Disconnect@Changi: How Singapore’s business bubble hotel quietly deflated

Bubble glamping at Jewel Changi, a more successful pivot

In February 2021, Singapore launched Connect@Changi (C@C), offering business visitors the tantalizing chance to brave pre-vaccine travel during the global COVID-19 pandemic, navigate a 12-step process more likely to cause than cure alcoholism, stay in a cubicle in a hastily converted windowless exhibition hall, meet visitors only through a wall of plexiglass, and get their brain tickled by a PCR nose swab test every two days. Singapore state media was dutifully boosterish:

“As the pandemic evolves, we must make the best use of technology and innovate. We must take this chance to reinvent ourselves and reimagine the future, for there is no going back to before,” said [Deputy Prime Minister] Heng, pointing to the Expo facility as a good example of how to do so.

[State investment fund] Temasek International joint head of strategic development Alan Thompson said the consortium is confident that there will be demand for Connect @ Changi, based on the number of inquiries it has received so far and its analysis of pre-Covid-19 business travel data.

Straits Times, 19 Feb 2021

Foreign media weren’t quite as enthusiastic:

Travelers can therefore get the worst bits of business travel – jetlag and air miles – but miss the perk of squeezing in some tourism or souvenir shopping.

The Register, 19 Feb 2021

A brief burst of follow-up news followed on March 9 when C@C checked in its first guests, notably including a Mr Olivier LeRoux from France, whose masked face can be spotted twice on the website’s top page, in this promotional review complete with video, and the press releases sent out for the occasion.

And after that, radio silence. In May, after a Delta cluster at Changi Airport, Singapore entered a new lockdown “Phase 2 Heightened Alert”. The facility was quietly “suspended until further notice” from May 28, and per the official website, remains “suspended” as I type this.

So during these 10 weeks, how many paying guests did C@C have? This CNA video, optimistically posted several weeks into the closure, reveals three tidbits: it had over 120 “bookings”, hosted “over 200 in-person meetings”, and most tellingly, the two-week suspension “affected about 13 guests”. (The video also notes guests “from even as far as France”, no doubt another nod to the intrepid Monsieur LeRoux.) C@C has its own Android app, whose Play Store stats reveal more than 100 but less than 500 downloads. Other evidence of visitors is thin indeed: the only actual trip report I could find was this story of a one-night stopover in the Financial Times, noting with a touch of British understatement that it “certainly did not seem overly busy during our visit”.

Putting these figures together, we can estimate that C@C checked in on average one guest per night, and if Mr LeRoux’s rather leisurely 4 meetings in 4 days is at all representative, those guests stayed for an average of two nights each. At the rack rate of S$384 per night (meals and transfers included), multiplied across 70 days, a ballpark figure for gross revenue would be around S$50,000.

We know that on opening day in March the project had 150 hotel rooms and 40 meeting rooms in Hall 7, scheduled to expand to 660 hotel rooms and 170 meeting rooms by May, eventually taking over all of Halls 7 through 10. This opening day media kit directory implies Hall 8 was used for at least some leisure facilities, and this CNA story from August claims Halls 7 & 8 each have a capacity of 660 rooms, for a total of 1320 rooms. Given the earlier average of two guests per night, this translates to an occupancy rate of 0.15% and a nightly revenue per available room (RevPAR) of $0.58. For comparison, the Singapore Tourism Bureau tells us the average hotel in Singapore had a pre-COVID occupancy rate of 86.1% and RevPAR of $186.10 in 2019.

That’s the income side, what did expenses look like? We have even less information to go on here, since as far as I can tell no financials have been disclosed, there are no public tenders accessible on GeBIZ, and activists raising awkward questions were met with legal threats. We can do some loose bracketing though: Halls 7 and 8 are 9,936 m2 each, which per the Building and Construction Authority’s estimate would cost $3,200-3,850/m2 to build out as a 4-star hotel, or $64 million dollars at the low end. BCA’s figure ignores land/rental costs, furniture and fittings, salaries, operating expenses etc, and I’m also assuming Halls 9 & 10 were never built out.

