SINGAPORE – A new hotel with at least 220 rooms will be built at Changi Airport Terminal 2 by 2027 to cater to an expected growth in passenger traffic.

This will be the third landside hotel at the airport, and it will be built above the coach stand at the southern end of the newly reopened T2.

Landside refers to the areas of the airport that are before immigration clearance and accessible to the public.

The two current landside hotels there are the 130-room Yotelair Singapore Changi Airport in Jewel, which opened in 2019, and Crowne Plaza Changi Airport, which is next to T3 and has 563 rooms. It opened in 2008.

There are four airside hotels catering to transit passengers at T1, T2, T3 and the JetQuay terminal, which serves commercially important passengers.

Airport operator Changi Airport Group (CAG) had called a tender in August to develop the new landside hotel at T2, and is slated to award the contract by April 2024.

In a tender document seen by The Straits Times, CAG said adding a third landside hotel will serve increased tourist flows around the Changi precinct, for which it is working with the relevant government agencies to develop tourism products.

The operator did not provide more details about these new tourism products.

According to the tender document, the new T2 hotel has to be distinct from the two existing landside hotels, targeting new customer segments.

It should meet the standards of a three- to four-star hotel and have a “wow factor” commensurate with the “world-class image and standing” of Changi Airport.

The new hotel should have at least 220 rooms, which are expected to form at least 60 per cent of the total gross floor area of the new development.

In response to queries, CAG spokesman Ivan Tan said the design of the new hotel, including the types of amenities and potential access points to the airport such as link ways to T2, is part of the tender requirements.

“Creating the best travel experiences has always been a key focus for CAG, and we look forward to differentiated concepts and ideas that would take Changi’s hospitality offering to higher levels,” Mr Tan added.

He said the hotel is expected to be operational by 2027 and its total gross floor area will depend on the awarded proposal. He did not address questions about the tenure of the lease plot, which is about 58 years, according to the tender document.

Passenger traffic at Changi Airport has yet to recover to pre-Covid-19-pandemic levels, though it has rebounded strongly over 2023.

Data released by CAG on Dec 20 showed that 5.15 million travellers passed through the airport in November, compared with 5.72 million in November 2019.

It is the second consecutive month that passenger traffic at the airport has crossed 90 per cent of pre-pandemic levels.

The Ministry of Transport previously said that passenger traffic at Changi should return to pre-pandemic levels by 2024, or possibly earlier.

Industry players expect air travel in South-east Asia to grow even further in the next two decades because of a fast-expanding middle class in the region.

To capture this growth, Singapore has resumed work on Terminal 5, which will add 50 million passengers – more than the current capacities of T1 and T3 combined – to Changi Airport’s yearly capacity by the mid-2030s.

With the full reopening of the revamped T2 in November, Changi’s overall capacity is now 90 million passengers per year.

Separately, the five-star Crowne Plaza Changi Airport has been undergoing a facelift since August that involves the addition of 12 more guest rooms, an extensive revamp of its dining restaurant, and the creation of new meeting facilities.

These works are on track to be completed in December to capture the rebound in both business travellers and tourist arrivals in 2024, said mainboard-listed OUE Commercial Real Estate Investment Trust (Reit), which owns the hotel, in October.

Mr Christopher Khoo, managing director of hospitality consultancy MasterConsult Services, said the new hotel will allow CAG to serve a wider market. It is clearly aimed at a different crowd that is likely to be less affluent than those who would head to Crowne Plaza, he added.

Another possible reason for the new development could be the popularity of Jewel Changi Airport as a must-see attraction for tourists, he said.

Its proximity to the Changi Airport Connector, a 3.5km cycling and jogging path linked to East Coast Park, could also give the new hotel an additional marketing angle, Mr Khoo said.

He added: “As with all the hotels in downtown Singapore, occupancy levels are creeping up and this augurs well for capacity expansion. Hotel prices in downtown Singapore are quite high. It could be that this (new) hotel will be able to provide a value-for-money option.”