Singapore’s hospitality REITs aggressively lowered prices amid lacklustre performance

They also offered more promotions.

Absence of biennial events such as the Singapore Airshow, sluggish corporate demand and lacklustre tourist arrivals, especially Indonesians, resulted in a quiet season for Singapore’s hospitality sector.

According to a report by RHB Group, although occupancy rates for hospitality REITs were largely stable, RevPAR/RevPAU declines (for Singapore assets) ranged from 3.9%-11.0% YoY, which implies hospitality players have aggressively lowered prices and offered more promotions in order to boost their market share.

RHB adds that the outlook remains challenging as the large supply of new hotel rooms expected to enter the market would intensify competitive pressures. Some near-term reprieve would come from upcoming events such as the SEA Games and activities organised to commemorate Singapore’s Jubilee celebrations.