APPD Market Report Article

Singapore

February 28, 2022

-3.8%

SGD 105

RevPAR
Falling

Demand grew significantly during the year-end festive season

  • Overall visitor arrivals contracted by 88.0% y-o-y in 2021 to a total of 329,957 arrivals, in light of ongoing COVID-19 pandemic and various variants. China remained as the number one source market for Singapore. Based on anecdotal evidence, many Chinese visitors are students studying overseas, using Singapore as the stopover point.
  • After the launch of VTLs in September 2021, visitor arrivals increased from 18,995 in September to 92,785 in December. A majority of VTL travellers come to visit friends or families. This demand might not necessarily translate to hotel room nights. However, staycation has remained popular. Most hotels saw a spike in bookings during the year-end festive season.

No major hotel opening was announced in 4Q21

  • In 2021, a total of 564 rooms entered the market, including the rebranded Duxton Reserve Hotel, Autograph Collection (formerly Six Senses Duxton), The Clan Hotel and the rebranded Oasia Resort Sentosa (formerly Le Meridien Hotel and Spa). Singapore registered 69,261 hotel rooms according to the latest numbers from STB.
  • Although the market saw limited number of new openings, there were several rebranding or renovation works announced in 2021, such as Grand Park Orchard to The Pullman Orchard, Mandarin Orchard to Hilton, Hilton Orchard to voco Orchard Singapore and the Park Hotel Farrer Park to Holiday Inn Hotel Little India.

Trading performance was mainly driven by occupancy

  • Revenue per available room (RevPAR) of luxury hotels fell by 3.8% y-o-y in 2021 to SGD 105. Occupancy improved to 54.6% from 52.8% in 2020, while average daily rate (ADR) declined 7.0% y-o-y to SGD 193. Occupancy was largely driven by local staycation and quarantine demand. Several luxury hotels such as JW Marriott South Beach and InterContinental Bugis were under the government’s buyout contract.
  • The last quarter of 2021, in particular December, displayed an increase in marketwide hotel performance due to public holidays and school holidays. ADR of luxury hotels increased from less than SGD 200 during the first 10 months to SGD 211 in November then to SGD 346 in December. Occupancy was down as some hotels ended their buyout contracts.

Outlook: Full recovery is reliant on further border reopening

  • In the near future, staycation is expected to remain as the main demand source. Hotel bookings for 1Q22 still seem positive due to the extension of SingapoRediscover Vouchers, which will expire at the end of March 2022. With high vaccination rate and rollout of boosters, the government is not looking for a large number of hotel buyout. As a result, more hotels will compete for normal business.
  • As such, further business growth will be reliant on border reopening. Although Singapore has announced VTLs in late 2021, ticket sales for inbound travel were suspended from 23 December 2021 to 20 January 2022 in light of the new Omicron variant. Even after VTLs resume, arrivals are expected to be limited due to the daily cap. Further border reopening is needed for greater recovery.

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

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