Hotel sector heads into 2026 on firmer footing as tourism recovers: reports

For 2026, analysts expect moderate RevPAR growth, noting that ARR has likely peaked. 

Singapore’s hotel sector heads into 2026 on firmer footing as tourism continues to recover, with visitor arrivals for 2025 projected at about 17 million, roughly 90% of 2019 levels, according to Cushman & Wakefield.

China is the largest source market at around 2.5 million visitors in the first nine months of the year, or about 88% of pre-Covid volume, whilst flows from Indonesia and India remain below 2019 levels, weighed in part by a strong Singapore dollar.

Hotel performance in 2025 has softened. RevPAR is down 1.9% year-to-date, even as occupancy edges higher, and average room rates have levelled off after several years of gains, declining 2.6% year-to-date.

Singapore’s hotel sector is regaining momentum, with nearly 90% of operators expecting revenue growth in 2026 compared to a modest outlook for 2025, according to JLL.

The recovery will be driven mainly by higher occupancy, whilst room rates are expected to grow in line with inflation. Profit sentiment is also positive, as over 60% of operators anticipate GOP growth, supported by stabilising demand and stronger cost management. International demand and a slower supply pipeline are reinforcing confidence, with expectations that both occupancy and room rates will strengthen in 2026.

The luxury segment has held up best with only a 0.6% dip in rates, whilst economy occupancy is nearing pre-pandemic norms. Overall occupancy, however, is still about 4.9 percentage points below 2019.

For 2026, analysts expect moderate RevPAR growth, noting that ARR has likely peaked. The outlook hinges on easing labour bottlenecks and adding operational capacity, with technology adoption highlighted as essential for productivity.

Upgrading ageing stock through asset enhancement and refurbishment, along with rising co-living demand, are seen as further opportunities for owners.

Singapore also remains a top Asia-Pacific investment destination due to its stable politics, strong economy, and strategic location, according to CBRE.

The rebound in tourism and the rising demand for luxury and lifestyle hotels have boosted investor confidence. Despite higher operating costs and limited availability of prime assets, the hotel market remains attractive, with opportunities in long-term leases and property enhancements.

As of October 2025, licensed hotel and accommodation rooms in Singapore totalled 74,427, reflecting a steady 1.5% year-on-year increase, according to the Singapore Tourism Analytics Network.

On the supply side, the hotel room pipeline remains limited. Stock is set to grow by only around 1.3% a year from 2025 to 2029, far slower than the 4.6% a year seen from 2015 to 2019.

New rooms in 2026 will be modest, led by Varel Singapore, a Tribute Portfolio hotel with 128 keys, and Coliwoo 159 Jalan Loyang Besar with 350 rooms.

Brand activity remains strong, especially in the luxury and upscale segments. New entries in 2025 include The Laurus Sentosa (183 keys), Mett (84), and Mama Shelter (115). The forward pipeline features NoMad with 173 keys in 2027, Moxy Clarke Quay with 470, Avani with 200, and Aman with 11 in 2028.

A packed 2026 events calendar – including the Formula 1 Singapore Grand Prix, ITB Asia, ILTM Asia Pacific, and a strong roster of concerts and sports events – is expected to bolster leisure, corporate, and MICE demand through the year.