Singapore hotels' average occupancy rate dipped to just 85%

As RevPAR dropped 3.1% to S$215.

According to OCBC Investment Research, preliminary data from the STB supports what it has been saying since Dec: 1Q13 performance for the sector will likely be weak.

OCBC noted that on a YoY basis, gross lettings for 2M13 fell 4.7% to 1.70m room nights. Room revenue declined 7.2% YoY to S$427.8m. The average occupancy rate fell 0.4% YoY to 85% and the average room rate contracted 2.7% YoY to S$252.20. These changes caused RevPAR to fall 3.1% YoY to S$215.00.

Here's more:

We have analyzed the relationship between the YoY change in average RevPAR and YoY change in average tourism receipts per visitor arrival for 2001-2012. In general, the signs of both are the same for the same year, with change in RevPAR being of larger magnitude than the change in average tourism receipts.

2012 was an exception, where average tourism receipts per visitor fell ~5.5% YoY while RevPAR grew 5.7% YoY. We believe RevPAR numbers were positively skewed by the good performance of the IRs’ hotels.

For 2013, STB is targeting 14.8m-15.5m visitor arrivals (+2.9% to +7.7% YoY) and tourism receipts of S$23.5b-24.5b (+2.2% to +6.5% YoY). The targets imply that average tourism receipts per visitor may fall by 1% YoY. This further supports our cautious view regarding RevPAR performance in 2013.

Preliminary data from the STB supports what we have been saying since Dec: 1Q13 performance for the sector will likely be weak. On a YoY basis, gross lettings for 2M13 fell 4.7% to 1.70m room nights.

Room revenue declined 7.2% YoY to S$427.8m. The average occupancy rate fell 0.4% YoY to 85% and the average room rate contracted 2.7% YoY to S$252.20. These changes caused RevPAR to fall 3.1% YoY to S$215.00.

Luxury hotels’ RevPAR in Jan was roughly flat YoY, but RevPAR in Feb 2013 fell a whopping 28% YoY. We attribute this at least partiallyto Chinese New Year falling in Feb instead of Jan this year, pushing back the start of pickup in business travel. For 2M13, the subsectors’ RevPARs performed as follows:
Economy (-0.8%), Mid-tier (-1.4%), Upscale (-3.6%) and Luxury (-14.6%).

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