The International Hotel Law Review: Singapore
In a country starved of natural resources, tourism is a key source of economic revenue for Singapore. Visitor arrivals to Singapore were a healthy 11.1 million from January to July 2019, with Chinese tourists accounting for 20 per cent of the total visitors.
From a hotel trading and investment perspective, investors favour Singapore because of its stable and transparent financial and legal system (including a strong rule of law and intellectual property (IP) laws in Asia). To date, there are currently more than 68,000 hotel rooms in Singapore and this number is expected to increase by approximately 1,400 rooms by the end of 2019, the growth of which has been propelled by upscale, mid-scale and economy hotels. To add to the rosy outlook, Singapore saw an occupancy rate of 93.8 per cent in July 2019, the highest ever recorded in a month since the Singapore Tourism Board (STB) started tracking market-wide trading performance in 2005.2
Singapore has a vibrant and diversified range of hotels, from capsule hotels, budget and business hotels such as Yotel, to themed boutique hotels such as Pantone rooms in Wanderlust Hotel, to international brand named hotels such as the St Regis, the Capitol Kempinksi and Raffles Hotel. Home-grown hoteliers such as Banyan Tree and COMO have also fared well with resort-type offerings beyond Singapore's shores. One of the reasons for a thriving hotel scene in Singapore could be due to the ban on Airbnb, the vacation rental online marketplace company that has disrupted the hospitality scene. Short-term rentals are only allowed subject to a minimum stay of three months for private residential properties.3
In recent times, the hotel sector in Singapore has also begun to embrace digital transformation. Technology features strongly as a key aspect of the rejuvenation process, from self-check-in systems to housekeeping robots. With increased emphasis on cleanliness standards and social distancing in the wake of the covid-19 crisis, the reliance on innovation and smart technologies are likely to be taken up a notch – to include contactless reception services, keyless or facial recognition check-ins, virtual tours, and the use of ultraviolet light and electrostatic sprays to deep clean high-touch surfaces.4
Other trends include social media marketing, loyalty programmes, wellness tourism, co-living hotels and co-working spaces within hotels integrating hotel services as part of the membership packages in their amenities and offerings.
Generally, there are no restrictions on foreign investment for the ownership, development or management of hotels in Singapore. Foreign persons are able to purchase hotels (registered under the provisions of the Hotels Act (Chapter 127) detailed below) without approval under the Residential Property Act (Chapter 274) of Singapore.
Currently, there are also no foreign exchange control restrictions in Singapore. The property tax payable by a hotel is assessed at 10 per cent of their total annual value (AV). This total AV is computed by adding together the individual AV of the hotel rooms, food and beverage outlets, function rooms and other assessable areas.5
i Typical structures
The types of structures in Singapore are aligned with many other international standards and trends, including the following.
As the owners of the business maintain control and manage the day-to-day operations of the hotel, owner-operators also bear the financial risk and will also have to invest heavily in building up brand recognition.
Franchise arrangements are increasingly common as these are mutually beneficial: the franchisor (hotel brand owner) benefits from the franchisee's (owner) local experience and expertise within the specified territory. In turn, the franchisee is able to leverage off a franchisor's goodwill without itself having to expend years of marketing to promote the brand name.
In a recent franchise transaction, Global Premium Hotels Limited entered into a franchise arrangement with Accor to rebrand 15 of its hotels, adding another 1,621 rooms to Accor's portfolio.6
Real Estate Investment Trusts
Real Estate Investment Trust (REITs) buy, sell, own or operate real estate properties on behalf of its shareholders that are traded on the stock exchange. In Singapore, REITs are mandated by the stock exchange listing rules to:
- invest at least 75 per cent of a REIT in mature, income-producing properties;
- maintain not more than 45 per cent debt ratio of the value of the REIT's assets; and
- pay out at least 90 per cent of their income as dividends to shareholders.
In view of the requirements above, Singapore REITs are popular with investors as a steady and recurring income generator with an average dividend yield of 6.5 per cent, which is among the highest in the region.7
With compounded annual growth rate of 22 per cent over the past 10 years, Singapore has become a global REIT listing hub with 80 per cent of the Singapore REITs (S-REITs) having some or all their properties out of Singapore. Hospitality REITs in particular make up around 15 per cent of the total number of REITs trading on the stock exchange in Singapore.
