Welcome to Singapore: STB targets splurging tourists

High-end Singapore hotels showed RevPAR growth of 14.5% in 1Q12, outperforming budget hotels.

OCBC is seeing favorable supply dynamics for high-end hotels, forecasting that overall hotel room supply will increase by 3.7% p.a. for 2012-2015, outstripped by hotel room demand growth of 6.4% p.a.

CDL Hospitality Trust stand to benefit, especially with the temporary closing of Pan Pacific Singapore from Apr to Aug.

Here's more from OCBC Investment Reseach:

Growing influence of hospitality
It is notable that the Singapore Tourism Board is targeting a possible doubling of tourism’s GDP contribution to 8%. In 2011, tourism accounted for 4.1% of GDP, substantially higher than the 3.6% in 2010 and 2.4% in 2009. In 1Q12, real GDP grew 1.6% YoY while the Accommodation & Food Services sector grew faster at 4% YoY. For 2012, STB is aiming for S$23-24b in tourism receipts, implying a 3.6-8.1% YoY increase. The target growth rate, which STB has indicated could be revised upwards, is significantly higher than the official 2012 GDP growth forecast of 1-3% and highlights the increasing importance of tourism.

Stronger performance for high-end hotels
The STB has recently highlighted that it wants to focus on attracting quality tourists who spend more, as opposed to simply trying to grow the absolute number of tourists. This emphasis will probably continue to benefit high-end hotel players like CDLHT. For 1Q12, tourist arrivals jumped 14.6% YoY to 3.5m. Based on preliminary figures, high-end Singapore hotels showed RevPAR growth of 14.5% in 1Q12, outperforming budget hotels. The robust RevPAR growth for high-end hotels was supported by larger increases in rental rates. The 7.5% RevPAR growth rate assumption for CDLHT’s Singapore hotels in 2012 is not aggressive.

Favorable supply dynamics for high-end hotels
Updating the in-house hotel database, the forecast is that that overall hotel room supply will increase by 3.7% p.a. for 2012-2015, comfortably outstripped by hotel room demand growth of 6.4% p.a. High-end hotel room supply will grow by 3% p.a., slower than the 5.3% p.a. for budget hotels. The temporary closing of Pan Pacific Singapore for renovations from Apr to Aug has also taken 778 high-end rooms off the market.

Reaching the people who run Asia's businesses is harder than it used to be.

Inboxes are crowded. Attention is short. The executives you most want to reach — the founders, CFOs, and operators who actually move budgets — are the hardest to find through the usual channels. If you're building a company, a category, or a reputation, you already know this.

We've spent twenty years building the room they read. Singapore Business Review is where senior decision makers in Singapore and across Southeast Asia come for business coverage they can't get elsewhere — in print, online, and in person at the summits and roundtables we host across seven markets.

If you have something these readers should know about — a point of view worth publishing, a product worth their attention, an event worth their time — we'd like to hear what you're trying to do.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia