Hoteliers who came to Monday’s Tourism Industry Conference hoping to get some relief from the tight labour crunch in Singapore walked away disappointed but resigned  to the fact that they have to live, or die, with the situation.

Lionel Yeo (left), chief executive of the Singapore Tourism Board, saved the bit everyone was waiting for till last when towards the end of his speech, he said it cannot be business as usual and the industry had to come to grips with the manpower challenge.

The tightening of foreign labour across all industries has led to a severe crunch with many hotels under-manned in the back of the house and the front line where it matters most to customer service.

The maturing pains of this 48, going on 49-year-old city state are evident when you visit hotels and restaurants – just not enough staff to face customers. Having just returned from cities such as Dubai, Shanghai and Hong Kong in the last three months, I can see and feel the difference in service levels.

Yeo said there were two drivers to the manpower challenge. One, workforce growth in Singapore has been at 3.3% for the past 30 years but will slow down to 1-2% till 2020. The tourism workforce has grown 5.5% year on year since 2001.

“With even more hotel rooms coming onstream in the next few years, this situation will get worse if our industry does not transform. Based on our rough estimates, an additional shortfall of about 3,000 workers by 2017 is looming if we don’t make adjustments. This is almost 10 per cent of the industry’s current workforce.”

There’s also an aspiration mismatch between what Singaporeans want and what the industry offers. Less than 30 per cent of jobs in the industry, going by the hotel sector sample, are PMET jobs (Professionals, Managers, Executives and Technicians), yet, more than 60 per cent of job-seekers by 2020 would want PMET jobs, he said.

“The industry needs to do more to attract Singaporeans,” he said.

Beyond that, he said hotels need to rethink their physical design and business model while creating meaningful hotel jobs and running operationally efficient properties.

He cited examples such as Westin, So Sofitel, AMOY and One Farrer Hotel & Spa which were trying to do things differently. One Farrer Hotel & Spa (below), opening July, will operate on 30% less manpower than industry average and will introduce a laundry conveyor belt, “virtual” restaurant and complimentary mini bar.

“AMOY will use lighter mattresses and housekeepers will move around with backpacks instead of trolleys,” he said.

He said STB was conducting a study to identify improvement opportunities for hotel operators and to identify gaps that can be bridged with technology. The board will work initially with pipeline hotels and later “existing hotels that are more ready to change”.

The labour shortage is not confined to hospitality of course. The National Association of Travel Agents is also conducting a manpower study to be completed by third quarter 2014.

All this is happening as the STB continues to push its yield-driven, customer-centric strategy to attract quality tourism. Singapore currently receives more than 15 million visitors a year with tourism receipts totaling $23.5 billion last year, two and a half times the $9 billion in 1998, the first year it started tracking receipts.

Yeo shared examples of customer-centric marketing campaigns the board had done in markets such as Australia, India, China and the Philippines. This year, it will roll out integrated campaigns in its top eight markets – Indonesia, China, Malaysia, India, Australia, Thailand, Philippines and Vietnam.

“The demand drivers are strong. We are not a low cost destination but we compete well in value for money,” he said.

How long that can hold true given the tight labour market, time will tell, but for now, hoteliers will have to learn to operate in the new normal.