The recent merger of two mammoth hospitality REITs in Singapore (Ascott Residence Trust and Ascendas Hospitality Trust) will see the combined REIT consisting of 88 properties (serviced apartments, hotels, apart-hotels) in 39 cities and 15 countries across Asia-Pacific, Europe and the United States, with a total asset value of S$7.6 billion.8
Aggregator business model
The aggregator business model (ABM) is one in which a company collects information and data about service providers and partners with service providers before selling the providers' services under their own brand. To ensure credibility and quality associated with its brand, the company must ensure that all its providers' services are of a certain quality and price by setting up certain terms and conditions.
As an asset-light business model, its value proposition is in the provision of a platform that both customers and service providers will use. Partners (whether service providers or customers) who wish to use the platform to enjoy the benefits of an aggregated database are obliged to abide by its terms and conditions.
In an ABM involving hotels, the company (as an aggregator) may rent the rooms from the hotels for a period of time, during which the company would redesign the room with its own furnishings. Thereafter, it would resell the rooms to customers under the company's own branding. This benefits the hotel regardless of the occupancy status of the room, since it had already been paid in advance by the aggregator company. As for the aggregator company, it makes a loss initially as it is required to pay for the rooms and to provide its own inventory. Nevertheless, there are opportunities for them to generate revenue through commissions or take-up rates.9
Singapore-based ABM RedDoorz recently raised US$70 million in a round of Series C funding in August 2019 to target budget travellers.10
ii Licences and permits for the operation of hotels
The operation of hotels in Singapore is subject to various laws and regulations, such as the Hotels Act, Chapter 127 of Singapore (Hotels Act) and the Innkeepers Act, Chapter 139 of Singapore. Pursuant to the Hotels Act and its subsidiary legislation, the Hotels Licensing Regulations (Regulations), any person who wishes to operate a hotel has to apply for a certificate of registration to use the premises as a hotel (Hotel certificate), and for a hotel-keeper's licence to enable the person to manage the hotel. The hotel must be registered as a company, business or limited liability partnership in Singapore with the Accounting and Corporate Regulatory Authority of Singapore (ACRA).
Prior to the application of a hotel certificate and hotel-keeper's licence, other conditions must also be fulfilled. In particular, written approval must be obtained in relation to the proposed premises of the hotel from the Urban Redevelopment Authority of Singapore, the Fire Safety Bureau of Singapore and the Building Construction Authority of Singapore. Within 14 days of submitting the application for a Hotel Certificate, the applicant must advertise in the newspapers in a prescribed form, so as to allow the public to lodge any objections to the grant of the hotel certificate. A pre-opening inspection will be carried out upon the receipt by the Hotel Licensing Board of all required documents. Checks will include a review of the furniture and fittings, reception counter area, security features, visible frontage and signage, as well as to ensure compliance with the terms and conditions set out by the various government agencies in their written approvals.
The hotel-keeper must be a resident in Singapore (either a Singapore citizen, permanent resident, or a holder of an employment pass) and must submit their resume for the application of a hotel keeper's licence.
iii Other licences and permits for ancillary operations
Other licences may be required by the owner or hotel operator as part of the hotel operations in Singapore. Much will depend on the actual ancillary services provided, but generally, these may include:
- approval for premises – if the intended hotel premises is a conservation building or has not been zoned for hotel purposes, approval from the Urban Redevelopment Authority or the Building and Construction Authority will be required, or both;
- public entertainment ad-hoc licence11 – to organise ad-hoc entertainment in any place where the public has access (for instance, music shows, fashion shows);
- public entertainment establishment licence12 – to organise public entertainment at the hotel premises (for instance, hotel bars, lounges, nightclubs, cafes);
- massage establishment licence13 – to operate a spa and offer massage services;
- money-changer's licence14 – to provide money changing services in the hotel premises; and
- tobacco retail licence15 – to offer for retail tobacco products at a physical outlet.
iv Noteworthy transactions
Commercial transactions relating to hotels have been quite vibrant in 2019 alone, with the sale of Andaz Singapore being the highest total price for a standalone hotel transaction in Singapore. Other noteworthy transactions include:
|Date||Property; No. of keys||Price (S$)||Price per key (S$)||Purchaser|
|May 2019||Ascott Raffles Place; 146 keys||353 million||2.4 million||Cheong Sim Lam|
|June 2019||Ibis Novena; 241 keys||170 million||705,400||S Alam Group|
|July 2019||Bay Hotel; 319 keys||235 million||736,700||Datapulse Technology-Pam Holdings|
|September 2019||Oakwood Premier OUE Singapore; 268 keys||289 million||1.1 million||Joint venture formed by Hong Kong financial services firm AMTD Group and Dorsett Hospitality International|
|October 2019||Andaz Singapore; 342 keys16||475 million||1.39 million||Hoi Hup Realty|
Source: Singapore Hotel Market Update 2019 by Jones Lang LaSalle for transactions from May to September 2019.17
Hotel lease terms in Singapore are generally in line with international standards.
