Even higher tourist arrivals won't help.
If the Singapore Tourism Board's lacklustre November hospitality statistics is anything to go by, then listed hotel owners will likely report soft results for the last quarter of the year.
Although tourist arrivals jumped 4.3% year-on-year to 1.2 million people, hotel rates still declined on back of a 6-7% increase in new room supply.
According to DBS, the average daily rate (ADR) for local hotels dropped 4% year-on-year to $243, while revenue per average room (RevPAR) declined to $210.
"The weakness in RevPAR and recovery in tourist arrivals was in line with our expectations, and the Singapore hospitality market is on track to hit our estimate of a 5%
fall in RevPAR and total visitor arrivals of c.15m in 2015," DBS said.
"Against this backdrop, we expect hotels under various SREITs to remain under pressure with the hospitality REITS delivering weak 4Q15 results," the report noted.
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