A MAJORITY of hotel general managers in Singapore believe that occupancy and the average daily rate (ADR) will both grow in 2017 compared to end-2016 results.
According to a poll conducted with hotel general managers this month by hospitality investment firm Tourism Solutions International (TSI), 65 per cent of respondents indicated that occupancy in 2017 will increase over 2016.
However, most believe the increase will be tepid with 53 per cent of hoteliers believing that the increase will range between zero and five percentage points. The remaining 12 per cent believe occupancy will grow by more than five per cent next year.
For ADR, 59 per cent of hoteliers indicate that it will increase for 2017 with a 47 per cent majority predicting a minor positive change of up to five per cent.
The upper upscale segment meanwhile accounts for most of the negative outlook, forecasting slight decreases in both occupancy and ADR.
Overall, in terms of gross operating profit (GOP), 59 per cent of hoteliers responded positively with a majority predicting a slight increase of up to five per cent in 2017.
Of the remaining 41 per cent, slightly more than 20 per cent believe profits will take a slight dip of up to five per cent while the others feel that there will be no variance.
A separate TSI forecast resulted in conflicting expectations of flat to minor decreases for all three measures (occupancy, ADR and GOP) in 2017.
TSI explained that despite extremely strong 2016 visitor arrival growth of 12.5 per cent through June, lower growth rates in visitor arrivals, shorter average length of stay and expected supply increases (3,961 rooms) will provide a challenge for hoteliers next year.
Beyond 2017, TSI expects the hotel supply to remain relatively stable for a period due to the lack of available land parcels released by the government in recent years. In addition, Changi Airport’s new Terminal 4 will open next year, facilitating significant growth in future visitor arrivals.