However, one point that should be accounted for when drafting a hotel lease for Singapore is the statutory land use plan, also known as the Master Plan. Administered by the Urban Redevelopment Authority (URA), the Master Plan sets out permissible uses for land in Singapore. As it is necessary to obtain authorisation from the URA before carrying out development on any land in Singapore, it may be advisable to include such authorisation as a condition precedent or a warranty in the lease.
One trend worth noting is the recent rise of flexible space and 'space as a service', which is fast becoming a mainstream real estate asset class in Singapore with service providers such as WeWork, LendLease and JustCo operating within this space. In view of rising property values in the central business district area, hotels are looking to new revenue streams by converting underused parts of their property into flexible workspace. For instance, The Great Room, a flexible workspace provider, has opened a 1,400 square metre space in the Raffles Hotel, becoming the first co-working space in a 6-star hotel in Singapore.
From a hotel owner's perspective, combining conventional space with flexible workspace can potentially unlock value by maximising space usage and providing access to a growth market, all while boosting its revenue via rent from the flexible workspace tenant. Hotel owners interested in moving into this area can secure flexible workspace operators as tenants, but should take into account the profitability of those operators, and consider including more stringent covenants in these leases to cover risks.
Hotel owners seeking to lease a new property should also check whether the terms of the lease enable them to sublet parts of the property and ensure that the appropriate covenants are incorporated in the lease agreements, or that the mixed use is permitted under URA's zoning conditions.
The covid-19 pandemic has, however, thrown the traditional leasing model into doubt. With work-from-home arrangements continuing to be the default and no visibility for leisure travel in the near future, real estate owners and operators are holding back on taking up new leases or renewing existing leases. In Singapore, the government passed new laws18 and implemented measures barring landlords of non-residential real estate from enforcing the obligations in leases against tenants. Tenants are likely to rely on these laws for rental relief but access to relief is conditional on the tenant first informing the landlord of the impending breach. Once notice is given, parties should try to negotiate in good faith to reach a compromise. If parties are unable to reach an agreement, an independent third-party Assessor can be appointed to determine the applicable form of relief under the new laws.
Intellectual property and branding
i The significance of branding
Branding is particularly important for hoteliers. A brand identity is associated with quality, comfort and a particular level of service that is unique to the hotelier's offerings. Having a strong brand name also makes it more viable to work with a 'white label' management company to expand the business and grow a hotel chain internationally, and strengthen the relative bargaining power at the negotiation table.
As IP rights are largely territorial, a hotelier should put in place a robust IP protection strategy, both online and offline to protect its intangible assets, including its brands and technological assets. With recent challenges brought about by covid-19, hotels are now looking to other sources of income such as opting to be designated as quarantine or stay-home-notice facilities, targeting the domestic market with attractive staycation deals or even offering attractive dine-in or takeaway food and beverage options. As hotel brands expand into new business offerings, it should also ensure that its brand strategy is fully aligned to manage its risks and exposure.
As part of its IP strategy, it is important for the brand owner to register and protect these intangible assets in Singapore. Prior to entering the Singapore market and to minimise any risks of infringement or reputational loss, brand owners should conduct trade mark searches to identify any prior marks that may be in conflict with its proposed brand.
Trade mark registration is also beneficial as brand owners can rely on their registered rights to enforce against unauthorised use rather than rely on the common law tort of passing off, which is generally more fact-centric and difficult to prove. A registration is also a defence against infringement in Singapore.
ii Other types of relevant IP rights
In addition to trademarks, there can also be other IP rights such as designs, patents or copyright. For instance, if the hotel owner owns any proprietary designs for beds or furniture, they might wish to consider registering those designs in Singapore, if appropriate, to receive enhanced protection for those rights.
