APPD Market Report Article
SingaporeMay 31, 2022
Visitor arrivals begin to grow as the country opens up
- International visitor arrivals registered 258% y-o-y growth as of YTD March 2022 to 246,121 arrivals. The growth is mainly facilitated by the relaxed border restrictions. From 26 April 2022, all fully vaccinated travellers and non-fully vaccinated children aged 12 and below are permitted to enter Singapore, without entry approvals or taking Vaccinated Travel Lane (VTL) transport.
- As of YTD March 2022, the top five source markets are India (22.2%), Indonesia (10.7%), Malaysia (8.2%), Australia (6.6%) and Bangladesh (6.4%). The evolvement of the geographic mix is related to each country’s border restrictions.
Several rebranded hotels open in the first quarter of 2022
- As of YTD March 2022, two hotels with 1,503 rooms re-entered the market. However, they are not new developments but conversions. The two hotels are the 1,080-room Hilton Orchard Singapore (formerly Mandarin Orchard) and the 423-room voco Orchard Singapore (formerly Hilton Singapore).
- The number of new developments in the next three to five years remains muted. However, conversions, refurbishment and redevelopment have been active. In early April, The Swissotel Merchant Court Singapore has announced plans of deflagging. It will be transformed to The Paradox. Later in April, Resort World Sentosa confirmed that their three hotels will start phased refurbishment from 3Q22.
RevPAR recovery led by ADR increase
- As at YTD March 2022, revenue per available room (RevPAR) of luxury hotels increased by 63.9% y-o-y in 2021 to SGD 138. Occupancy fell to 37.5% from 46.3% from the same time last year, while average daily rate (ADR) grew 103% y-o-y to SGD 369. The ADR has returned to 92% of the pre-COVID-19 level (around SGD 400).
- At the end of 2021, a couple of luxury hotels exited the GQF/SHN programme and resumed normal operation. Hence, occupancy as at YTD March 2022 is lower than that of the same time last year. The ADR rebound is supported by the extension of SRVs, public holidays, such as Chinese New Year, and school holidays in March.
Outlook: Border reopening is expected to drive hotel market recovery
- Looking ahead, we expect steady and robust growth for the luxury hotels. As Singapore further opens up and lives with COVID-19, we have seen the return and strong interest from international tourists, particularly corporate travellers.
- Internationally branded luxury hotels are more likely to capture this demand, while continuing leveraging on local staycation. However, the recent labour crunch might also limit the revenue potential. Therefore, luxury hotels are likely to control capacity while yielding on rate and maintaining service quality. Hence, ADR is likely to return to pre-COVID-19 levels before occupancy.