Will hospitality REITs reflect depressing Q3 results?

RevPAR already fell 4% to $244.

As the results season kicks in, Singapore's hospitality real estate investment trusts (REITs) could expect dismal results for 3Q16, with the latest revenue per available room slipping 4% to $244.

DBS Group Research attributed this fall to the 1.8% decrease in occupancy to 79.1% with average daily room rate (ADR) also falling 2.3% to S$308.

"The weakness in September was attributed to excess supply, which grew 4% versus only a 2% increase in demand," the firm explained.

Quoting STR Global, DBS said some hotels were likely to be hit by various travel warnings following the spread of the Zika virus in Singapore. More so, the Formula 1 event this year has seen less cheer, as RevPAR during the event fell down 11% compared to the previous year.

"Heading into the upcoming results season, on the back of a decline in RevPAR in the third quarter, we expect the hospitality S-REITs to report another soft set of results," the brokerage firm noted.

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