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Revenue per available room (RevPAR) of hotels here is expected to continue its downtrend this year, due to forecasted higher supply and a soft economic outlook, reported Singapore Business Review.
According to OCBC, RevPAR of Singapore hotels declined 4.6 percent year-on-year in 2016, compared to a 5.3 percent drop in 2015. Room supply also increased 4.3 percent last year, while the city-state’s GDP only edged up two percent.
“Looking forward to 2017, with a forecasted 5.9 percent growth in hotel rooms and tepid economic growth outlook, RevPARs are expected to continue their decline, and especially so for hotels that rely on corporate demand,” the bank said.
This is because companies are likely to hold fewer meetings, incentives, conferences and events (MICE) during an odd-numbered year.
OCBC noted that the average occupancy rate of Singapore hotels dipped 0.9 percentage points, while the average room rate fell 3.6 percent on an annual basis in 2016 despite a 2.2 percent uptick in visitor days due to a 7.7 percent increase in visitor arrivals.
Nevertheless, RevPARs of Singapore hotels are forecasted to rebound in 2018 amidst an anticipated improvement in supply-demand dynamics, as long as tourist arrivals and the economy remains healthy.
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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