Hotel occupancy rates remain steady as Singapore visitor arrivals pick up in October

SINGAPORE'S international visitor arrivals picked up in October from a month before, though hotel occupancy rates remained almost unchanged month-on-month.

Around 23,980 visitors touched down in October, 26.2 per cent more than the 19,000 in September, and higher by 79 per cent year-on-year, the latest figures from the Singapore Tourism Board (STB) showed.

Still, hotel occupancy rates remained mostly unchanged, hovering around the all-year high of 63 per cent in September and October.

Selena Ling, head of treasury research and strategy at OCBC, said one possible reason why hotel occupancy rates have not gone up with the higher visitorship is that the travellers hopping on the first flights to Singapore could be individuals reuniting with family members who may stay with relatives rather than book a hotel stay during their visit.

She also noted that with more Vaccinated Travel Lanes (VTLs) opening up, the business that hotels would receive from visitors serving their stay-home notices is gradually diminishing as well.

Some 6,060 visitors - or about a quarter of the month's international arrivals - hailed from mainland China, although their ranks dropped by about a third, from 8,950 in September.

India came in second place, sending 2,930 visitors to Singapore in October, the same month that the Republic relaxed its border measures to allow visitors from India and 5 other South Asian countries to enter.

Separately, revenue per available room (RevPAR) and the average room rate edged up slightly for the month of October.

RevPAR climbed to a new high of S$101.97 in October, against S$100.17 in September. Average room rates also rose to S$162.09, from S$158.11 previously, but this was still below the year's peak of S$166.97 in April.

In all, the overall hotel industry room revenue rose to S$80 million, up from S$75.9 million in September.

Looking ahead to the year-end festive season, DBS Group Research analyst Geraldine Wong expects the VTLs to bring in more international travellers to Singapore, noting that the quarantine-free arrangement with Germany has brought monthly inbound visitorship from the country up fivefold since it was rolled out in September.

She expects hotels' daily rates to return to pre-Covid levels during December, even potentially surpassing that level, as many Singaporeans would also still be looking for local holiday options, such as staycations, to spend the festive season.

But CIMB economist Song Seng Wun noted that given how unpredictable the pandemic has been so far, there could still be more hurdles along the way that may dampen recovery, such as news of the heavily-mutated Covid-19 variant detected in South Africa.

"(The news of the new variant) has thrown a spanner in the works ... The next couple of months will be a turning point on whether we get sustainable broad-based recovery into 2022, or whether we will see more twists and turns," he said.

Still, Calvin Li, head of transaction advisory services Asia-Pacific at JLL Hotels and Hospitality, said that it is still too early to predict how the news of the new coronavirus variant will affect the sector's recovery.

"If the new variant extends to other countries, especially in the Asia-Pacific, this should impact and slow down the recovery pace that Singapore has engaged."