Singapore hotels’ average room rate slips to 7-month low in March; overall revenue rises

SINGAPORE hotels’ average room rate (ARR), revenue per available room (RevPAR) and occupancy rates dipped in March, after February data recorded recovery from January’s falls.

Overall room revenue, however, rose to the highest since November 2022, Singapore Tourism Board (STB) data showed on Friday (Apr 28).

The latest figures came as tourist arrivals surpassed one million in the month, for the first time since the onset of the pandemic in 2020.

ARR fell 5.1 per cent in March to S$264.12, from February’s revised S$278.21, going by STB’s figures. This marked the lowest rate since August 2022, where ARR was S$250.22.

On the year, ARR was up 39.1 per cent, compared to March 2022, before Singapore’s border reopening.

Overall hotel room revenue in March was S$371 million, rising both month on month and year on year (yoy). It was up 4.7 per cent sequentially in March, from S$354.3 million in February. It grew almost 1.5 times on the year.

“The growth in overall room revenue could be due to an expansion in hotel operating capacity in anticipation of higher tourist arrivals,” said Cushman & Wakefield head of research Wong Xian Yang. This led to rising available room nights, which was up 14.5 per cent month on month in March, he noted.

“While hotel demand did increase, it seems to have lagged behind the increase in available room nights,” he said, adding that this resulted in falling ARR and RevPAR.

RevPAR declined 9.4 per cent to S$210.62 in March, from S$232.60 in the preceding month. It was up 83 per cent yoy.

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At 79.8 per cent, March’s average occupancy rate was also down from February’s 83.6 per cent, and under the pre-pandemic rate of 83 per cent in January 2020. But it was 19.1 per cent higher yoy.

Jesper Palmqvist, area director for Asia-Pacific at hotel industry research firm STR, believes that the drop in occupancy rate is due to the Hari Raya holidays, which may limit travellers from countries with large Muslim populations such as Indonesia and Malaysia in the latter half of the month.

“The fact that we are dependent way more on Indonesians and Malaysians (compared to a reliance on Chinese tourists in pre-Covid years) also makes the Hari Raya effect strong,” he added.

Across hotel categories, performances worsened in March, with lower ARRs for all hotel types compared to the month before, STB data showed. It was down to S$553.18 in the luxury segment, S$311.11 in the upscale segment, S$212.10 in the mid-tier segment and S$140.16 in the economy segment.

Palmqvist noted that historically, it is the norm for March ARR and occupancy to be lower than in Feb. However, it is notable that even as occupancy fell, room rates, particularly for higher-end hotels in the Marina Bay area, continued to grow during the Hari Raya period this year, which spans mid-March to mid-April. (*see amendment note)

“We’re on an upward trajectory,” he said. “Hotels already have a high performance now,” despite the “missing” Chinese tourists and mid-week corporate business travel, he noted, adding that STR forecasts “an even better result” for the end of the year.

Based on STB data, in the year to date, room revenue has surpassed the one-billion mark to hit S$1.04 billion, surging 190.5 per cent from the corresponding year-ago period. ARR, at S$271.85, was up 46.2 per cent, RevPAR rose 86.1 per cent to S$211.23, while average occupancy rate grew 16.7 per cent to 77.7 per cent.

*Amendment note: A previous version of the story incorrectly stated that hotel rates were up on the month in March due to Marina Bay Sands. They were in fact increasing over the Hari Raya period, led by Marina Bay area hotels.