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Growth to moderate at 5% over the next 3 years from historical peak of 20%.
According to DBS Vickers, compared with the historical growth rate of c.20% back in 2006 to 2008 when Singapore’s hospitality sector started revamping itself, we expect this sector to grow at a moderated growth rate of c.5% over the next three years due to a higher base In addition, global economic uncertainties, persisting in 2Q12, it said, should translate to reduced opportunities to raise rates.
However, DBS believes that the slowdown in corporate demand would be offset by stronger leisure tourist arrivals, in view of the upcoming F1 race in September 2012 and the progressive opening of new attractions (Marine Life Park and River Safari).
"The tight supply, especially in the core city area given the closure of Pan Pacific Singapore (790 rooms, representing close to 1.5% of total room supply in Singapore) for renovations (it is expected to re-open only in September 2012, in time for the Formula One race) should continue to keep occupancy and
rates steady," it said.
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