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Tourist spending on accommodation in Singapore rose by 28 percent year-on-year during the first nine months of 2016, reported the Straits Times, citing initial estimates from the Singapore Tourism Board (STB).
But for the whole year, revenue per available room (RevPAR) declined by almost five percent to $199 due to falling room rates amidst an uptick in the number of available hotel rooms.
On an annual basis, the supply of hotel rooms here increased by 4.8 percent in 2016, bringing total stock to 63,850 rooms across 413 hotels, STB data showed.
At the same time, the average occupancy rate dipped by 0.9 percentage points to 84.2 percent. Nevertheless, the drop was less than anticipated thanks to the record number of visitor arrivals last year, said Robert McIntosh, Executive Director of CBRE Hotels Asia Pacific.
“It’s been a bit of a saving grace for the hotel industry with serious concerns about extra supply,” he noted.
According to a CBRE report, there is a pipeline of about 3,400 rooms from midscale to luxury hotels for 2017, but excess supply is expected to dwindle after next year, McIntosh explained.
“With slowing supply and static occupancy, it looks like 2017 will see the bottom of the drop in RevPAR, then (it would) start to increase.”
Meanwhile, he noted that STB’s strategy of attracting tourists from Tier 1 and 2 cities in Indonesia, China and India is benefitting some local hotels despite stiff competition among accommodation providers.
For example, Orchard Hotel reported that the duration of stays by Indonesian travellers climbed by 30 percent on a nightly basis, while Chinese nationals contributed to a 50 percent surge.
Marriott Tang Plaza Hotel recorded a 10 percent rise in occupancy in 2016, as it has been wooing Chinese visitors via online travel agencies and social media.
At Royal Plaza on Scotts, a hotel that has partnered with local agents who are specifically attracting guests from the said cities, occupancy grew by four percent last year.
“Tourists from these markets typically favour four- and five-star accommodations, accounting for over 60 percent of hotel searches,” noted Imbert Fung, Director for India and Southeast Asia at travel search engine Kayak.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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