SINGAPORE - Singapore's hotel industry - which has been running high occupancies at record-breaking room rates - is finding itself the victim of its own success.
While hotels have chalked up significant growth since the 2009 financial crisis, securing enough staff to run operations in today's tight labour market is easier said than done.
Shrinking foreign worker quotas compound the problem of sourcing staff for less popular departments such as housekeeping, while the challenge of hiring enough Singaporeans can make it tough to stay under the dependency ratio ceiling (DRC). Higher foreign worker levies add to costs, which can take a bite out of profits if not properly managed.
With service being the backbone of the industry, the impact of the legislation is "very painful", in the words of Royal Plaza on Scotts general manager Patrick Fiat.
Being stretched for staff means it takes longer for the hotel to tend to guests when they check in or at its food and beverage (F&B) outlets, which understandably does not go down well.
This is exacerbated when the hotel hits occupancies in the region of 90 per cent (its housekeeping department has enough staff to cater for 75 per cent), which means employees have to work overtime.
Staff from other departments may also be called in from time to time to help with rooms - Mr Fiat himself being no exception. "It's not easy to change a (bed). Very complicated," he confided in French-accented English.
Meanwhile, the cost of the hotel's foreign worker levies has risen from $35,000 three years ago to $60,000 today.
In the first half of 2012, the industry-wide average room rate hit a new high of $260, while the average occupancy worked out to a robust 86 per cent, delivering a record revenue per available room (RevPar) of $224. 2H12 data has yet to be released but Cushman & Wakefield expects full-year occupancy for 2012 to come in at 88 per cent and the average daily rate at US$207 (S$254).
While not all hotels are understaffed, one of the often-sung refrains is that hoteliers are having problems filling certain jobs, especially when it comes to locals.