F1 Levy Beginning in 2008 Allows Hotels to Keep Significant Upside

PRESS RELEASE F1 LEVY BEGINNING IN 2008 ALLOWS HOTELS TO KEEP SIGNIFICANT UPSIDE

Following consultation with the Singapore Hotel Association (SHA), the Ministry of Trade and Industry (MTI) has decided on the following rates for the Formula One (F1) levy on hotel room revenues:

a.30% of the total revenues from rooms and room packages for trackside hotels; and

b.20% of the total revenues from rooms and room packages for all other tourist hotels[1].

The F1 levy will be effective for a period of five nights. For the first F1 race to be held in Singapore on 28 September 2008, the five-night period will be from Wednesday (24 September) to Sunday (28 September).

Based on the current circuit design, the trackside hotels for 2008 are:

a. Swissotel The Stamford, Singapore

b. Raffles The Plaza, Singapore

c. The Pan Pacific Hotel Singapore

d. The Fullerton Hotel

e. The Ritz-Carlton, Millennia Singapore

f. The Oriental Singapore

g. Marina Mandarin

h. Raffles Hotel

i. Conrad Centennial Singapore

j. Carlton Hotel

k. Peninsula-Excelsior Hotel

The list of trackside hotels will be revised, if necessary, when the circuit design is finalized with FIA approval.

In setting the F1 levy rates, MTI is mindful that hotels should still be able to keep a significant share of the upside. However, as the F1 race in Singapore will be held on a street circuit, some hotels are likely to benefit more from the event than others due to their proximity to the circuit or because their rooms have a good view of the track. As such, these trackside hotels should contribute more towards the organization of the race.

In May this year, Minister of State for Trade and Industry, Mr S. Iswaran, had announced that hotels would be making such a contribution through a levy to defray some of the cost of staging the F1 race in Singapore. It is common for hotels in F1 host cities to be near full occupancy and to raise their room prices by up to two to three times during the race period because of the high demand. Similarly, hotels in Singapore are expected to be key beneficiaries from Singapore’s hosting of the race.

MINISTRY OF TRADE AND INDUSTRY

13 AUGUST 2007

[1] Tourist hotels include all hotels previously gazette for purposes of collecting cess. New hotels deemed to be tourist hotels will also be required to make a contribution via the F1 levy.