SINGAPORE: The performance of the country’s hotels dipped in October after a surge in room rates and occupancy the previous month, due in part to the Singapore Grand Prix. This was shown in the most recent data from the Singapore Tourism Board on Monday (Dec 4).
While there had been 1,130,757 visitors to Singapore in September, this number dropped to 1,125,948 the following month. And while this is considerably higher than at the same time last year, when there were only 816,833 visitors, October was the third year in a row to see a decline in the number of tourists. Nevertheless, this is expected to reverse as year-end holidays approach.
The average room rate for hotels went down from S$325.46 in September to S$278.08 in October, a fall of 14.6 per cent. It also marked a 2.6 per cent decline year-on-year, the first time this has happened since March 2021.
Room revenues fell from S$493 million to S$413.1 million in October, a decrease of 16.2 per cent and only slightly above one per cent higher than in October 2022.
Revenue per available room in October also declined by 19.3 per cent, falling from S$269 to S$217.05. It was also 9.8 per cent lower than the same time last year.
Occupancy rates have also fallen, from 82.7 per cent in September to 78.1 per cent in October, the lowest in the last seven months.
All four hotel categories saw smaller average room rates last month. For luxury hotels, it went down by more than S$100 to S$581.75. For the upscale category, it declined to S$321.10. For mid-tier hotels, it was down to S$217.49. And for economy hotels, it was down to S$140.31.
“A higher-for-longer interest-rate environment could eventually lead to travelers being more cost-conscious, despite the current travel boom. Singapore, a high-cost travel destination in the region, has become more expensive, given the strong Singapore dollar and higher hotel rates. This could turn away budget-conscious travelers looking to stretch their dollar, or lead to shorter stays in Singapore,” Mr Wong Xian Yang, Cushman & Wakefield’s head of research for Singapore and South-east Asia, was quoted as saying in The Business Times at the end of October.
For context, in September of last year, Singapore hotel room prices were the highest they had been in 10 years, at S$259 a night on average. The easing of COVID-19 restrictions meant the arrival of more visitors, with arrivals rising for the sixth consecutive month back then. The surge in visitors caused hotel prices in July 2022 to rise nearly 70 per cent year-on-year compared to the highest since Sept 2012.