Hotel revenues continue recovery in April as high-end room rates inch higher

HOTEL room revenue has hit its highest level since the Covid-19 pandemic began, as international visitor numbers continue to recover on border reopenings.

Singapore operators raked in S$180.5 million in April, according to recent Singapore Tourism Board data that also showed visitor arrivals surging to 294,304 in April, from 121,197 in March.

The improvement in industrywide room revenue – which also increased month on month, against S$151.9 million in March – came as both occupancies and average room rates (ARR) picked up further in April, pushing up revenue per available room (RevPAR).

Calvin Li, head of transaction advisory services for JLL Hotels & Hospitality Asia-Pacific, told The Business Times that the easing of most pandemic-era border controls “led to a much stronger increase in occupancy and pick-up than initially expected as leisure and business tourism arrivals rebound in tandem with the opening of South-east Asia more broadly”.

Occupancies hit 65.7 per cent in April, up from 59.6 per cent the month before, even as the industry continues to grapple with a manpower crunch that has limited the scope of operations.

Meanwhile, ARR rose to S$205.27, from S$189.53 before. The growth in April was seen across all hotel categories, with rates of S$86.09 in the economy segment, S$154.28 in the mid-tier segment, S$259.89 in the upscale segment, and S$416.35 in the luxury segment.

The outperformance by the higher-end market “could be a reflection of traveller profile with C-suite business travel and VFR (visiting friends and relatives), who may be willing to spend more on airlift,” said Govinda Singh, head of hotels and leisure for Asia at Colliers, while noting that room rates here are already closing in on their pre-pandemic levels.

Similarly, Li said: “Strong international demand, particularly arising from corporate travel, generally has higher purchasing power and is ready to pay a higher rate than staycation guests that were the main demand source in 2021.”

Room demand is still concentrated in areas such as the Central Business District, Marina Bay and Orchard, as international visitors have been led by corporate travel, he added.

Overall RevPAR thus rose to S$134.90 in April, up from S$112.95 in the previous month.

The rebound took room revenue to more than twice the S$83.5 million recorded in the year-ago period, although it was still down from S$324.9 million in April 2019, before the pandemic.

Noting travellers’ acceptance of higher costs for now, Singh said: “Singapore is the most open air hub and is clearly making the most of Hong Kong’s delayed reopening. As the initial novelty wears off, we would expect some normalisation in growth rates but, by (that) point, international demand, prices and labour markets may well have returned to pre-pandemic levels.”