Hospitality REITs eye stronger Q1 earnings as hotel revenue jumps 11%

The recovery follows a dip in January, driven by a packed MICE and event calendar.

Singapore-listed hospitality real estate investment trusts (REITs) are expected to post improved performance for the first quarter (Q1) of FY2026, on the back of a recovery in hotel demand, according to a CGS International report.

The brokerage firm expects flat-to-positive hotel performance for March as revenue per available room rebounded 11% year-on-year (YoY) in February after a slight dip in January.

Data from the Singapore Tourism Board (STB) showed international tourist arrivals declined 8% YoY in January, before recovering 9% in February.

The rebound was attributed to seasonal and event-driven factors, including the timing of the Chinese New Year, as well as major events such as the Singapore Airshow and HSBC Golf Tournament.

Beyond the first quarter, CGS said that the country’s tourism outlook remains relatively resilient compared to other regions.

“We think Singapore’s visitor arrivals should hold up relatively better among different geographical regions, driven by the return of ‘Meetings, Incentives, Conventions & Exhibitions’ (MICE), sports and entertainment events in 2026,” it added.

The STB expects up to 18 million visitor arrivals this year, generating $31 to $32.5b in tourism receipts (TR). By 2040, the board projects TR to reach between $47b and $50b.

New attractions and capacity are also expected to support arrivals, with the latest Disney Cruise expected to contribute to around 120,000 international visitors this year based on its capacity of 6,700 passengers per sailing and 4-5 sailings per month.

“Assuming that 30-50% of passengers are international visitors,” the report said.

Moreover, the MICE industry will host the AAAI 2026 Annual Conference and the Herbalife Extravaganza 2026, which is expected to draw 25,000 visitors.

However, the US-Iran conflict may weaken long-haul travel demand, as higher airfares, longer routes, and economic uncertainty could delay travel in Q2 2026, with discretionary trips deferred and business travel rerouted.

In a separate RHB International Bank report, whilst suburban retail REITs are expected to benefit from the government's $1b support package amidst rising costs linked to the Middle East tensions, tourism-linked sectors still face continued pressure.

“Investors should monitor guidance given during the Q1 2026 reporting season,” it added.

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