Singapore hotels’ average room revenue steady in June, overall room revenue slips

SINGAPORE hotels’ average room rate (ARR) was mostly unchanged in June – inching up to S$273.85 and posting a 0.3 per cent increase from May’s S$273.10. This marked a 14.2 per cent jump year on year, Singapore Tourism Board (STB) data showed on Wednesday (Jul 26).

While the revenue per available room (RevPAR) and average occupancy rate also grew sequentially, overall room revenue slipped – possibly due to fewer available room nights.

The latest figures came as tourist arrivals surpassed one million for the fourth straight month. Singapore’s border restrictions eased in April last year, with no Covid-19 tests necessary regardless of vaccination status for visitors from Apr 26, 2022.

RevPAR climbed 1.9 per cent on the month to S$220.92, from May’s S$216.70. It was up 18 per cent on the year.

June’s average occupancy rate – at 80.7 per cent – also marked an improvement from May’s 79.3 per cent, though it remains under the 83 per cent occupancy recorded in pre-pandemic January 2020. On the year, it was up 2.5 per cent.

“Hotel occupancy rates will likely hover at around 80 per cent given the tight supply,” said Maybank economist Chua Hak Bin.

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Visitor arrivals will continue to rise at a more measured pace, but arrivals from China will grow relatively more quickly to overtake Australia and India by year-end, as more flights are restored, he added.

Overall room revenue dropped 2.3 per cent to S$389.4 million, from May’s record S$398.7 million. However, it was up 37.4 per cent year on year.

The sequential drop in overall room revenue is likely due to a decline in available room nights (1.76 million in June against 1.84 million in May), despite higher room and occupancy rates, Chua said.

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Singapore tourist arrivals up in June, surpass one million for fourth straight month

“About 77,600 room nights were taken off the market in June. Presumably a few hotels have been closed for renovation,” he added. “Room nights available for occupancy exclude rooms closed for renovation and staff use, as declared in the statutory forms on a daily basis.”

Across hotel categories, ARR was mixed in June. In the luxury segment, it was up sequentially to S$572.55 and ARR in the economy segment grew to S$145.02. But the upscale segment posted a fall in ARR to S$322.06, and it dipped to S$211.38 in the mid-tier segment.

Based on STB data, in the year to date, room revenue reached S$2.2 billion in June, surging 107.3 per cent from the corresponding year-ago period. ARR for the first half of 2023, at S$272.38, gained 29.3 per cent; RevPAR rose 50.5 per cent to S$213.56; and the average occupancy rate grew 11 per cent to 78.4 per cent.

“Singapore’s recent success in securing concerts, including celebrities like Taylor Swift, will help draw visitors and support hospitality. Being a concert hub for South-east Asia will draw the higher-value end of the tourism spectrum – the more affluent, big spenders and high rollers,” Chua said.

“The luxury and upscale hotel segment will likely see meaningful increases in their room rates during the busy concert periods, mirroring the F1 impact.”