Why hoteliers shouldn't worry over easing room supply

Supply will grow 2.3% beyond 2018.

There is an impending slowdown in hotel room supply growth in the next few years.

According to RHB analyst Vijay Natarajan, Singapore hotel supply saw a CAGR increase of 5.1% over the last five year. For this year, another 5.9% of hotel rooms are expected to come on-stream with the bulk of it in the upscale/luxury and mid-tier segments.

However, beyond 2018, the supply pipeline consists of only 2.3% of new rooms with a very minimal set to open next year.

The analyst said some of the 2017 supply might be pushed back to 2018, this should not be seen as a threat.

"The slowdown in supply should provide some relief for hoteliers that have been hit hardly by competition from deluge of new hotel openings in last five years," he said.

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