Ho­tel rooms, prob­lems in­crease in Sin­ga­pore

China Daily (USA) - - BUSINESS - By BLOOMBERG

An in­flux of tourists to Sin­ga­pore this year has brought lit­tle joy to the city’s hote­liers, as a glut of rooms sends a key rev­enue mea­sure to a six-year low.

Rev­enue per avail­able room, a met­ric used by the ho­tel in­dus­try, slumped 7.4 per­cent in June to S$179.40 ($132) a night, the low­est since 2010, ac­cord­ing to data from the Sin­ga­pore Tourism Board. Even as tourist ar­rivals have risen each month this year, room rates have fallen be­cause of shorter trips by vis­i­tors and a 5 per­cent in­crease in the num­ber of ho­tel rooms.

There’s no re­lief in sight. Of the 2,866 ho­tel rooms slated for ad­di­tion this year, about two-thirds were ex­pected to open in the sec­ond half, ac­cord­ing to UOB Kay Hian. Mar­riott In­ter­na­tional Inc and the owner of the Holiday Inn Ex­press chain are among op­er­a­tors that have planned new ho­tels in Sin­ga­pore this year or al­ready opened them.

“Chi­nese tourists are com­ing in from sec­ondary cities and they are more bud­get-con­scious.” Derek Chang, an an­a­lyst at UOB Kay Hian in Sin­ga­pore

“The high sup­ply of new ho­tel rooms will be a head­wind for room rates,” Mac­quarie Group an­a­lysts Ken Ang and Tuck Yin Soong said in a note to clients. “While vis­i­tor ar­rivals have in­creased, av­er­age length of stay is fall­ing, in­clud­ing from a higher pro­por­tion of day vis­i­tors,” said the an­a­lysts, who have a neg­a­tive rat­ing on ho­tel stocks.

Chi­nese vis­i­tors, the largest group of tourists to Sin­ga­pore, posted a 53 per­cent in­crease in June from a year ear­lier, the tourism board data showed. How­ever, many price-con­scious tourists are stop­ping over be­fore cross­ing into Jo­hor Bahru in Malaysia, which is about a 30-minute drive from the city cen­ter, ac­cord­ing to Derek Chang, an an­a­lyst at UOB Kay Hian in Sin­ga­pore.

“Chi­nese tourists are com­ing in from sec­ondary cities in China and they are more bud­get-con­scious,” Chang said.

A pull­back by Chi­nese vis­i­tors has also hurt ho­tels in Hong Kong. Av­er­age room rates in Hong Kong were down 9.2 per­cent to HK$1,337 ($172) last year, ac­cord­ing to the Hong Kong Tourism Board. In Tokyo, a pop­u­lar desti­na­tion for Chi­nese tourists but which has a short­age of ho­tels, av­er­age daily room rates last year rose 9.4 per­cent to 18,225 yen ($176), data from Sav­ills showed.

The glut of rooms is hurt­ing Sin­ga­pore ho­tel op­er­a­tors. Shares of Ho­tel Prop­er­ties Ltd, which owns the Four Sea­sons,

Hil­ton and Concorde ho­tels in Sin­ga­pore, have fallen 10 per­cent this year, com­pared to a 1.1-per­cent drop in the bench­mark Straits Times In­dex. Global Pre­mium Ho­tels Ltd, which runs a chain of bud­get ho­tels, has dropped 12 per­cent.

An out­break of the Zika virus may fur­ther dis­suade tourists. More than 240 cases of the mos­quito-borne virus have been de­tected since the city’s first case was iden­ti­fied last month.

When Sin­ga­pore was hit by SARS in 2003, vis­i­tor ar­rivals plunged 70 per­cent in the first three months of the pan­demic, send­ing ho­tel oc­cu­pancy plung­ing more than 40 per­cent, UOB Kay Hian said.

BLOOMBERG

Tourists at the In­fin­ity Pool on Ma­rina Bay Sands' sky­park in Sin­ga­pore.

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.