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Revenue per available room (RevPAR) of hotels here dipped by 1.5 percent year-on-year for the whole of 2017, reported the Singapore Business Review, citing data from OCBC Investment Research.
Despite the RevPAR contraction last year, it is an improvement from the 4.7 percent and 5.3 percent drop in 2016 and 2015 respectively.
In particular, economy hotels in the city-state reported the highest RevPAR growth of 8.4 percent. On the other hand, mid-tier hotels posted a 0.1 percent gain, while that for luxury hotels declined by 2.8 percent on an annual basis.
At the same time, that average occupancy rate edged up by 1.5 percentage points, whereas average room rate slid by 3.3 percent. Room supply rose 4.5 percent and visitor days increased 4.6 percent thanks to a 6.2 percent rise in the number of tourist arrivals.
Looking ahead, OCBC Investment Research Analyst Deborah Ong is forecasting a slight gain in hotel room supply this year.
“The total room stock is expected to increase 1.2 percent in 2018, which in our opinion, will likely be less than the increase in visitor days this year. Should both leisure and corporate demand remain healthy, the relatively muted room pipeline from 2018 to 2020 should put the Singapore hospitality market in a position for a multi-year upswing.”
“RevPARs are expected to improve in 2018 with better supply-demand dynamics, though we expect slightly weaker RevPAR/RevPAUs growth (low single-digit) for Q1 2018 given the back-end loaded supply injection in 2017,” she noted, adding that visitor days is expected to rise by about 4 to 7 percent, while leisure demand is expected to remain strong.
Although the existing glut of hotel rooms here could dampen growth, Singapore is anticipated to firmly remain as the one of the most popular Asian destinations this year, according to Colliers International, which expects the average daily rate (ADR) to rise by one to three percent for the whole of 2018.
Christopher Chitty, Senior Content Producer at PropertyGuru, edited this story
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