MARKET OVERVIEW
66
ANNUAL REPORT 2015
FRASERS HOSPITALITY TRUST
In 2015, the STB has taken initiatives
to ramp up marketing efforts across
10 key markets to drive attendance
to business travel and MICE events,
those markets include China, India,
Indonesia, Thailand, Vietnam,
Malaysia, Philippines, Australia, Hong
Kong and Japan.
Hospitality Industry Performance
Singapore’s hospitality market is one
of the fastest growing in Asia Pacific,
with RevPAR increasing at a CAGR
of 5.6% over the past ten years from
2005 to 2014.
According to the Singapore Tourism
Board (STB), by YTD August 2015,
8.61 million rooms were sold, out
of a registered total available room
nights of 10.5 million. This resulted
in an overall market occupancy
of 85.3%, a slight drop of 0.6%
compared to the same period
in 2014. Broken down by hotel
categories, only midscale witnessed
a growth of 0.9% from the same
period of last year, the other classes
have all declined; 4.4% for the luxury,
1.6% for upscale and 1.9% for the
economy segment for 1H 2015.
Total revenue for hotels in Singapore
was a registered SGD2.1 billion
(USD1.5 billion) for YTD August 2015,
a 0.2% decrease from the same
period last year in local currency
terms. The ADR was S$242.47
(USD173.63), a 5.4% decrease
from 1H 2014 in local currency
terms. ADR for luxury hotels was
a recorded S$443.4 (USD317.52),
approximately 69.5% higher than
upscale, 1.6 times higher than
midscale and 3.3 times higher than
the economy segment.
RevPAR was S$207.1 (USD148.30)
for YTD August 2015, declining by
6.1% from the same period last year,
affected by the weakened ADR and
occupancy.
With significant decreases in trading
performance, even with the major
events hosted by Singapore in 2H
2015, such as F1 and the upcoming
Christmas holiday season, it is
uncertain whether Singapore’s hotel
performance will improve to finish
the year on par with 2014 results.
Existing Supply
The hotel market had a relatively
stable supply for many years.
Notably, due to the opening of two
integrated resorts (IRs), the hotel
market saw a significant increase
in supply in 2010, registering 4%
year-on-year growth. Riding on
the positive sentiment, hotel room
supply expansion continued in
2011 with a growth rate of 9.9% but
moderated in 2012 with a 0.81%
increase. In 2013 and 2014, there
was significant growth in supply with
5.6% and 7.8% respectively.
By year end 2014, a total of 392
hotels with approximately 57,172
rooms were recorded by STB, an
increase of 5.1% and 4.0% from 2013
in terms of the number of hotels and
rooms supply respectively.
Notable new hotels openings in
H1 2015 include the Genting Hotel
Jurong with 557 rooms, the Park
Hotel Alexandra with 442 rooms and
the Hotel Grand Chancellor Orchard
with 488 rooms.
Future Supply
According to STB, as of 1H 2015,
there will be 10,967 rooms in the
supply pipeline, 9,517 rooms under
construction and 1,450 rooms for
planned development.
Several major hotel developments
are expected to complete in 2H
2015, such as the 701-room luxury
South Beach hotel in Beach road,
the 157-room luxury hotel, Patina in
City Hall, and the 264-room Hotel
Grand Central in Orchard.
Singapore will experience a supply
boom in 2016 and 2017. A total of
approximately 24 hotels with 8,881
rooms will be added to the market,
of which, 39% are in the luxury or
upscale segments, 40% are in the
midscale segment and the rest are in
the economy segment.
Examples of 2016 hotel openings
include the 300 room midscale
Premier Inn on Beach Road, the
131 room Hotel Indigo Katong on
Joo Chiat, the Holiday Inn Express
Katong with 451 rooms, as well as
the second InterContinental hotel
in Singapore which is scheduled to
open at Robertson Quay which will
offer 225 rooms.
Hospitality Market Outlook
Looking ahead, challenges will
include economic uncertainties,
regional competition and currency
movements. Hotel demand in
Singapore continues to grow from
key source markets in Asia, as
reflected in the increase of tourism
arrivals over the last five years.
The ASEAN economic community
initiatives will also have a positive
impact to tourism across the region.
An increase in efforts by the
Singapore Government to diversify
their tourism offerings by production
and promotion of leisure and
business events, attractions, medical
facilities, gaming facilities, shopping,
exhibitions and conventions in an
effort to increase visitor arrivals,
who are extending their length
of stay. The STB continues to
develop tourism products and
experiences, and seeks to market
existing cultural heritage to a wider
audience. The controlled increases
in supply will accommodate the rise
of tourist arrivals, and the lodging
industry is not expected to face
great oversupply in the short term,
which will aid in keeping Singapore
occupancy and ADR at its current
high level for the near future.
This June, Singapore hosted the
SEA Games but despite this major
sporting event, tourist arrivals and
hotel room nights declined. For
the rest of 2015, the Lion City will
continue to absorb the short term
impact of additional room inventory
and a slow down of arrivals from
its major Asian source markets
experiencing political instability (e.g.
Indonesian presidential elections,
Bersih demonstrations) and the
associated economic slowdowns.
