Skift Take

The Singapore government is at it again — but as previous travel corridors have shown, it's risky business.

After building the world’s tallest indoor waterfall, Singapore’s Changi Airport has its eyes on another first: a business hotel bubble.

Starting next year, Connect@Changi — purpose-built accommodation at nearby exhibition center Singapore EXPO & MAX Atria — will allow local and international travelers to conduct meetings in what it bills as a Covid-free environment.

The government is offering the “test-stay-work-meet” experience to accelerate the resumption of regional and international business activities, but like most bubbles that emerged in the pandemic it’s prone to burst.

A Government Stamping Its Mark

Behind the facility is a consortium led by state-fund Temasek that includes The Ascott, Changi Airport Group, Sheares Healthcare Group, venue management and consultancy SingEx, plus architect Surbana Jurong (owned by Temasek).

In the first quarter of next year there will be 670 rooms and 170 meeting rooms. That will later to expand to 1,300 guest rooms and 340 meeting rooms. Standards will be the equivalent of a four-star hotel.

Temasek is also Singapore Airlines’ majority shareholder. In March, the fund said it would underwrite the sale of shares and convertible bonds for up to $11 billion. The airline will also be the first airline to trial the International Air Transport Association’s Travel Pass digital health passport on routes across Indonesia and Malaysia.

The state fund is clearly after some kind of return on investment here.

While the scheme taps into the growing trend of business traveler-designed hotels, as well as airport cities, the ambitious concept has limited appeal to those destinations now battling rising Covid-19 cases. It’s also a risky move as mutant strains of the virus begin to appear.

Feasible When Contained

On paper, corridors, fast lanes and bubbles sound ideal, but they’ve been hit and miss this year, and deemed as unfeasible during an uncontained pandemic by some experts — or at least until a vaccine is in greater distribution.

Take the the U.S. and Mexico. They have a merged economy of sorts due to the overlap between San Diego and Tijuana at the California/Baja California border. This led business and political leaders of both countries, pre-pandemic, to promote free trade zones along the border and even attempt pro-business borderless initiatives to capitalize on the synergies of the two cities.

Such a plan could theoretically evolve into a U.S. business travel bubble with Mexico.

“It’s almost a Heathrow airport-style central meeting place and everyone could go back to their country without the added border logistics,” said Channing Henry, managing director at PKF Hotelexperts. “I could see that becoming a Covid-free zone, but to undergo the infrastructure requirements for conferences while we are rolling out vaccines would likely be onerous.”

Those interviewed for this story see the merit in attempting a business travel corridor or business traveler-only hotel and conference center network as a motive to revive the struggling sector of the industry. But each expert noted these travel lanes work best in markets that have contained the virus like China or have fewer global entry points like New Zealand and Singapore.

“What Singapore is trying to do is admirable. It’s hard but admirable because, at some point, we’re going to have to try and get business travel back,” said Leora Lanz, chair of the graduate hospitality program at Boston University. “For the U.S., it’s such a different situation that it’s too complicated to make it work, unfortunately. Because of the varying state regulations and guidelines and the numerous points of international entries, this would be a much more complicated logistical situation in our country.”

Going Against the Flow

There is a business case in developing business traveler bubbles around airports, especially in heavily visited markets like New York City and Los Angeles. But experts cautioned, while possible, it would be a logistical nightmare to attempt a so-called “Covid-proof” quarantined lane for business travelers in an environment where flights from around the world converge at an airport’s customs facilities.

“Could it be done? Most certainly. Hotels today are not as occupied as much as they were in the past, and convention or airport hotels structured for business travelers could be established for that,” said Aaron Jodka, a managing director of research and client services at Colliers International. “But it would be hard to create that quarantine bubble-like environment given the nature of travel in the U.S., which is free-flowing in normal times and creates added challenges and hurdles. The main question I have is the true need for this.”

Companies may value face-to-face meetings over virtual ones, but the extended pandemic created an environment where business can still get done via Zoom. Given that multiple vaccines are in early stages of distribution, there may not be a pressing need to roll out an array of niche hotel products at a time when things could begin a return to normalcy by the second half of 2021.

“Before you see a meaningful recovery, you have to have the virus under control,” said Nicolas Graf, associate dean at New York University’s Jonathan M. Tisch Center of Hospitality. “I don’t think the U.S. could do a bubble.”

While the concept is intriguing, the logistics of making it work would be hard, Jodka said.

“There’s a concern of being that company that got people together and something goes wrong,” he added. “Do you want to deal with that PR?”

A Competitive Edge If Nothing Else

However, as the consortium shows, some are willing to take the risk. With serviced apartment provider The Ascott involved, what do other business-friendly hotel developers think?

“I think it’s an amazing idea to facilitate business travel, even during a pandemic,” said Will Lucas, founder of Mint House. “At this point, we’re focused on city centers, as opposed to airport hotels, but it certainly does make sense given who our customer is for that to be in our roadmap at some point down the line,” Lucas added.

CitizenM already has a presence at Schiphol Airport in Holland, and Paris Charles de Gaulle Airport in France, and targets locations next to company headquarters. It said it was actively looking for more opportunities with a focus on major intercontinental airports with a hub function.

“Before Covid-19, we saw the trend of creating airport cities, combining the airport and its facilities with grade-A offices and logistics, making use of synergies. This also enables airports to diversify their income model and thus risk,” said Meindert Jan Tjoeng, development and investment managing director, CitizenM.

Networking platform Urban Hub says the airport city concept is a response to the huge number of travelers and the increasing time they spend in terminals. “It speaks to the many transport-related or international businesses setting up in close proximity. These hubs are economic powerhouses generating jobs, revenue, and infrastructure,” it said.

Airports are no longer just locations where aircraft land and depart, according to according to engineering firm WSP, which was involved in planning the airport city at Hamad International Airport in Doha, Qatar. They are destinations where businesses grow, people live and development flourishes.

U-Tapao International Airport near Pattaya, Thailand, is also being transformed into an airport city.

“We still need to see what the impact of Covid-19 will be on this trend,” added Jan Tjoeng. “An airport hotel is, for now, still fully dependent on airline passengers.”

When airline passengers do return, destinations that invest in airport cities, and secure hotels, could treat them as insurance plans for future pandemics. On December 7, the World Economic Forum announced it was switching its 2021 annual meeting to Singapore instead of Switzerland due to rising coronavirus infections.

The decision wasn’t a direct result of Connect@Changi, which would be too small to host such a major event, according to reports. But the airport is in discussions with the World Economic Forum on logistical arrangements.

Singapore’s government said applications to stay at Connect@Changi will open in the middle of January 2021, and travellers will be able to check in by the end of the month.

Only by then will it know if this latest masterplan has any meaningful impact, or if it needs to go back to the drawing board.


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Tags: changi airport, charles de gaulle, citizenm, coronavirus, schiphol, singapore, singapore airlines

Photo credit: An artist's impression of Connect@Changi, a purpose-built facility designed for Singapore and international travellers to conduct business in a Covid-free environment. Connect@Changi

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