Nearly 2,000 new hotel rooms expected to open in Singapore this year | Real Estate Asia
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Nearly 2,000 new hotel rooms expected to open in Singapore this year

A total of 818 rooms were completed in Q1 alone.

At the end of 2022, JLL said Singapore counted 61,755 existing hotel rooms. Some planned openings were delayed in the past three years, and there were small-chain independent hotels reported to be permanently closed. 

However, the analyst said 2023 is expected to bring an influx of new supply as delayed projects open, and the market has seen a number of conversions and rebranding efforts.

Here’s more from JLL:

In 1Q23, 818 rooms entered the market, including the 270-room Mercure Singapore Tyrwhitt (formerly Parc Sovereign Hotel, Tyrwhitt Road), the 106-room Owen House by Hmlet, and the 442-room Momentus Hotel Alexandra (formerly Park Hotel Alexandra). Another 1,670 rooms are expected to open later in 2023, including properties like Mondrian, Pan Pacific Orchard and Pullman Singapore on Hill Street.

Tourism arrivals in 1Q23 reach two-thirds of 2019 levels

Singapore’s tourism industry continues to recover, with 2.9 million visitors arriving in 1Q23, representing 62% of 1Q19 levels. This surpassed the 1.5 million visitors reported for 1H22, while the average length of stay grew to 3.97 days. The Singapore Tourism Board forecasted 12-14 million international visitors for the full year of 2023, more than double the 6.3 million in 2022.

Indonesia was the top source market for Singapore tourism in 1Q23, accounting for 17.1% of total visitors, followed by Malaysia (8.9%), Australia (8.6%), India (6.6%) and South Korea (5.5%). In addition, the Chinese market has returned to the top ten, given the reopening of its borders. Yet, Chinese visitor arrivals and market share still lag behind 2019 levels due to limited airline capacity.

Luxury RevPAR in 1Q23 exceeds 1Q19 by 13%, driven by ADR

Luxury hotels maintained their strong performance in 1Q23, with an occupancy of 69.8%, an average daily rate (ADR) of SGD 487, and a revenue per available room (RevPAR) of SGD 340. While occupancy remains 6.0 ppts lower than the same period in 2019, ADR has exceeded its 2019 numbers by 21.6%.

Notably, the luxury sector had the highest RevPAR growth rate, surpassing 2019 levels. The upscale hotel segment in Singapore continues to lag behind 2019 levels in terms of RevPAR, while the midscale sector has seen a 7.6% growth in RevPAR compared to 1Q19. Before the pandemic, these segments would have benefited from Chinese tour groups, but this market has yet to fully recover.

Outlook: Singapore is expected to return to pre-COVID-19 levels by 2024

Singapore, as a safe haven market and gateway city in the Asia-Pacific region, is expected to continue its tourism recovery and lead the rebound in Southeast Asia. With diverse travel demand for leisure, corporate and MICE activities, the outlook for Singapore’s tourism industry remains positive.

Looking ahead, we anticipate that the Singapore hotel market will continue its rate positioning strategy while ramping up occupancy. Despite the expected influx of new supply in 2023 and 2024, the majority of these properties have a small key count (less than 200 keys). With strong tourism fundamentals, we expect trading performance to return to pre-COVID-19 levels by 2024.

Note: Singapore Hotels refers to Singapore's luxury hotel market.

 

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