Hotel RevPAR dropped 62% YoY in Q1
The impact of the pandemic was most felt by hotels within the upscale segment.
Gazetted hotel revenue per available room (RevPAR) plunged by approximately 62% YoY to $69 in Q1, according to CBRE Singapore Hotel Insights. Occupancy declined 50% YoY to 40% whilst average daily rate (ADR) levels dropped 20% YoY to $171.
The impact of the pandemic was most felt by hotels within the upscale segment. In March, RevPAR dropped by 76%, no thanks to both occupancy and ADR falling 69% and 21% respectively.
Circuit breaker measures threw out the idea of shifting focus to the staycation market for Singaporeans, amidst dwindling arrival numbers given that selected hotels are permitted to open for essential services only.
In contrast, the impact on the economy segment was less severe, largely mitigated by the upswing in demand from Malaysian workers who were seeking for accommodation in Singapore amid Malaysia’s Movement Control Order (MCO).
The long-term outlook for Singapore remains healthy as hotel supply numbers are currently well-controlled, with an estimated 2,400 rooms in the pipeline until 2022. This equates to an annual growth rate of 1.8% between 2020 and 2022, still lower than the growth of 4.5% per year between 2014 and 2019.
Further, relief measures have been rolled out for the hospitality sector to help them during the pandemic. These initiatives are expected to instil confidence in travellers and facilitate a faster recovery.
Singapore is likely to remain resilient as it remains a key gateway city in the region and is home to the Asian headquarters of various global Fortune 500 companies. Teleconferencing may replace some physical business meetings, but face-to-face interactions are still necessary and many business trips will likely remain essential.
CBRE believes that Singapore is expected to remain as one of the leading tourist destinations regionally and globally, with investments being injected into improving tourism offerings, such as the redevelopment works for Sentosa Island and Pulau Brani, the expansion of integrated resorts Resorts World Sentosa and Marina Bay Sands, and the ongoing construction of Mandai’s eco-tourism hub and a new tourism hub at Jurong Lake District from 2026 onwards.