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Why 2014 is predicted to be a good year for Singapore hoteliers
High-end hotels will be outperformers.
According to DBS, given the lower-than-expected supply completions, they believe that 2014 is firming up to be a stronger-than-expected year for most hoteliers.
To recap, they believe that the upscale and midtier segments will rebound strongly, given expected higher business volumes.
Here's more from DBS:
We expect hoteliers to report better results in 2014, with the upscale/mid-tier hotels delivering the strongest rebound in RevPAR (c.3-4%) after a dreadful 2013, where RevPAR declined by >10% due to weak business travel demand.
Hotel statistics in Jan-Feb’14 even higher than in 2012. This trend seems to be playing out according to our expectations.
Based on latest updates on hotel performance from Jan-Feb’14, average industry RevPAR increased by c.4% y-o-y to S$243/night.
This is supported by high average occupancy levels of c.86%, with Feb’14 turning out even stronger at c.90% due to the Singapore Air Show.
Among the various subsectors, the upscale and luxury hotels did well with a c.4% and c.6% rise in RevPARs respectively.
However, the recovery in average RevPARs for the sector remains flattish/below levels for most hotels when compared to levels achieved back in 2012, with the exception of the luxury sector.
We believe that RevPARs for the upscale/mid-tier segment remain lower due to an expanded supply from recent hotel completions.
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