Budget hotels near recovery as wider market lags

High-profile tourists events are expected to underpin demand.

Occupancy at economy hotels is nearing pre-pandemic levels, contrasting with the broader hotel market, where islandwide occupancy remains about 6.5 percentage points below 2019 levels and revenue per available room has weakened amidst softer demand and lower room rates, a report by Cushman & Wakefield revealed.

Hotel revenue per available room (RevPAR) has weakened, driven by a combination of declining occupancy and softer average daily rates across most hotel tiers. Luxury average room rate (ARR) continues to grow; however, softer occupancy levels have led to a fall in RevPAR.

The decline in luxury RevPAR was relatively limited at -1.2% ytd, outperforming the broader market, which recorded a -2.3% contraction.

International visitor arrivals reached seven million visitors in 2026 year-to-date (as of May), a slight decline of 1.2% year-on-year, on the back of elevated fuel costs and geopolitical tensions which have weighed on overall travel demand.

Cushman & Wakefield, however, said that Singapore has remained relatively resilient as a tourism hub, given its position as a predominantly point-to-point destination with a high proportion of direct flight connectivity, and Singapore’s status as leading business hub.

“We remain sanguine that international arrivals in 2026 could still exceed prior-year levels, driven by a potentially stronger second half as uncertainties in the Middle East ease, and supported by a healthy pipeline of entertainment and business events,” Cushman & Wakefield said.

High-profile entertainment events, including the Formula 1 Singapore Grand Prix in October and BTS’ four-night concert, are expected to underpin tourism demand.

Hotel room supply growth is expected slow down to an average of 1.5% per annum between 2026 and 2030, compared to the pre-pandemic average annual hotel supply growth of 4.6% between 2015 and 2019.

The majority of new hotel supply in 2026 will be from the mid-tier and economy segments. Upcoming notable completions in 2026 include Handwritten Collection Hotel on Waterloo Street (opened in Q1 2026, 502 rooms) and Coliwoo Resort Changi (382 rooms).

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