Chart of the Day: Mid-tier hotels to suffer as massive room supply floods the market

Rates and occupancy will drop this year.

Almost 4,000 new hotel rooms are expected to become available in Singapore's already-saturated hospitality market this year. The hefty new room supply will drag average daily rates and hotel occupancy over the next few months, according to a report by DBS.

DBS said that approximately 3,899 hotel rooms will be added this year, equivalent to 6.3% of existing supply. With tourist arrivals expected to remain stuck in the doldrums, DBS estimates that revenue per average room (RevPAR) will drop by 4.4% to $201, while occupancy is forecasted to fall to 83.7%.

The major new supply will be concentrated largely in the CBD area with 816 rooms being added from the following developments: The South Beach, Oasia Downtown Hotel, Premier Inn and Clermont Hotel.

The other major areas of concern would be the Singapore River precinct with the opening of M Social, Intercontinental Singapore Robert Quay (old Gallery Hotel) and The Warehouse Hotel.

Combined with the completion of refurbishment works at Swissotel Merchant Court, a total of 705 rooms will hit the market. Beyond the new supply in the Singapore River area, the rebranding of Riverview Hotel as Four Points by Sheraton should also cause competition in this sub-market to be more keenly felt.

DBS also noted that majority of new supply this year will come from the mid-tier category, with 40% of rooms coming from this segment.
"This should place the greatest pressure on RevPar for the Mid-Tier and Economy sectors as the new hotels seek to build up their initial occupancy and brand awareness,” DBS said.

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