Now to be fair, that figure is for constructing a building from scratch, whereas C@C was built inside the existing Expo hall, which you’d expect to be much cheaper. However, according to this shiny promotional video from Surbana Jurong (with only 18 views, give it some love!), speed was key here, with the build completed in 14 weeks instead “3 years”, and that’s obviously going to drive up costs. What’s more, the chosen Prefabricated Prefinished Volumetric Construction (PPVC) aka “Lego block” approach is known to be 20% more expensive than regular construction, and the video calls out having to work within an existing building as being major headache, not an advantage, since you can’t (for example) use large cranes. Plus you’ve got the completely separated ventilation systems to build out. So cheaper, possibly; but 10x cheaper, unlikely.

As a sanity check on those figures, GeBIZ also reveals a tender (STB000ETT21000009) for “ADDITIONS AND ALTERATIONS” to Expo Halls 1-6, formerly used as a Community Care Facility, and while the details are password-protected, it’s public knowledge that the winning bid was just under $20M. (It’s also public knowledge that the 1990s-vintage ZipCrypto used for that protection is “seriously flawed” and can be easily cracked if the contents have known plaintext like, say, boilerplate-heavy tender PDFs, but that’s another story.) Dividing by 3 gets us $6.6M for two halls, but this estimate is almost certainly too low, since the original Expo CCF for workers was a much simpler facility (pictures here) closer to a field hospital than a 4-star hotel.

Nevertheless, assuming the expense is somewhere between these two benchmarks, the return on investment (ROI) on the project can be estimated to be somewhere between 0.0008x and 0.0076x. Oops?

At this point, it’s worth pausing to ask a simple question: how did they get this so very, very wrong? Obviously, I have no inside intel into the decision making that took place, but I strongly suspect it was a combination of two factors.

Saunas are awesome, hotpants are awesome, so sauna pants must be twice as awesome!

In most countries, the default instinct of bureaucrats is to do nothing. In corporatist Singapore though, where the state prides itself on being a business hub, the drumbeat from the Prime Minister down has been that “it is important for us to open up soon and allow more people to travel in and out of Singapore in a safe way“. It’s only when tasked with the conflicting objectives of allowing people to travel to Singapore, yet staying “safe” by not taking any risk of contagion in Singapore, that Connect@Changi starts to make any sense: we must do something; having people pay money to come to Singapore without actually entering Singapore is something that all bureaucrats involved can live with; therefore we must do it. Temasek justified the project through “analysis of pre-Covid-19 business travel data”, through which lens it’s a no-brainer: Singapore used to get 1.2 million visitors every month back in 2019, so if C@C can attract even 1% of that, surely they can fill 1200 rooms? Add in the label of “national resilience project”, get the government to bankroll it with no visible strings attached and hey presto, you’ve got a bubble hotel in three months.

The second factor is that in Singapore’s top-down environment people are unwilling to ask hard questions, the first and foremost of which is, “why would anybody want to fly to C@C?” The hotel was built squarely to meet the government’s needs, but most travelers during a pandemic are either workers that need to be physically on site or visitors going to meet family, neither of which you can do when confined to a shed, talking to visitors prison-style through a Plexiglass wall. For anything that you can do through a pane of glass, there’s video conferencing, which requires no flight tickets, hotel reservations, visa application processes or nasal swabs. Doubtless a simple survey of (say) Singapore Airlines frequent flyers would have made this clear, but what Singaporean bureaucrat would dare point out that the emperor has no clothes?

In a final irony, in August it was quietly announced that Connect@Changi has been converted back into a Community Care Facility, returning it back to what it was last December. Sic transit gloria mundi, only turns out the mundi was never particularly interested in transiting through a Changi bubble in the first place.

Predicting Singapore’s next travel bubble

Singapore and Hong Kong recently announced what’s claimed to be the world’s first air travel bubble, meaning a controlled two-way corridor between largely coronavirus-free territories, with travel allowed for any reason and no quarantine required on either side. Here’s some speculation about what other countries could follow.

Don’t call us, we’ll call you

There are four countries that Singapore has unilaterally opened its borders to. However, none have yet to return the favor and none seem likely to anytime soon.

