SINGAPORE hotels delivered a stellar performance last year, boosted by a record 10.7 million tourist arrivals to the country in the first three quarters of 2012 as well as the debut of several attractions, according to the latest CBRE Hotels MarketView.
Hotel occupancy for the 12-month period ending November stood at a robust 86.5 per cent, on par with last year’s level. Occupancy reached as high as 90 per cent in the month of July. Demand for luxury hotels stayed strong in 2012 as occupancy grew by 2.6 per cent, while upscale hotel occupancy rose by a mere 0.5 per cent.
Both midscale and economy tiers saw occupancy drop by 1.3 per cent and 0.9 per cent respectively.
In the same period, average daily rate (ADR) was S$260 (US$213), up 7.1 per cent year-on-year. September rates hit a new high at S$282 due to the F1 races.
Of the four hotel tiers, upscale properties witnessed the largest growth in ADR of 8.7 per cent, registering S$300. Economy hotels on the other hand rose by a mere 1.2 per cent to S$111.
Revenue per available room (RevPAR) of Singapore hotels rose by 7.2 per cent to hit $225 – a muted increment compared to the 16.1 per cent growth seen the year before. Luxury hotels recorded the strongest improvement in RevPAR – 10.3 per cent – among all tiers.
The review noted that Singapore welcome 1,200 new rooms coming from eight hotels. This year, a further 16 new hotels with 4,000 rooms are slated to be opened. In the next four years, a total of 11,000 rooms are expected to enter the market, representing a 25 per cent increase in the stock of gazetted rooms as at end-2012.
Midscale hotels will supply the largest number of rooms at 4,100. In addition, hotel sites on the 1H2013 Government Land Sales Reserve list, if triggered and sold, could add 1,800 more rooms.
The sizeable room supply and slower visitor growth could lead to lower occupancy rates and slower ADR growth, resulting in very limited RevPAR increments. CBRE expects an occupancy rate of 80-82 per cent and ADR growth of three-five per cent in 2013.
Meanwhile, labour shortage and manpower costs remain the main concerns for hotel operators, which if unmitigated, could impact profit margins.