Where third-party IP is used in the hotel operations, appropriate due diligence should be undertaken to ensure that appropriate authorisations or licences have been obtained. In a recent incident, Hotel Indigo Katong Singapore, a boutique brand within the InterContinental Hotels Group (IHG), used illustrations belonging to an individual for an artist's impression for one of the hotel rooms as part of its pre-opening publicity materials without the artist's authorisation. The owner of the hotel, Katong Holdings, subsequently apologised to the artist and removed all related images online, but by that juncture, the hotel's faux pas was subject to public scrutiny and unnecessary bad publicity.19
iii Recent legal developments
There have been recent case law developments involving the hotel sector. Recent trademark oppositions involving hotel brands have demonstrated the strong support that Singapore courts provide to brand owners, as well as their sensitivity to market considerations unique to the hotel industry, thereby facilitating IP protection. This is consistent with Singapore's fourth position ranking in the International Property Rights Index 2019, while retaining its position as the top Asian nation with the strongest protection of IP rights.20
In Staywell Hospitality Group Pty Ltd v Starwood Hotels & Resorts Worldwide, Inc and another appeal  1 SLR 911, the Court of Appeal found that for the purposes of passing off, a hotel could generate goodwill in its brand within Singapore even if it had not yet conducted income-generating business activities in Singapore. 'Pre-trading activities' in Singapore, such as advertising, press releases, and entering into a hotel management agreement (HMA) for the running of the hotel, could be taken into account, if these evinced an unequivocal intention to enter the Singapore market.
In the more recent case of Starwood Hotels & Resorts Worldwide, Inc and Sheraton International IP, LLC v Staywell Hospitality Pty Limited  SGIPOS 11, the Registrar took a nuanced view of trends in the hotel industry when assessing trademark similarity, weaving in commercial realities by taking into account the proportion of Chinese-speaking tourists visiting Singapore over time.
Data and hotel tech
i Overview of data protection
In recent years, data protection has become one of the most widely discussed topics among businesses in Singapore. Individuals are becoming increasingly aware of their data privacy rights and the Personal Data Protection Commission (PDPC), which is the Singapore data protection regulator, has taken a relatively strict approach in monitoring and regulating personal data breaches. For example, the PDPC handed out a combined financial penalty of S$1 million to the Singapore public healthcare provider and its technology vendor for a serious breach involving the personal data of about 1.5 million patients, which is the largest financial penalty imposed by the PDPC to date.
With the increasing digitisation (e.g., replacing legacy IT infrastructure with cloud solutions) and greater adoption of technology (e.g., 'smart rooms', automated self-check-in, etc.) in the hotel sector, it is crucial that industry players place stronger focus on its data protection practices and policies to ensure the security of personal data in its possession.
ii Data protection in the hospitality sector
The overarching data protection legislation in Singapore is the Personal Data Protection Act 2012 (PDPA). Under the PDPA, organisations are generally required to notify individuals of the purposes of and obtain their consent before collecting, using or disclosing their personal data in Singapore. In a hotel franchise model where the responsibility for collecting personal data or databases may be shared between the franchisor and franchisee, providing proper notice and obtaining consent might become tricky. For example, a franchisor may be in breach of the PDPA if it uses any personal data that was improperly collected by the franchisee (e.g., without notice and consent). Therefore, such data sharing arrangements should be carefully considered by the parties beforehand and reflected in the relevant franchise agreements and policies accordingly.
Branding is a vital asset to hotel franchises and any publicised cases of data breach incidents or negative data handling practices would likely result in damage to a franchise's brand reputation. Therefore, it is important that hotel franchises put in place appropriate safeguards to ensure data security. Such safeguards should include both technical as well as organisational measures such as implementing proper employee policies and training. Apart from ensuring data security, it is also equally important for an organisation to ensure that it handles any data breach incidents carefully and promptly, as not doing so might similarly result in a public relations nightmare for the franchise. Therefore, hotel franchises should ensure that it has put in place a proper data breach incident response plan and that its employees are properly trained in handling such data incidents.
The large-scale global operations of major hotel chains would also inevitably entail a heavy flow of international transfers of personal data between intra-group entities. This creates additional challenges for hotel businesses as they would be required to ensure that such international transfers do not violate the data transfer or localisation requirements of the jurisdictions involved, especially where such requirements are overlapping or conflicting. Overcoming such legal restrictions would require a proper analysis of the data transfers to be made and ensuring that the necessary legal mechanisms and safeguards are put in place.
