Why 2014 will be a better year for Singapore hoteliers

2014 tourist arrivals pegged at 16.8m.

According to DBS, the Singapore Tourism Board (STB) has set a target of 16.3m - 16.8m visitor arrivals for 2014, representing a growth rate of 5 - 8% on a y-o-y basis. DBS believes that 2014 will be a better year for hoteliers, with stronger expected visitor arrivals to be driven by higher volumes of business travellers in 2014.

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This is on the back of a robust line-up of MICE events planned throughout the year. In addition, the opening of the sports hub in Jun'14 will also add an additional dimension to Singapore’s product offering to visitors. Ample supply to limit significant upside to RevPAR.

With higher business volumes, 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.

A key limiting factor to a more bullish forecast for RevPAR growth is the completion of close to an estimated 3,000 new rooms (c.5% growth in supply), where we will see major hotel chains opening in the CBD (Sofitel So Singapore, 134 rooms; and Holiday Inn Express Clarke Quay, 442 rooms) and Orchard Road (Hotel Grand Central, 990 rooms; and Traders Hotel, 502 rooms).