APPD Market Report Article

Singapore

August 26, 2022

Mike Batchelor, CEO - Hotels & Hospitality Group, Asia

123.7%

SGD 193

RevPAR
Rising

Robust growth in international arrivals in 2Q22

  • As at YTD June 2022, the number of international visitor arrivals recorded 1.5 million, registering a y-o-y growth of 1166%. At the end of March 2022, Singapore announced the reopening of borders to all fully vaccinated travellers. Since then, visitor arrivals have shown strong monthly growth. The country is projected to welcome 4 to 6 million visitors in 2022, exceeding the 2.7 million in 2020.
  • The top five source markets in 1H22 include Indonesia (18.7%), India (14.6%), Malaysia (9.2%), Australia (8.3%) and Philippines (5.4%). Together, the five countries accounted for over 50% of visitor arrivals. The average length of stay for visitors more than doubled in 1H22 to 7.1 days, up from 3.4 days pre-COVID-19.

Only one rebranded hotel reopens in the second quarter

  • Only one hotel, The Maxwell Reserve Hotel, Autograph Collection, entered the market in the quarter. The 138-room hotel was rebranded from the former Six Senses Maxwell. Therefore, the total number of hotel rooms as at YTD June 2022 stood at 62,037.
  • Five more hotels with 1,031 rooms are expected to enter the market in 2H22. These include the Pullman Singapore Orchard (326 rooms) and Vibe Singapore Orchard (256 rooms), which are rebranding projects. The other three hotels are Citadines Connect City Centre (172 rooms), Artyzen Cuscaden (142 rooms) and Citadines Connect Rochester Commons (135 rooms).

Strong growth in ADR leads the growth of RevPAR

  • As at YTD June 2022, the revenue per available room (RevPAR) of luxury hotels recorded SGD 193, a y-o-y growth of 123.7%. Occupancy marginally fell to 46.3% y-o-y, from 48.6% during the same time last year. In contrast, average daily rate (ADR) recorded a 134.6% growth y-o-y, compensating for the fall in occupancy. As a result, YTD ADR stood at SGD 416, 3.3% higher than the 2019 level.
  • Most luxury hotels have exited the government quarantine programme in 1H22. The return of international travellers, particularly corporate travellers, has led the growth in ADR. At the same time, labour shortage constraints are driving hotels to set occupancy caps and push for ADR growth.

Outlook: Market to continue recovering despite economic challenges

  • With relaxed COVID-19 measures and border restrictions, the number of tourists visiting Singapore is expected to grow. A relatively balanced geographical and market segmentation mix have established a strong foundation for the industry to rebound. However, a full recovery is anticipated to take another two to three years.
  • Although the industry is facing broader economic challenges such as a labour crunch and inflation-driven supply issues, the Singapore hotel market has adapted quickly and shown resilience, putting in place measures such as adjusting cleaning frequencies. Despite challenges, the strong tourism outlook and limited supply growth should continue to drive the recovery of the Singapore hotel market.

Note: Singapore Hotels refers to Singapore's luxury hotel market.

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