Chart of the Day: Hotel room inventory predicted to jump 9%

Hotels hurt by rising competition.

According to DBS Vickers, hoteliers’ performances impacted by increased competition from new hotels.

While total hotel room revenues (based on STB survey with gazetted hotels) have increased by a modest 2.4% to S$1.4bn in 1H13.

Here's more from DBS Vickers:

This was largely brought about by an increase in hotel room inventory, due to new hotel openings.

With increased competition, hoteliers are continuing to feel the pressure on rates, owing to (i) a weak corporate travel market due to tighter budgets, (ii) increased competition from newly opened hotels which, based on our understanding, typically price their rooms cheaply in order to gain market share.

Industry RevPAR declined by c2.1% to S$219/night, which was largely brought about by a 1.9% drop in average daily rate (ADR) to S$254/night. Occupancy rates remain steady at c86%.