With careful planning and consideration of the potential issues, hotel businesses can fully reap the benefits that digital business has to offer while minimising the data protection risks that come along with it.
Franchising of hotels
There is no regulatory regime that specifically governs franchising agreements in Singapore. While the Franchising and Licensing Association of Singapore (FLA) has a Code of Ethics for franchising, this Code is binding only on the FLA's members, and membership to the FLA is entirely voluntary. The Code contains provisions on disclosure requirements, contracts regarding existing franchisees, proper selection of franchisees, provision of proper training and business guidance, standards of conduct, notice of breach, rights of termination and dispute resolution, among others.
Beyond the Code, there are no legally prescribed pre-contractual disclosure regulations, registration requirements, or mandatory clauses for franchise agreements. However, general laws such as the Unfair Contract Terms Act may still be relevant. If any contractual terms are considered unfair under the Unfair Contract Terms Act, they will not be enforceable. Contractual terms are considered unfair if they exclude or restrict liability of any person for death or personal injury resulting from negligence. In the event of other losses or damage, it is also considered unfair if the contractual term provides for an unreasonable exclusion or restriction of liability for such loss or damage.
In terms of common law, it is important to note that the duty of good faith has no general application in commercial relationships that are governed by the terms of a contractual agreement. Accordingly, franchisors and franchisees do not have an implied duty to act in good faith by virtue of the franchise agreement executed by them. However, a contract that contains an express duty to negotiate in good faith is likely to be upheld and enforced by the Singapore courts, as was held in HSBC Institutional Trust Services (Singapore) Ltd (Trustee of Starhill Global Real Estate Investment Trust) v. Toshin Development Singapore Pte Ltd.21
Hotel management agreements
Hotel management agreements (HMAs) usually cover longer terms with renewal options, and are usually heavily negotiated by both parties to include key terms such as financing by the owner, remuneration of the operator, parties' obligations, restrictions on the operators' decisions and so forth.
As with franchise agreements, there is no regulatory regime that specifically governs HMAs or IP licensing agreements. However, the general laws of Singapore as discussed above may still apply to HMAs.
Hotel owners and management companies should, in particular, take note that anticompetitive practices are prohibited under the Competition Act, which is administered by the Competition and Consumer Commission of Singapore. The Commission investigates practices that are intended to prevent, restrict or distort competition in Singapore, and has the power to impose financial penalties on offenders. In the recent case of Re Issues Infringement Decision against the Exchange of Commercially Sensitive Information between Competing Hotels,22 the Competition and Consumer Commission found that sales representatives from a number of different hotels in Singapore had engaged in agreements or practices to discuss and exchange confidential, customer-specific, commercially sensitive information in connection with the provision of hotel room accommodation to customers. The Commission found that such conduct was intended to prevent, restrict or distort competition, infringing the Act. Any attempt at reducing the risks of competition between hotel providers, including reducing information asymmetries inherent in consumer negotiations, would be found to have the subjective intention of restricting competition. Whether or not the conduct did in fact have anticompetitive effects was immaterial once this intent was established.
As part of a growing trend, HMAs may increasingly favour operators with a track record in providing a consumer-focused, experienced-based stay for consumers, for instance, operators who incorporate wellness, specialised restaurant offerings, the adoption of technology and flexible workspace in the hotel sector.
Integration between the flexible workspace and hotel sectors in the form of The Great Room at Raffles Hotel, for instance, provides the working space provider's members with access to an on-site hospitality team, conferencing, meeting facilities and club lounges, among other privileges. At the HMA level, a hotel owner could enter into an HMA with a management company that has the capabilities to operate parts of the property as flexible workspace, have the management company subcontract this function to an existing provider, or enter into a separate arrangement with an existing provider.
Businesses in Singapore may raise funds by borrowing (i.e., loans) or through the issue of capital markets products (which could include shares, debentures or units in a collective investment scheme). In this section, we will only focus on the former method, generally.
i Types of loans
Generally, loans can be categorised as term or revolving.
A term loan is a type of loan under which the loan amount and duration of the loan is fixed. After repayment is made, no further drawdowns are allowed under a term loan.
A revolving loan also has a fixed loan amount and duration but if repayment is made before the expiry of the facility, subsequent drawdowns are permitted. Revolving loans provide more flexibility to the borrower but come at a higher cost due to fees charged by the lenders.
