Hotel, Tourism and Leisure. Special Market Reports Issue 18 - SINGAPORE

Transcription

1 Hotel, Tourism and Leisure Special Market Reports Issue 18 - SINGAPORE

2 SINGAPORE OUTLOOK Singapore s tourism market is positioned for growth, but the city still could face pressure in the near term. SINGAPORE TOURISM ARRIVALS, 1999-YTD NOVEMBER 2013 International arrivals to Singapore for the first 11 months of 2013 grew 7.2% to 14 million from the previous year based on preliminary figures, according to Singapore s Tourism Board. Arrivals exceeding 14 million before the full 12-month period is a first in Singapore s history. The prevailing hot topic of the phenomenal potential of the Asian Century is supported in the growing share of Singapore s regional source market contribution. More than 76% (more than 11 million) of visitors in 2012 were Asians compared to 73% (more than 6.5 million) during 2005, according to the Tourism Board. Visitors from Europe decreased in contribution from 13% in 2005 to 11% in Contribution from Oceania, Americas and Africa for the year 2012 stood at 8%, 4% and less than 1%, respectively. Visitor arrivals to Singapore have been on the rise, and the tourism market s outlook in the coming year remains cautiously optimistic. On a country level, the top five visitor source markets in 2012 remained relatively similar over the past decade, with Indonesia being the largest source market, followed by China, Malaysia, Australia and India, according to the Tourism Board. The strong continuous growth in year-on-year arrivals to Singapore, although moderating (2010: 20%, 2011: 13%, 2012: 10%, according to the Tourism Board), is an apparent measure of the success for the numerous dedicated projects introduced to the market over the past few years, all with the objective to elevate Singapore s appeal as a tourism destination. Spicing up the landscape of the city include the on-going Formula One race that began in 2008; the opening of the integrated resorts in 2010, Marina Bay Sands and Resorts World Sentosa; the grand opening of Universal Studios Singapore in 2011; and the completion of Gardens by the Bay in Key additions in 2013 included the completion of the Marine Life Park in Sentosa and the River Safari comprising a Giant Panda enclosure (Asia s only riverthemed zoo). Year-to-date November, luxury was the only segment to record ADR growth in Singapore. Through November, Singapore s RevPAR declined 1% year-on-year to SG$224 ($176.32).

3 HOTEL MARKET OVERVIEW Available roomnights from January to November 2013 increased 5.5% to 12 million over the same period in 2012, but was well absorbed by the increase in arrivals to continue 2012 s occupancy of 87%, according to the Tourism Board. Mid-tier roomnight supply contributed most of the new additions for the year, with openings including: Holiday Inn Express Singapore Orchard Road (221 rooms); Ramada Singapore at Zhongshan Park (384 rooms); Days Hotel Singapore at Zhongshan Park (405 rooms); and Carlton City Hotel (386 rooms). The upscale hotel segment suffered the largest decrease of 10.5%, followed by the economy segment with a 7.9% decrease and the mid-tier segment with a 3.5% drop. The strengthening luxury demand in Singapore is apparent as the segment posted the only ADR increase during 2013 while recording the highest growth in occupancy to 88%. Nonetheless, the ability of the luxury segment to increase occupancy and ADR levels, amid lesser performances recorded by the other hotel segments, is largely due to the much lower growth in luxury competitive supply compared to the economy, mid-tier and upscale segments, according to the Tourism Board. Only a few hotels positioned at the upscale and luxury levels added rooms to the market in 2013, including The Westin Singapore with 305 luxury rooms in November and the 172-room Pan Pacific Serviced Suites Beach Road in May. SINGAPORE HOTEL ROOMNIGHTS: SUPPLY, DEMAND AND OCCUPANCY, 1992 TO YTD NOVEMBER 2013 At the end of November 2013, the overall market revenue per available room was Singapore dollars ($177.10), a decline of 1.3% year on year. The negative growth was mostly led by the upscale segment s and economy segment s declines of 12.3% and 8.6%, respectively. While the decreases do not post a significant concern for the Singapore hotel market, as the occupancy levels across all segments are still more than 80% and often even near full capacity, the recent tightening on the foreign workers quota is expected to put pressure on operating costs. SINGAPORE MARKET OCCUPANCY, ADR & REVPAR, 1992 TO YTD NOVEMBER 2013 According to Singapore Tourism Board, January to November 2013 recorded a year-on-year drop of 1.3% in the market average daily rate. The luxury segment was the only segment to record growth at 1.4%, with October and November recording exceptional year-on-year growth of 5.6% and 8.6%, respectively.

