FEHT faces challenges from eroded ADR
Downsides may be offset by Singaporeans going on staycations.
The Far East Hospitality Trust (FEHT) may face a challenging quarter as the average daily rate (ADR) for hotels deployed as dedicated Stay-Home-Notice (SHN) facilities and government quarantine facilities (GQF) has been eroded, according to UOB Kay Hian.
“The operating model for such government contracts is now based on open tender since 20 September. As such, the average daily rate for hotels deployed as dedicated SHN facilities and GQFs has been eroded. The ADR for accommodation for Malaysian workers displaced by Malaysia’s Movement Control Order has also declined, as some Malaysian workers have started to rent rooms at HDB estates,” UOB Kay Hian said.
However, they added that this may be partially offset by Singaporeans going on staycations starting 20 December though volume of visitor arrivals remain low due to cautious approach in the gradual reopening of Singapore’s borders.
This is further reiterated by the SingapoRediscovers voucher worth $100 that is given to all Singaporeans age 18 and above that will stimulate local demand for staycations in the coming holidays.
“Management expects volumes for staycations to pick up when Singaporeans start to redeem their S$100 SingapoRediscovers Vouchers from 1 December,” UOB Kay Hian said.