In Singapore, with the Hong Kong travel bubble burst for the time being, tourists are still nowhere to be seen, especially budget travellers.
So hostels are having to focus their attention on a new clientele: the thousands of Malaysian workers in the country who are no longer able to commute daily across the causeway because of border restrictions.
“The Malaysians are the only thing keeping us afloat, apart from wage support and rental waivers,” said Jacquelyn Chan, director of The Hip and Happening Group, owners of the Rucksack Inn.
“Out of the guests we have now, 95% are Malaysian,” she said, adding that the 160-bed backpacker hostel is only permitted to operate at half capacity due to safe distancing restrictions.
When the borders closed, trapping people inside and out, it became clear that in the absence of leisure travellers, these workers would be a lifeline for the hostels.
Charles Lumanlan, the owner of Hipstercity Hostel, says that meant he had to switch from the millennial traveller market to workers in need of cheap bed space. “The normal price is S$50 a night but now we charge S$25. My competition is no longer just other hostels, it’s everyone in Singapore with a room to spare.”
Joyce Kay, CEO of K2 Guest House, told CNA, “Even though demand meets the 50% operating capacity we are allowed, the prices are not there, so we sacrifice in terms of revenue. I need to have occupancy at minimum 80% to break even at this price.”
Kay has 270 beds across two branches. “We are surviving but there’s no profit at all. It’s like we’re doing charity work,” she said.
On top of that, these low-end establishments must cope with the extra costs of more frequent cleaning and manning a 24-hour reception.
Extended border closures are hurting the hostels’ business, but the owners are not optimistic about business improving when international travel restarts.
“We will be the last to fill up,” Kay said. “Travellers will all want to avoid our shared facilities during a pandemic.”
“When the borders open, the Malaysians will go home, but not enough people will come in fast enough to replace them,” Chan warned. “The hostels are going to be wiped out.”