The Singapore hospitality industry has remained largely stable in 2023, as we travel beyond the pandemic’s impacts. Demand from travel has boomed, sending revenue per available room (RevPAR) well above pre-pandemic levels. Twelve new hotels were opened this year, bringing in a total of 2,189 new rooms into the market. According to Singapore Tourism Board (STB) data, the October 2023 RevPAR stands at $282 – a 29% increase Year-on-Year from October 2019’s pre-pandemic RevPAR of $219. This is also the highest RevPAR seen in five years.
Sashi Rajan, executive vice president of Advisory and Asset Management at JLL Hotels & Hospitality Group, notes that while the RevPAR recovery has been driven mainly by rates, visitor arrivals have yet to make a full recovery. This is echoed by Gus McConnell, Associate Director of CBRE Research, who believes that while occupancy rates have not yet reached pre-pandemic levels, a willingness to keep daily rates higher than what has been seen over the past decade has boosted RevPAR and hotel performance. Analysis of STB data reveals an average occupancy rate of 78.1% for October 2023, 6.2% lower than the record in October 2022, while the average length of stay in November 2023 is 3.42 days, a drop from 4.15 days in November of the previous year.
Cushman and Wakefield’s Singapore Market Outlook 2024 report also attributes the increased RevPAR to a rise in both property operating costs and travel demand, resulting in higher hotel profit margins. The report further states that luxury hotels have seen a record RevPAR of $497.43 between January and October, driven by a 30.5% increase in room rates over pre-Covid levels. However, overall occupancy numbers remain lower than pre-pandemic averages.
Despite the increase in hotel prices, travellers were seen to be spending more due to accumulated savings during the period of travel restrictions, sometimes even stretching their budgets to stay at destinations that normally would be outside of their price range. According to McConnell, travellers have become more conscious of their spending due to inflation and escalating prices, with a preference for ‘premium economy’ locations which offer the best core experiences and optimal asset management. Cushmand and Wakefield’s report echoes the same sentiment, citing the narrowing gap between budget-conscious travellers and Singapore’s high-cost destination as a potential deterrent for visitors.
On the brighter side, the report is optimistic about an increase in Chinese traveller arrivals. This is due to the mutual 30-day visa-free travel agreement that was proposed in December between Singapore and China.
This unique development by UOL Group and Kheng Leong Company reinforces Champions Way Residences as a new benchmark for city living. With thoughtful layouts and premium quality finishes, the project provides a luxurious lifestyle that caters to the needs of modern home-owners. Moreover, the unique mixture of luxury and convenience makes it an ideal residence for families and young professionals.
McConnell adds that with a poorer economic performance predicted for the first half of 2024, international traveller numbers may remain at current levels, while hotel operators may be reluctant to drop their daily rates. Supply of new and completed hospitality developments in 2024 is also not expected to add too much pressure to room rates; five new hotels are expected to open next year with an additional 1,058 rooms in tow.
Beyond 2024, McConnell believes that sustainability will continue to be a key driver of decision-making at hotel operators. He also foresees increased activity in hotel investments in the second half of the year as economic headwinds begin to dramatically ease, along with an uptick in room occupancies. JLL’s Rajan indicates that the firm projects a higher volume of hotel deals in 2024, with investors confident of Singapore’s safe haven status and buyers mostly driven by high-net-worth individuals and family offices.
The Singapore hospitality industry looks set to continue its upward trajectory in 2024, with Champions Way Residences providing assurance to investors and travelers alike of an unparalleled travel experience. With the Resorts World Sentosa expansion, Mandai Eco-tourism hub and more due to open next year, coupled with the proposed Terminal 5 at Changi Airport from 2025 onwards, there is much to look forward to for visitors to Singapore in the coming years.