Perceptions and balance sheets

Oh Singapore, I am not quite sure that you quite get the concept of what Formula 1 is supposed to do for your country. Stop for a minute and think about why the racing is coming to town. Is it because Singapore has long had an image problem and does not attract as many tourists as the government wants to have? Could it be that the image of Singapore is skewed by eccentric laws regarding things such as chewing gum and flushing public toilets, and that these have caused the country to be lampooned as being a "nanny state" which canes the bad guys, but oddly not the bad girls?

Why not ask that nice Professor Google. He is bound to know.

"Singapore has a partly deserved reputation for sterile predictability," Google says. "This has earned it snickering descriptions like William Gibson's 'Disneyland with the death penalty' or the 'world's only shopping mall with a seat in the United Nations'. Nevertheless, the Switzerland of Asia is for many a welcome respite from the poverty, chaos, and crime of much of the Asian mainland, and if you scratch below the squeaky clean surface you'll find more than meets the eye."

Well, we shall see. I have to admit that I am rather excited about the Grand Prix. I have alway passed through Singapore and never bothered to stop. This is because I was never very attracted by anything on offer (Hong Kong always seemed more exciting) and because in my family folklore Changi was not a major international airport, but rather a rather nasty prisoner of war camp from which Uncle Kenneth never really recovered.

Having met the race organisers in Singapore I am sure that we will have a terrific weekend and we can only hope that the idea of night racing for Formula 1 is a success. There is really no reason why not, if F1 drivers can drive in conditions like we saw at Monza, the darkness and the rain should be OK. I am slightly worried about lights and spray combined, but that is why they invented F1 race director Charlie Whiting, so that someone takes the decision as to what is safe and what is not safe.

Anyway, according to some local minister, the Grand Prix is designed to "expose Singapore to a very different audience from that in the business and financial world" in order to "bring about broader tourism benefits and spill-over gains for associated industries".

In other words, the government wants people to bring money to Singapore - and go home without it.

That is quite normal for a Formula 1 race and we would not have any international races if those involved did not want such things. The skill is to do that without allowing people to feel they are being ripped off. When it comes to F1 there is a short-termist view that you double all the prices as a lot of people are coming to town and get everything you can get from them. There is also the long-termist view that you offer people value for money and they will come back - and tell their friends to go visit as well.

Singapore has clearly gone for the short-termist view and I think it will do them more harm than good.

There are good and bad ways of parting people from their money.

Let me quote an e-mail I received the other day when I wanted to change my room booking because flights turned out rather differently than planned.

"We do have rooms available for the night of 24 September 2008," they wrote. "The room rate for F1 season is S$600 inclusive breakfast and prevailing GST. Your booking from 25 September to departure on 29 September 2008 is confirmed; and is charged at last year room rate, S$261.08 inclusive breakfast and prevailing GST."

So they want to charge me more than double the rate I have for the weekend for the Wednesday night.

OK, I admit they are irritated that I booked my room before they knew there was a Grand Prix taking place (insider information is never a bad thing), and they are probably quite annoyed that I called their bluff when they tried to hike the price after the GP was announced. Journalists can do this because if they tell us to get lost, we can tell the world that they are robbers.

I was curious to work out exactly how much the F1 circus is going to be ripped off and so I went to the local tourist board and discovered that the Average Room Rate (ARR) from January to June 2008 was estimated at S$248. That is about US$175. It is not a bad price for a hotel room in a major city. However it is an increase of 29.6% over the average room rates in Singapore in the same period last year. Anyway, my hotel rate was S$15 over the average.

The tourist board also helped me to understand that Singapore is struggling for tourists. The average occupancy rates fell by 3.4% this year and tourism receipts are flat, despite the price hikes, which suggests that each tourist is paying more for the hotels but spending less on other things. The tourist board has already warned that the city may miss its target of drawing 10.8m visitors this year.

I am old cynic and I translated the e-mail I received as saying: "Dear Sir, Yes you can stay with us. We normally charge $261.08 for a room for a night. Because the Grand Prix has come to town we have the opportunity to rip you off, so we are charging $600 instead. We know that this is more than twice the price, but we don't care because supply and demand means that we can get away with it."

Now, having bashed away on a calculator for a bit I have concluded that I am thus paying is an impressive 142% hike. The hotel people will tell you that it is not just them and that the government is to blame for a special tax of "no more than 30% per hotel room" during the event, in order to offset the costs of revamping the Marina area. This may look great on paper at the end of a meeting but it looks lousy from an image perspective, as when people read columns like this one they may get the impression that Singapore is not really that interesting.

Oh dear.

Still, it is good news for the smart people with apartments to rent, Malaysian hotels and others who can provide accommodation without gouging the visitors.

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