A loan may also be categorised as a bilateral loan or a syndicated loan depending on the number of lenders. Bilateral loans involve one lender, while syndicated loans have multiple lenders. Syndicated loans are generally arranged for larger loan amounts for the lenders to manage exposure.
ii Common forms of security
Loans may be unsecured or secured. Common forms of security for loans in Singapore include (but are not limited to):
- statutory, legal or equitable mortgage over real estate (such as land, buildings or fixtures);
- fixed or floating charge or an assignment over accounts;
- assignment of claims and receivables;
- legal or equitable mortgage over certificated shares or book-entry securities;
- statutory assignment or charge over book-entry securities; and
- corporate or personal guarantees by the borrower or its shareholders in favour of the lender.
In the case of a bilateral loan facility, the security is provided to the lender while in the case of a syndicated facility, a security agent or trustee is appointed to hold the security on behalf of the lenders.
iii Key formalities and stamp duty
Certain charges created by a company incorporated in Singapore or foreign companies registered under the Companies Act (Chapter 50) of Singapore need to be registered with the ACRA within 30 days of the creation of the charge or within 37 days if the charge instrument is executed outside of Singapore. Failure to register the charge, shall insofar as any security on the company's property or undertaking is conferred, be void against the liquidator and any creditor of the company.
In the case where a legal mortgage is involved, this must be by deed and in the English language to satisfy the requirements under Section 53 of the Conveyancing and Law of Property Act (Chapter 61) of Singapore. Failure to comply with these requirements will render the conveyance of interest void at law.
An equitable mortgage over land must be in writing to comply with the formality requirements under Section 7(2) of the Civil Law Act (Chapter 43) of Singapore and be by deed for the mortgagee to avail it to certain powers set out in Section 24 of the Conveyancing and Law of Property Act (Chapter 61) of Singapore.
A statutory mortgage over land under the Land Titles Act (Chapter 157) of Singapore created in favour of the lender must be registered in an approved form.
Stamp duty of up to S$500 is payable for any mortgage or charge over immovable property, stock and shares.
i Labour trends in the hospitality sector
Being a manpower-intensive sector, there is heavy reliance on foreign manpower for hospitality staff – particularly frontline staff – in Singapore. Foreign employees in the hospitality sector generally require an 'S-pass'.23 There is a quota on the number of S-Pass holders a company can hire – S-Pass holders cannot exceed 15 per cent of the company's total workforce. This quota was due to be reduced to 13 per cent with effect from 1 January 2020 and further reduced to 10 per cent with effect from 1 January 2021. With tighter immigration policies, hospitality companies will need to manage with more careful manpower planning.
A commonly used approach towards managing manpower needs in the hospitality sector is to rely on labour hire companies and professional employer organisations to supply manpower. The use of such providers remains an unregulated area in Singapore. However, the common law risks of employee misclassification are inherent in such an approach; if the individuals supplied by such providers are deemed to be de facto employees of the hotel, the hotel faces liabilities under the Central Provident Fund Act, the Employment Act and Work Injury Compensation Act. In determining whether an individual is an employee of the hotel, the courts generally consider the parties' actual intentions, whether some framework of control exists, whether the services performed by the individual form an integral part of the hotel's business and method of payment.
ii Shift workers
Hospitality frontline staff are likely to be working shifts. Shift workers are not allowed to work more than 12 hours daily under any circumstances and the average number of hours worked by shift workers over any continuous period of three weeks cannot exceed 44 hours per week. Employers may substitute any continuous period of 30 hours as a rest day for staff working shifts.
Shift allowances are not mandatory under Singapore law. Singapore laws do not require standby time to be paid (but it is best practice to provide payment for standby time).
Manual workers earning up to S$4,500 pm and non-managerial or non-executive employees earning up to S$2,600 pm are statutorily entitled to overtime pay. Overtime pay is calculated as follows:
Hourly basic rate of pay x 1.5 x number of hours worked overtime.
iv Work injury compensation insurance
Work injury compensation insurance is mandatory for all employees doing manual work, regardless of salary level and for employees doing non-manual work, earning S$1,600 or less a month.
v Unfair dismissal
In April 2019, Singapore tightened its unfair dismissal regime by affording all employees (regardless of rank or salary grade) the statutory right to complain of unfair dismissal. Unfair dismissal claims are now brought before the Employment Claims Tribunal instead of the Ministry of Manpower. The definition of 'dismissal' has also been widened to include constructive dismissal by resignation. If the Employment Claims Tribunal finds that the dismissal was wrongful, the employer may be ordered to either reinstate the employee and pay the employee for loss of income due to the wrongful dismissal or pay the employee a sum of money as compensation.