4 PERFORMANCE BY HOTEL POSITIONING SEGMENTS, 2011 TO YTD NOVEMBER 2013 This is substantially higher than the reported 2012 average transaction price of SG$700,000 ($553,184) per key. Notable transactions for the year include several sales of hotels: Westin Hotel for SG$468 million ($369 million), a record SG$1.5 million ($1.2 million) per room; In 2013, Singapore hotel transactions were impressive in contrast to the softening operating environment. While acquisition cap rates reportedly were compressed for some transactions, the average price for most transactions in 2013 was more than SG$1 million ($790,263) per key, according to an HSBC report. Hotel Gallery for SG$230 million ($181.8 million), or SG$1 million ($790,263) per room; Berjaya Hotel for SG$50 million ($39.5 million), or SG$1 million per room ($790,263), Park Hotel Clarke Quay for SG$300 million ($237.1 million), or SG$890,000 per room ($703,334); and Rendezvous Grand Hotel for SG$264 million ($208.6 million), or SG$890,000 ($703,334) per room.

5 THE YEAR AHEAD The continued global economic recovery bodes well for Singapore s near-term future, although rising business costs and dearth of skilled labor pose threats and restrictions to the growth potential of businesses. The year ahead will bring a similar forecast of cautious optimism for the hospitality industry, although new offerings are likely to continue facilitating tourism growth. New attractions slated for 2014 include: The National Gallery s will house the world s largest public collection of modern southeast Asia and local art; and the Singapore Sports Hub will feature key sporting and entertainment events, including the secured five-year hosting contract for the Women s Tennis Association championships starting in October However, many limitations pose genuine threats to the future of Singapore s tourism industry, including infrastructure constraints, limited manpower resources and keen regional competition for the same tourism pie. What Singapore holds unique as its own will be challenged, with such competition as South Korea s proposed integrated resorts and Penang, Malaysia s MICE facilities development of similar proportions and management. Noting this, the Singapore Tourism Board s response with initiatives gearing toward a more visitor-centric and local-involvement focus will transform Singapore s tourism scene that should help sustain the industry through the years ahead. Standing in the forefront of Singapore s tourism growth is the meetings, incentives, conventions and exhibitions industry, with the city s 11th consecutive year as Asia s Top Convention City from 2012 expected to continue. WRITTEN BY: Enhancing Singapore s MICE destination appeal is the rising number of non-traditional venues that have integrated MICE facilities with unique leisure offerings. Such venues include Gardens by the Bay, where its lush garden setting has made it a popular event venue for concerts and MICE events; and the world s largest Oceanarium, where the Marine Life Park s cavernous venue has played host to numerous events including product launches and fashion shows s hotel pipeline includes several highly anticipated openings, such as Sofitel So and Singapore s second Holiday Inn Express and Traders hotels. The rise in supply will be well met by the growth in demand spurred by the overall expansions across most trades and industries in Singapore. CLARE FU Consultant Horwath HTL 15 Scotts Road, #08-10/11 Thong Teck Building Singapore TEL: cfu@horwathhtl.com Clare Fu is a consultant in Horwath HTL Asia/Pacific with three years of experience in the company. Her areas of specialty in HHTL include market and financial feasibility consultancy for the planning and development of hotels and tourism, along with undertakings for benchmarking financial and productivity performances of hotels in Asia/Pacific.

6 ASIA PACIFIC AUCKLAND, NEW ZEALAND BANGKOK, THAILAND BEIJING, CHINA HONG KONG, SAR JAKARTA, INDONESIA KUALA LUMPUR, MALAYSIA MUMBAI, INDIA SHANGHAI, CHINA SINGAPORE, SINGAPORE SYDNEY, AUSTRALIA TOKYO, JAPAN AFRICA CAPE TOWN, SOUTH AFRICA LATIN AMERICA BUENOS AIRES, ARGENTINA SÃO PAULO, BRAZIL MEXICO CITY, MEXICO DOMINICAN REPUBLIC SANTIAGO, CHILE BOGOTA, COLOMBIA EUROPE AMSTERDAM, NETHERLANDS ANDORRA LA VELLA, ANDORRA BARCELONA, SPAIN BUDAPEST, HUNGARY DUBLIN, IRELAND FRANKFURT, GERMANY ISTANBUL, TURKEY LISBON, PORTUGAL LONDON, UK MADRID, SPAIN MOSCOW, RUSSIA OSLO, NORWAY PARIS, FRANCE ROME, ITALY SALZBURG, AUSTRIA WARSAW, POLAND ZAGREB, CROATIA ZUG, SWITZERLAND NORTH/CENTRAL AMERICA ATLANTA, USA ATLANTA, USA ATLANTA, USA horwathhtl.com DALLAS, USA CHICAGO, USA DENVER, USA LOS ANGELES, USA LAS VEGAS, USA MONTREAL, CANADA MEXICO CITY, MEXICO NEW YORK, USA PHOENIX, USA SAN FRANCISCO, USA DOMINICAN REPUBLIC TORONTO, CANADA