Hotels here have seen their growth affected by regional geopolitics and negative reactions to aviation incidents, property consultancy Cushman & Wakefield said on Monday (Jan 5).
In its latest report on the outlook of the hotel industry across Asia, Cushman & Wakefield said hotel occupancy in Singapore is expected to have fallen to 84.3 per cent in 2014, down from 86 per cent the previous year, due to a growing supply of rooms and the decline in tourist arrivals.
Still, Singapore remains one of the best performing markets in the region, with hotels here commanding the highest average room rate (ADR) in the region. Singapore’s ADR in 2014 was US$207 (S$276), ahead of Hong Kong at US$193 and Sydney at US$185.
However, Cushman & Wakefield said it will be difficult for hotels here to maintain their margins. “Although marginal growth in room rates are partially mitigating the slight downshift in occupancy, hoteliers will be challenged to sustain bottom-line margins in an environment of intensifying competition and growing costs,” it said in the report.
The property consultancy said it remains optimistic on the outlook for Singapore’s hotel industry, and expects demand to recover in the short term and keep pace with the growth in supply in the medium term.
Source : Channel NewsAsia – 5 Jan 2015