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Upscale and mid-tier hotels emerged as the best performing segments in Singapore’s hospitality market during the first five months of 2016, with Revenue per Average Room (RevPAR) rates increasing, revealed a CBRE report.
From January to May 2016, upscale and mid-tier hotels saw RevPAR, which measures the total hotel room revenue divided by the total rooms available to rent for a day or range of dates, increase 2.1 percent and 2.7 percent to S$225.64 and S$147.90 respectively.
RevPAR for the economy segment, on the other hand, dipped 0.9 percent to S$200.37 over the same period.
CBRE Hotels executive director for Asia Pacific Robert McIntosh noted that Singapore registered a double-digit growth in international visitors as at May 2016, which in turn fuelled demand for hotel rooms.
“Mainland Chinese tourists overtook Indonesia, historically Singapore’s largest visitor market. The surge in Chinese travellers was largely due to the many strategic partnership deals that Singapore’s Tourism Board concluded with Chinese online travel services such as Alitrip, to increase its presence in the Chinese market. The upscale and mid-tier hotels benefited from the spike in numbers,” he said.
Should the pace of growth be sustained, CBRE Hotels expect visitor arrivals to hit 15.8 million this year, or slightly higher compared with STB’s forecast of 15.2 to 15.7 million arrivals.
“However, the market is anticipating the largest injection of stock in one year since the completion of the two integrated resorts in 2010 and 2011,” said the report.
In fact, many mid-tier to upscale hotels opened in 1H 2016, which include 451 keys at Holiday Inn Express Katong, 298 keys at ibis Styles Singapore on Macpherson and 314 keys at Oasia Downtown.
Meanwhile, around 7,300 more rooms are expected to enter the market from 2H 2016 to 2018.
Hotels that are expected to open in 2H 2016 include 157 keys at the luxury Patina Capitol Singapore, Premier Inn Singapore Beach Road with 300 keys and another 300 keys at Park Hotel Farrer Park.
While the growth in inventory may create a downward pressure on the performance of hotels in terms of occupancy levels, the spike in visitor arrivals will help reduce the adverse impact of the additional supply, said CBRE.
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