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Singapore’s new hotel room supply is expected to slow down following a boom in recent years, providing some relief to hoteliers, reported The Business Times.
There were over 67,080 rooms across 420 hotels as at end-2017. For this year, the supply pipeline is expected to increase by 2.5 percent, before easing to 0.8 percent and 0.6 percent in 2019 and 2020 respectively, showed a CDL Hospitality Trusts research.
This, along with growing visitor arrivals, is giving the hotel industry a boost.
Based on preliminary estimates from the Singapore Tourism Board (STB), overall visitor arrivals are up by almost seven percent year-on-year during the January to April period.
This increase in visitor arrivals led to improved average occupancy rate (AOR) and average room rate (ARR), which in turn saw revenue per available room (RevPAR) increase 4.4 percent year-on-year to $191 during the first four months of the year, showed STB numbers.
ARR rose 2.8 percent to about $222, while AOR climbed 1.4 percentage points to 86.2 percent. With this, the industry’s total room revenue jumped by more than nine percent to nearly $1.32 billion.
“The current trend is expected to continue, with RevPAR and ARR expected to grow three to five percent, and two to four percent respectively for 2018. Occupancy rates could potentially [reach] near 87 percent by the end of 2018 on the back of lower supply and increasing tourism,” said Cushman and Wakefield senior research director Christine Li.
With this, HVS president (Asia Pacific) Chee Hok Yean expects RevPAR to expand by almost three percent to $187 for this year, while occupancy and average daily rate is forecasted to grow by about one percentage point to 86 percent and around two percent to $219 respectively. She also expects visitor arrivals for the second half of 2018 to at least match that seen in 2H 2017.
RHB analyst Vijay Natarajan predicts this year’s RevPAR to improve by three to seven percent on the back of robust leisure and corporate demand as well as the moderation in hotel supply injection. He expects industry-wide occupancy to remain stable or even increase by one to two percentage points, and ARR to increase by three to five percent.
CBRE Hotels also revised its RevPAR projection for the year.
“At the beginning of this year, we had forecast that RevPAR would rise by one percent, but based on the current market, we may see a 2.5 percent to 3.5 percent growth,” said CBRE Hotels (Asia Pacific) executive director Robert McIntosh.
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