Singapore 1 August, 2016 - The first five months of 2016 saw upscale and mid-tier hotel segments faring the best with Revenue per Average Room rates increasing. Upscale hotels recorded a growth of 2.1 per cent to S$225.64 from January to May 2016 for Revenue per Available Room. RevPAR measures the total hotel room revenue divided by the total rooms available to rent for a day or range of dates and is the industry’s best measure of revenue growth for hotels as it provides insight into how well a hotel is utilizing its room inventory. RevPAR for the economy segment decreased 0.9 per cent to S$78.24 for the first five months of 2016. Overall, RevPAR dipped 0.7 per cent to S$200.37 over the same period. These were the key observations in CBRE Hotels’ MarketView Report H1 2016.
Robert McIntosh, Executive Director, CBRE Hotels, Asia Pacific explained “Singapore’s tourism numbers saw a double-digit growth in international visitors year-to-date May 2016 compared to the same period last year, which in turn fuelled demand for hotel rooms. Mainland Chinese tourists overtook Indonesia, historically Singapore’s largest visitor market. The surge in Chinese travelers 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.”
Should the pace of growth be sustained, CBRE Hotels expects visitor arrivals to increase to approximately 15.8 million in 2016. This is slightly above STB’s forecasts of 15.2 to 15.7 million arrivals (zero per cent to 3 per cent growth). 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. The first half of 2016 saw many mid-tier to upscale hotel openings. They include 298 keys at ibis Styles Singapore on Macpherson, 314 keys at Oasia Downtown, 451 keys at Holiday Inn Express Katong and others. From 2H 2016 to 2018, there will be approximately an additional 7,300 rooms entering the market, with 2017 having the largest increase in pipeline supply.
Hotels opening in the next half of 2016 include the luxury Patina Capitol Singapore (157 keys), Premier Inn Singapore Beach Road (300 keys) and 300 keys at Park Hotel Farrer Park, amongst others. The growth in inventory will create downward pressure on the hotels’ performance in terms of occupancy levels. However, the spike in visitor arrivals year-to-date will help reduce the adverse impact of the additional supply.
Several hotels in Singapore have been undertaking operator selection exercises as well as re-branding initiatives. The stable hotel market makes it favourable for international brands to expand its footprint in Singapore. With the recent acquisition of Starwood, Marriott International looks set to launch five additional brands in Singapore. Most recently, the South Beach Hotel was rebranded as JW Marriott Singapore.
Mr McIntosh added “This will certainly boost Singapore’s standing as a top destination for tourists, conventions and events in the region”.
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