After enduring three years of sliding RevPAR, Singapore hoteliers are expecting the tide to turn in their favour this year.
RevPAR fell consecutively in recent years, from S$204 (US$156) in 2014 to S$183 last year. However, hospitality players and experts at the recent Hotel Investment Conference Asia Pacific (HICAP) 2018 expressed confidence that numbers will pick back up.
“The environment is starting to get better. The past few years were devastating, and it was on the back of the government believing that demand (for rooms) would continue to come in, and this resulted in a big imbalance,” commented Gerald HK Lee, CEO of FEO Hospitality Asset Management.
“I think that will be addressed this year, as we clocked in about six per cent of arrivals last year. If we can achieve (more) growth in arrivals, at least the equation will be turned around,” he surmised.
Chee Hok Yean, managing partner, Asia Partner, HVS, concurred. She predicted: ”This year, occupancy will probably inch up, room rates will probably stay flat, and the refurbishment of major hotels bodes well for performance.”
Experts and operators predict that RevPAR growth will bounce up to three per cent from last year. This recovery is also anticipated due to lower operating costs, including labour, speculated Lee.
The industry has already seen a “good trend for the first months of 2018”, said KC Moy, executive vice president, Capella Hotel Group.
Since 2014, there has been little deviation in Singapore’s average occupancy rate, with 84.7 per cent recorded for last year. Meanwhile, total gazetted hotel room revenue hit a five-year high of S$3.7 billion last year.