Dispute resolution and management
i Dispute resolution mechanisms
As a key dispute resolution hub in the region, Singapore's robust institutional infrastructure offers invaluable support to international businesses seeking dispute resolution solutions. In addition to the Singapore International Commercial Court, the Singapore International Arbitration Centre and Singapore International Mediation Centre provide alternative dispute resolution options that give parties more flexibility and control over proceedings and outcomes.
The Singapore International Commercial Court
As a specialist commercial court, the ICC, launched on 5 January 2015, offers litigants the option of having their disputes adjudicated by a panel of experienced judges comprising specialist commercial judges from Singapore and international judges from both common law and civil law jurisdictions.
Enforcement of foreign arbitral awards in Singapore
Singapore acceded to the New York Convention of 1958 and subsequently re-enacted most of its provisions in Part III of the International Arbitration Act of Singapore. As a result, Singapore is bound by international law to recognise arbitral awards made in countries that are also signatories to the New York Convention.
Additionally, as Singapore belongs to the Commonwealth of Nations, it has enacted the Reciprocal Enforcement of Commonwealth Judgments Act (RECJA). Therefore, Singapore will recognise judgments made in the United Kingdom, jurisdictions that are part of the Commonwealth and other countries with which Singapore has reciprocal arrangements to mutually recognise and enforce judgments. Generally, an arbitral award from each of these countries will be enforceable in Singapore under the RECJA only if the award has become enforceable in that country in the same manner as a judgment given in its own courts.
The success behind Singapore's hotel industry is in part due to the strong support from various government bodies and prudent policy planning to grow the nation as a tourist hub and tourism as an economic revenue driver.
Apart from creating a pro-business infrastructure, helmed by a strong legal framework, the Singapore government has in recent years launched new initiatives to target new visitor segments to attract tourists, business visitors and the MICE industry to organise conferences and exhibitions in Singapore.
Hotels have also started to embrace smart technology to provide service offerings or focus efforts on sustainability to differentiate themselves from competitors. In 2017, STB and the Hotel Innovation Committee, spearheaded the Smart Hotel Technology Roadmap, to inter alia identify types of technologies hotels can adopt to increase efficiencies and productivity in their operations.24 STB has also launched the Tourism Development Fund to offer economic incentives in the form of grants to encourage hotels to adopt technology to redesign their business models to improve productivity, competitiveness, and to increase the attractiveness of Singapore to visitors.25
From chatbots and robot waiters26 to food waste management systems27 and loyalty programmes linked to mobile applications for self-help check-ins at hotels,28 innovation, aside from public policy will likely be the next frontier and market driver in attracting visitors to Singapore.
1 Lorraine Anne Tay is joint managing partner and Audrey Lim is a senior associate at Bird & Bird.
2 Singapore Hotel Market Update 2019 by Jones Lang LaSalle at page 4; see: https://www.jll.com.sg/content/dam/jll-com/documents/pdf/research/apac/singapore/jll-apac-singapore-hotel-market-update-research-report-2019.pdf">https://www.jll.com.sg/content/dam/jll-com/documents/pdf/research/apac/singapore/jll-apac-singapore-hotel-market-update-research
3 Short-term home sharing remains illegal in Singapore; Airbnb disappointed (published on 8 May 2019; updated on 2 October 2019), see: https://www.todayonline.com/singapore/short-term-home-sharing-remains-illegal-singapore-airbnb-disappointed">https://www.todayonline.com/singapore/short-term-home-sharing
4 Contactless service and cleaning robots: Here's what your next travel experience may be like (published on 8 June 2020), see: https://www.channelnewsasia.com/news/singapore/covid-19-travel-experience-hotels-contactless-service-12792376">https://www.channelnewsasia.com/news/singapore/covid-19-travel-experience-hotels
5 RAS e-Tax Guide – Property Tax: Guide for Hotel Owners and Operators (Second Edition); see: https://www.iras.gov.sg/irashome/uploadedFiles/IRASHome/e-Tax_Guides/etaxguide_PT_Hotel Assessments.pdf">https://www.iras.gov.sg/irashome/uploadedFiles/IRASHome/e-Tax_Guides/etaxguide_PT_Hotel per cent20Assessments.pdf. However, note that hotels that have been gazetted to pay for F1 Cess (in accordance with Singapore Tourism (Cess Collection) Act (Cap. 305C, 1997 Rev Ed)) during the period of the Singapore Formula 1 Grand Prix would have such cess excluded when assessing the AV of the hotel rooms. The list of hotels can be found in the Schedule of the Singapore Tourism (Cess Collection) (Formula 1 Singapore Airlines Singapore Grand Prix 2019) Order 2019.
