Hospitality Industry Shows Continuous Growth
Market Analysis and Report of 2019 & Beyond
2019 was a great year for the hotel industry. According to the market report, transactions in the hotel industry amounted to nearly $2.15 billion – a figure that has quadrupled from what it was in 2018. Transactions in 2018 stood at $544.69 million.
The investment volume in the industry is expected to rise by $2.4 billion which will include sale of hotel land sites.
The positive atmosphere is primarily due to the increase in tourist footfalls who have especially come to Singapore because of the meetings, incentives, conferencing, exhibitions or MICE events regularly held in the city.
Tourist arrivals to the city reached 11.1 million by July, 2019 reported Singapore Hotel Market Update 2019.
There have also been many events round the year in the city. In 2018 many high-profile events happened in Singapore such as the US and North Korea Summit in Sentosa, 51st ASEAN Foreign Ministers’ Meeting and the launch of Crazy Rich Asians’ Singapore set.
In the last three years, Singapore has consecutively witnessed record tourist footfall of about 18.5 million. The Changi Airport has itself handled passenger traffic of 65.5 million in the last 3 years.
Ever since STB or Singapore Tourism Board started keeping track of how hotels were performing in terms of trade, highest occupancy rate average was observed in every month.
2018’s momentum was carried forward to the next year and occupancy reached 93.9% by the seventh month of the year.
Many factors have played a role in this boom. New airline and flight roads have been introduced which led to tourists seeking accommodation in Singapore more than ever.
Jewel @ Changi Became Top Attractions Since its Opening
The Jewel Changi Airport opened in April, 2019 which further boosted the already positioned trading performance of hotels. This increase has not only boosted trade but the industry has seen a rise in investment as well.
The recent foreign capital influx has played a role. Example of Oakwood Premier QUE Singapore’s sale for $289m. It was bought through a joint venture by AMTD Group, a Hong Kong based financial services company and Dorsett Hospitality International, a hotel operator.
In the same year, an HNWI or high-net-worth individual from Bangladesh invested $169m to buy ibis Singapore Novena.
In 2019, another high value sale upped the prospects of the industry when Hoi Hup a local property developer invested $475m to buy Andaz Singapore a 342 roomed hotel.
It was the highest investment on a single asset – a record. This amount was also higher that Westin Singapore’s sale price which was reportedly sold for $468m in 2013.
The ADR or average daily rate in Singapore as well as occupancy has always been among the best in the Asia Pacific region.
The ADR from October 2018 to October 2019 was S$219.59. The occupancy levels had reached about 86.5% during that period mainly because of the steady rise in tourist footfall and a reducing supply pipeline.
According to the last data published by STB, RevPAR or revenue per available room raised up to 3.9% from October 2018 to October 2019.