APPD Market Report Article

Singapore

December 1, 2021

-15.9%

SGD 93

RevPAR
Falling

Travel demand impacted by local regulations

  • A total of 172,055 international visitors visited Singapore as at YTD September 2021, registering a y-o-y decline of 93.6%. Overall international demand in 3Q21 was impacted by various rounds of ‘Heightened Alert’. On a positive note, the Vaccinated Travel Lanes (VTLs) with Germany and Brunei came into effect in September. Eleven more VTLs are to be launched in October and November.
  • Currently, most of the hotels continue to rely on staycation or quarantine for their business. Various rounds of ‘Heightened Alert’ impacted domestic leisure demand between mid-May and August, yet school holiday and lifted regulations boosted business in September. ‘Heightened Alert’ came into effect again in late September.

Several rebranding and renovation projects announced in 3Q21

  • In Q3 and early October, there were two major rebranding and one renovation announcements. The 308-room Grand Park Orchard will be rebranded as a Pullman hotel, slated to open in early 2022; The 300-room Park Hotel Farrer Park was rebranded to Holiday Inn Singapore Little India. Meanwhile, Grand Hyatt Singapore announced a 2-year renovation commencing on October 2021.
  • There was one new hotel opening in 3Q21, namely Oasia Resort Sentosa (formerly Le Meridien Sentosa). This property is Far East’s first resort-style hotel operation. It includes 191 rooms and suites spread across a three-story heritage building and a six-storey annex. The owner postponed the opening from 2Q21 to 3Q21 to suit the country’s reopening schedule.

RevPAR continues to be subdued

  • As of YTD September 2021, Singapore luxury hotels registered SGD 93 in revenue per available room (RevPAR), 15.9% behind the same period last year. The RevPAR decline is mostly driven by the average daily rate (ADR), which recorded a decrease of 17.7% y-o-y to SGD 176, due to the lack of international travellers. In the meantime, occupancy increased marginally by 1.1 percentage point to 52.6%.
  • The increase in occupancy and the decline in ADR are partially due to more luxury hotels entering buyout contracts with the government for quarantine purpose. Such properties include Mandarin Oriental Singapore and Ritz Carlton Millenia Singapore. These hotels are likely to maintain their contracts until early 2022.

Outlook: Staying positive yet cautious on the tourism recovery

  • The announcements on VTLs have clearly shown Singapore government’s determination to open up and transit to a COVID-19 resilient country. The first global conference – The Bloomberg New Economy Forum – will also be held in November. Therefore, international business is set to return in the medium to long term.
  • However, in the short term, Singapore is expected to continue with staycation and quarantine business. The number of VTL travellers is capped at 3,000 a day at the moment. Although border controls have been eased, domestic social distancing requirements have kept tight. Volume for international business is expected to remain small in the near term.

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

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