But Singapore remains a notable exception among its neighbours, having faced 35 months of negative RevPAR growth. Hotel demand had been chasing supply until a break in 2017, a first in four years.
Buoyed by the growth in intra-Asia Pacific travel and a slight cool in hotel supply, hoteliers around Asia Pacific fielded fairly even growth performances, with Revenue per available room (RevPAR) averaging 3.5% last year, this according to a Hotel Review and Performance Outlook presented by STR’s Jesper Palmqvist at the recent HICAP Update 2018 held from March 28 - 29.
But Singapore remains a notable exception among its neighbours, having faced 35 months of negative RevPAR growth. Hotel demand had been chasing supply until a break in 2017, a first in four years.
The luxury segment in particular has been facing decline. This was not so four years ago, where the luxury tier was outperforming the select service and economy tiers. The top end has not since seen much new supply. Despite occupancy holding steady at 80%, RevPAR has seen a drop as much as 20-30%.
For many of the older hotels in Singapore, the challenge to keep up with newer hotels through costly refurbishments are necessary so that they do not lose out their market share, shared KC Moy, executive vice president of Capella Hotel Group.
Marriott International’s senior vice president of hotel development in Asia Pacific Shawn Hill shared that it expects to reign costs in, leveraging on its size as a large company. This is amid the 3- to 3.5% rise in labour costs, and rising costs in areas such as food, utilities and sales.
Hoteliers remain hopeful that the market will pick up, having seen a healthy demand over the Chinese New Year period and with the overall positive economic trajectory.
Higher gross operating profits are expected going forward through productivity gains through technology initiatives in areas such as mobile check-ins, which saw a 70% increase in Asia Pacific, and services requests via app.