Singapore hotel (RevPAR)in 1Q 2016 dipped 2.3% y-o-y despite a 13.8% y-o-y growth in tourist numbers.
Investment bank UOB Kay Hian has pointed to the arrival in Singapore of Chinese tourists with limited spending power as a key reason for a “puzzling disconnect” between surging tourist arrivals and lower hotel revenue per available room (RevPAR).
Singapore hotel (RevPAR)in 1Q 2016 dipped 2.3% y-o-y despite a 13.8% y-o-y growth in tourist numbers.
UOB’s analysts Derek Chang and Vikrant Pandey said STB’s latest tourism performance report highlighted “a clear weakening” in per capita tourist hotel expenditure.
“Likely causes for the weaker spend include the influx of Chinese tourists with tighter purse strings, currency impact and a shorter stay.”
The analysts said even as the number of Chinese tourists grew 46.9% y-o-y in 1Q, “this was partly due to STB’s efforts to court Chinese tourists from secondary cities, such as Tianjin and Chongqing, through platforms like Alipay”.
“Our channel checks suggest these visitors came in tour groups and are usually budget-conscious on accommodation. Singapore hospitality REITs also largely do not cater to such tour groups as they operate in the mid- and upper-tier segments,” Chang and Pandey said.
Hoteliers in Singapore remain cautious about the outlook for the rest of the year given the growing number of Zika cases – currently 115 – reported in the city-state.
Travel advisories citing Zika concerns have been issued by government authorities in United States, United Kingdom, Australia, South Korea and Taiwan, while Malaysia has implemented thermal screening at checkpoints for travellers who enter Singapore by bus.