Supply will boom 6.1% next year.
There will be a 6.1% growth in hotel room supply in FY17, outpacing demand amidst a weak corporate environment.
This is according to OCBC Investment Research, which reported that the total room stock increased 2.4% in 9M16, less than the 10.3% jump in tourist arrivals from Jan-Aug.
"Nonetheless, we believe the weak corporate demand contributed to the 2.7% decline in Jan-Aug RevPAR," the firm stressed.
Looking ahead to 1H17, OCBC believes the room supply injection will not be adequately matched by a growth in demand.
"Even though we remain positive on visitor arrivals for next year, the outlook for corporate demand remains weak. Furthermore, the supply overhang is set to worsen, contributing to downward pressures on RevPAR," it noted.
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