Written reply to PQ on productivity in tourism sector

Question :

Mr Desmond Choo: To ask the Minister for Trade and Industry (a) what is the progress in uplifting the productivity of the hotel industry; (b) how has the Business Improvement Fund helped companies in the tourism sector; and (c) what are the other plans to enhance productivity in the sector.

Written reply:

1. The Singapore Tourism Board (STB) launched the 1st Hotel Productivity Plan in 2011, to enhance productivity in the sector through initiatives such as driving hotels’ adoption of manpower-lean technology, encouraging sharing of best practices amongst hotels and redesigning of back-of-house processes. From 2011 to 2015, the nominal value-add (VA) per worker in the hotel industry increased at a compounded annual growth rate (CAGR) of 4.14%, which exceeded the national average CAGR of 0.95%.[1]

2. Building on this plan, the Hotel Industry Transformation Map (ITM) was launched in November 2016. One key strategy is to build manpower-lean business models through productivity. STB has made good progress in collaborating with other government agencies, as well as the industry, associations such as the Singapore Hotel Association (SHA), unions and workers, to implement initiatives under this strategy. For example, STB has worked closely with Workforce Singapore (WSG) and McKinsey & Company to develop the Lean Hotel Initiative (LHI), a four-month programme to guide hotels in identifying and implementing productivity measures. From April 2017 onwards, hotels participating in the LHI will undergo training in lean operations, as well as on-the-job coaching by McKinsey consultants.

3. The Business Improvement Fund (BIF) was enhanced in April 2015, and aims to support tourism companies in areas such as technology adoption and enhancement of business processes, to boost operational efficiency and improve competitiveness. Since 2015, the enhanced BIF has supported 93 projects across different industries.

4. For instance, the hotel industry has tapped on BIF to implement Radio Frequency Identification (RFID) technology for inventory management and robotic deployment in housekeeping functions, to reduce the reliance on manpower. Similarly, the Meetings, Incentives, Conferences and Exhibitions (MICE) industry has used BIF to develop event management solutions for better operational effectiveness.

5. There are several on-going plans to enhance productivity across the tourism sector, such as the launch of a Travel Agent Roadmap in August 2016, which seeks to enable the travel agent industry to overcome manpower constraints and low technology adoption through various initiatives. As different tourism industry partners have different needs, STB will continue to work closely with them to build their capabilities to achieve better productivity gains.

[1] Source: MOM/CPF and MTI/DOS. The 2016 data is not available yet.