Oasia Hotel comes under Far East Hospitality Trust, Singapore’s largest hotels and serviced residences operator. For the first quarter of 2015, the trust posted a 17.7 per cent drop year-on-year, in distribution per stapled security.
It came in at 1.07 Singapore cents for the first quarter ended March. That is on the back of a 10.8 per cent fall in gross revenue, to S$27.37 million.
Analysts Channel NewsAsia spoke to said the results are in line with industry expectations, as the economy- and mid-tier hotel segments were the most affected by the drop in the number of visitor arrivals, especially from Indonesia and China.
“Currency is a major issue. Because of the strong Sing dollar, it is a dampener for a lot of tourists coming to Singapore,” said managing director of Chestertons Donald Han.
“The people that come to Singapore are your Chinese, your Indonesians. They’re basically your value-for-money customers. These are the top two markets, and they’re looking into going to markets where potentially they get better affordability and better returns for their currency.”
Chestertons said the average occupancy rate of Singapore hotels dipped 0.9 percent year-on-year to 85.5 per cent in 2014. And the average room rate of hotels in Singapore declined 0.2 per cent to S$257.7 per room per night.
In comparison, the luxury segment has been holding up well, even achieving one of the highest room rates in the past few years.
“Luxury at the moment has been naturally achieving the highest occupancy levels, which is surprising because traditionally it’s the mid-tier economy that does better,” said executive director of Asia Pacific CBRE Hotels Robert Mcintosh.
“That suggests quite a lot of pent-up demand for the luxury elements, and over time that has enabled them to lift their room rates faster than the other segments, so it shows you that Singapore has perhaps managed to position itself quite well in terms of the types of tourists it’s been trying to get,” he said.
For this year, Singapore Tourism Board is expecting visitor arrivals to remain flat or to grow modestly by up to 3 per cent to 15.5 million.
Some analysts have said that events and attractions in 2015 could potentially provide a boost for the hospitality industry.
Said Mr Han: “Overall, we expect continued headwinds in the hotel market. The good news of course, in 2015, is that there are high-impact attractions that will spring up. These include the SEA Games which will start in June, and you’ve got your National Gallery Singapore that will open this year, plus a lot of international sports events that will bring in the crowd. And this is SG50, where there is a lot of celebrations.”
According to Chestertons, 13 new hotels will be completed this year – about 40 per cent of which will be categorised as mid-tier and 32 per cent will be classified as upscale.
Altogether they will add more than 4,000 rooms. This increase in supply, coupled with sluggish demand, means competition within the mass market will remain intense, analysts said.
Source : Channel NewsAsia – 29 Apr 2015