Far East Hospitality Trust's Q1 RevPAR could have slid 3% sans Oasia Hotel Downtown
Weaker corporate demand led to a soft quarter for Singapore RevPARs.
Far East Hospitality Trust’s (Far East H-Trust) portfolio revenue per available room (RevPAR) may have likely dropped 3% YoY excluding contributions from Oasia Hotel Downtown, according to a report by OCBC Investment Research.
The average occupancy of Far East H-Trust’s hotel portfolio was marginally lower YoY by 0.4 percentage points (ppt) at 89.2%, whilst the average daily rate (ADR) was 1.1% higher at $157. As a result, RevPAR improved by 0.7% to $140, according to its Q1 2019 financial statement. According to OIR analyst Deborah Ong, RevPAR was skewed by the inclusion of the Oasia Hotel Downtown in the portfolio.
Far East H-Trust’s net property income edged up 9% YoY to $25.07m from $23.01m in 2018, boosted by additional contribution from Oasia Hotel Downtown, and an overall increase in master lease rental from its hotel portfolio.
Data points pointed to a soft quarter for Singapore RevPARs, Ong highlighted.
“For hotels, Far East H-Trust’s contribution from the corporate segment was lower at 30.4% (33.1% in 1Q18) due to the absence of the Singapore Airshow that was held in Q1 2018,” she explained.
This sentiment was shared by a report by DBS Equity Research, which noted that Far East H-Trust’s portfolio was impacted by weaker corporate demand on the back of fewer major events in Singapore, and companies continuing to curtail business travel spending.
Looking ahead, April will continue to be challenging for Singapore hotels on a YoY basis, given the absence of Food&HotelAsia (FHA) 2018. RevPARs in H2 2019 look to be more promising relative to H1, especially if the pace of growth in tourist arrivals picks up, Ong commented.