefore, it will take more time before the safe management measures for backpacker hostels are relaxed and they can accept reservations for leisure. We will… review these measures accordingly, ”she added.

Although hostels do not contribute as much to tourism revenue as large hotels, Chan said the niche sector has helped shape the industry.

“I think we’ve added value by catering to travelers who want to stretch their money. Singapore cannot lose the flavor we bring to the industry.

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