Mid-tier hotels' RevPARs decline 4.1% in Q1
Economy and upscale hotels’ RevPARs also clocked declines.
Whilst there was a 4% increase in tourist arrivals staying in Singapore 2.3% longer in Q1, overall revenue per available room of the hospitality sector stayed flat with a 0.4% growth YoY.
Citing figures from the Singapore Tourism Board (STB), OCBC Investment Research said the muted growth came from the slump in hotel RevPARs.
Hotels in the Economy, Mid-tier, and Upscale tiers all clocked declines of -1.8%, -4.1%, and -0.6% YoY, respectively.
"Given that the hospitality REITs under our coverage own hotels mainly in the Mid-tier and Upscale tiers, RevPAR declines reported by the REITs are in line with these STB figures reported for 1Q17," the brokerage firm said.
Here's more from OCBC Investment Research:
1Q17 RevPAR for CDLHT’s hotel portfolio, OUEHT’s Mandarin Orchard, and FEHT’s hotel portfolio clocked declines of -0.8%. -2.3% and -4.6% YoY, respectively.
As for serviced residences (SRs), 1Q17 RevPAU for ART’s portfolio, and FEHT’s portfolio dropped 11% and 14.0% YoY, respectively.
As we noted in previous reports recently, we expect a significant supply injection in 2Q17 with ~2.8k rooms expected to come onstream and thus poorer RevPAR and RevPAU performance later in the year.
In contrast, the hotel room supply is estimated to have increased by only ~130 rooms in 1Q17.