SINGAPORE — The hotel industry in Singapore should continue to enjoy healthy demand despite rising room rates and strong competition, as the Republic’s existing and coming attractions are set to draw more regional tourists.
In the first quarter of this year, Singapore’s international visitor arrivals held steady at about 3.9 million, which helped lift gazetted hotel-room revenue by 12 per cent on-year to S$800 million during the period, said the latest Singapore Tourism Board (STB) quarterly report released last week.
That trend is set to continue, with visitor numbers likely to still be ticking higher, which should see demand for hotel rooms rise, said Euromonitor’sresearch analyst Cassandra Tan.
“Tourist arrivals are predicted to grow at a compound annual growth rate of 4 per cent, driven by the wide array of events, including sporting events at the new Sports Hub and other coming attractions, such as the Singapore Pinacotheque de Paris opening in 2015,” added Ms Tan.
“Not forgetting, the abundance of low-cost carriers in the Asia-Pacific also supports the frequency of visits, especially for short-haul trips.”
Against this backdrop, major operators have enjoyed stronger earnings in the corresponding period, with Resorts World Sentosa recording on-year growth of 6 per cent in revenue from its attractions and hotels in the first quarter of the year, said a company spokesperson.
And the industry will continue to grow on the back of healthy tourist demand, STB’s director for hotels, Ms Heng Li Lang, told TODAY. “With Singapore’s transformation and tourism growth over the past decade, demand for hotel rooms has risen and more hotels are being built. An estimated 12,700 upcoming rooms are expected from now till 2018.”
However, tourists arriving in Singapore are also facing increasingly high hotel room rates, which averaged about S$261 in the first quarter after rising 2.7 per cent on-year. The increase was the strongest in the luxury hotel segment, with a 9.5 per cent increase to an average rate of S$467.
“The scenario is primarily caused by the opening of new hotels in prime locations fetching higher-than-averagerates. Over the past five years, we have witnessed the opening of hotels in the Central Business District and Sentosa targeting the upscale and luxury market,” said Ms Tan.
“These include, for instance, CapellaSingapore in 2009, the Fullerton Bay Hotel in 2010, W Singapore in 2012 and the Westin Singapore last year. This could in turn lead to implications such as tourists shifting away from the luxury hotels to mid-tier options, as well as lower expenditure in other segments such as shopping, dining and entertainment.”
Reflecting that sentiment, STB’s first-quarter figures showed a 1 per cent on-year decline in tourism receipts for food and beverage, as well as a 6 per cent dip in receipts for shopping.
“We are mindful that rising costs can affect tourism spending and future growth,” said Ms Heng. “Hence, it’s imperative that we continue to work towards quality tourism, a yield-driven development that emphasises strong economic contribution, development of attractive tourism experiences, targeted marketing strategies, improvement of industry competitiveness and engagement with the local populace.”