  • Brunei is the only one of the four allows any Singaporeans in at the moment, with a Green Lane for business and official travellers only, but they show no sign of easing up to tourists. Then again, the famously dull Abode of Peace is not too high on anybody’s bucket list.
  • New Zealand is closed to all non-residents, full stop. They’ve also made it clear that Australia will be the first cab off the rank if they do open up, but for time being it’s still returning residents only and they need to do a 14-day quarantine too.
  • Vietnam recently announced its first business-only green lane with Japan. Singapore may follow, but tourism is unlikely to come anytime soon.
  • Australia has been in talks with Singapore for a while, although the outbreak in Victoria put everything on hold. With that seemingly under control, things are moving forward again and the country recently welcomed its first quarantine-free arrivals from New Zealand. They’ve been careful to tamp down expectations though, and for time being it looks more likely that any relaxation would involve shorter/at-home quarantine, not a free-for-all.

The less naughty club

Another three essentially COVID-free regions, all in greater China, are considered safe enough by Singapore to require only a 7-day Stay Home Notice (SHN), instead of a full quarantine. My two cents: Singapore’s next bubble destination is quite likely to come from this group.

  • Macau was very successful at containing COVID, and has thus been very careful at reopening, currently permitting some travel from nearby Guangdong but remaining closed to the rest of China and the world, including Hong Kong. If they choose to reopen to HK, and discussions are already well underway, it’s likely Singapore will follow.
  • Mainland China has a business Green Lane with Singapore, but has yet to open to general travel from anywhere. HK and Macau will both need to come first before Singapore will be on the agenda.
  • Taiwan is planning to open its very first two-way bubble with the tiny (and COVID-free) island nation of Palau. If this works out, Singapore could follow, although you’d expect a business-only channel first. However, politics complicates things: Palau is one of the few nations that formally recognise Taiwan, but Singapore is not, and this is likely why Hong Kong hasn’t opened up to Taiwan either.

There is one more country on the 7-day list, although it remains to been for how long:

  • Malaysia, Singapore’s next door neighbour, was an early COVID success story and an obvious candidate for opening up. However, in early October things started going pear-shaped, with more and more local clusters popping up. The state of Sabah has already been put on full quarantine measures, and if things don’t improve soon the rest of the country may follow.

The fallen angel club

Two countries were previously on the 7-day list for other travellers, but have been relegated back into Division 14. (The third was Hong Kong, but they were rehabilitated on October 12.)

  • Japan remains a statistical anomaly, winding back a spike in August but still reporting hundreds of new cases daily.
  • South Korea has contained several outbreaks, but continues to struggle with low but persistent community transmission.

Both countries were popular tourist destinations for Singaporeans, and both have business Green Lanes in place, but until they can get community transmission under control, they’re unlikely to be Singapore’s bubble list.

The wish list

Various other countries have been proposed as bubble candidates. None seem likely.

  • The Maldives, with its self-contained resort islands, has been touted as being suitable for a travel bubble: just dedicate a few islands for Singaporeans only! However, while the Maldives already has an open-door policy to the world, they’ve paid the price with some of the highest per-capita COVID rates in the world, and it’s difficult to see what Singapore would get out of this.
  • Thailand has been remarkably successful at containing COVID, but they’ve kept their doors firmly locked to the outside world — you can’t even fly to or from the country on anything except government charters. There are no Green Lane arrangements, the Special Tourist Visa for hardy tourists willing to endure 14 days of quarantine was a spectacular flop, and now the shambolic military junta that runs the place is busy dealing with what’s looking more and more like a potential revolution.
  • Thailand’s COVID-free neighbours Cambodia and Laos have similarly restrictive policies, with tourist visas no longer issued and 14-day quarantines mandatory. It’s unlikely either would open to Singapore before Thailand or China.
  • Fellow air hub Qatar seems to be recovering well from a migrant dorm-driven outbreak even worse than Singapore’s, but driving cases down to zero is still a ways off and Singapore is a marginal trading partner at best.

And that’s pretty much it. Indonesia, Philippines, India, Europe, the Middle East, the USA etc are all dealing with what can only be described as raging epidemics, none of which look likely to be contained before vaccination becomes widespread. And while there are some COVID-free Pacific island states (Palau, Fiji, Vanuatu, etc), none have flights to Singapore.

Back in the dim antiquity of March 2020, I glumly predicted that the world would fragment into COVID-free islands in a sea of contagion. I was lucky to find myself on one of these islands, but it looks like there’s not going to be a whole lot of sailing between them anytime soon.