6 Accor adds 15 hotels to Singapore network in a major deal with Global Premium Hotels Limited (published on 7 August 2019), see: https://press.accor.com/asia-and-pacific/accor-adds-15-hotels-to-singapore-network/?lang=en">https://press.accor.com/asia-and-pacific/accor-adds-15-hotels
7 Singapore – A Global Hub for REIT Listings by KPMG (published July 2019) (see: https://home.kpmg/content/dam/kpmg/sg/pdf/2019/07/singapore-a-global-hub-for-reit-listings.pdf">https://home.kpmg/content/dam/kpmg/sg/pdf/2019/07/singapore-a-global-hub-for-reit-listings.pdf).
9 https://www.feedough.com/aggregator-business-model/ (accessed 18 September 2019).
-budget-travellers-11821108 (accessed 16 September 2019).
11 Issued by the Singapore Police Force.
12 Issued by the Singapore Police Force.
13 Issued by the Singapore Police Force.
14 Issued by the Monetary Authority of Singapore.
15 Issued by the Health Sciences Authority.
16 Hoi Hup Realty to buy luxury Andaz hotel at Duo for $475m from M+S (published on 8 Oct 2019, see: https://www.straitstimes.com/business/property/hoi-hup-realty-to-buy-luxury-andaz-hotel-at-duo-for-475m-from-ms">https://www.straitstimes.com/business/property/hoi-hup-realty-to-buy-luxury-andaz-hotel-at-duo-for-
17 Singapore Hotel Market Update 2019 by Jones Lang LaSalle at page 5, see: https://www.jll.com.sg/content/dam/jll-com/documents/pdf/research/apac/singapore/jll-apac-singapore-hotel-market-update-research-report-2019.pdf).
18 COVID-19 (Temporary Measures) Act of 2020 (No. 14 of 2020) and COVID-19 (Temporary Measures) (Temporary Relief for Inability to Perform Contracts) Regulations 2020.
19 'Hotel in Katong lifts artist's work without his permission' (published on 10 December 2015, see: https://www.straitstimes.com/singapore/hotel-in-katong-lifts-artists-work-without-his-permission">https://www.straitstimes.com/singapore/hotel-in-katong-lifts-artists-work-without-his-permission) and 'Artist and hotel sort out copying of artwork' (published on 7 January 2016, see: https://www.straitstimes.com/singapore/artist-and-hotel-sort-out-copying-of-artwork">https://www.straitstimes.com/singapore/artist-and-hotel-sort-out-copying-of-artwork).
20 'Singapore keeps top spot in Asia for IP protection' (published on 19 October 2019, see: https://www.straitstimes.com/business/economy/singapore-keeps-top-spot-in-asia-for-ip-protection">https://www.straitstimes.com/business/economy/singapore-keeps-top-spot-in-asia-for-ip-protection).
21  SGCA 48.
22  SGCCS 2.
23 The applicable category of work visa for semi-skilled employees.
26 'Tech boost for hotel sector: Robots to support banquet crew, chatbots to take enquiries' (published on 8 November 2018, see: hhttps://www.todayonline.com/singapore/tech-boost-hotel-sector-robots-support-banquet-crew-chatbots-take-enquiries">ttps://www.todayonline.com/singapore/tech-boost-hotel-sector-robots-support-banquet-crew-chatbots-take-enquiries).
27 'Hotel turns food waste into fertiliser' (published on 17 Sep 2017, see: https://www.straitstimes.com/singapore/environment/hotel-turns-food-waste-into-fertiliser">https://www.straitstimes.com/singapore/environment/hotel-turns-food-waste-into-fertiliser).
28 'Take a selfie for automated check-in at hotel among technology to improve productivity in the sector' (published on 23 November 2017, see: https://www.straitstimes.com/singapore/singapore-tourism-board-to-unveil-technology-road-map-in-2018-to-help-hotels-become">https://www.straitstimes.com/singapore/singapore-tourism-board-