Dismal earnings await hospitality REITs as supply headwinds mount

Even higher tourist arrivals won't help.

If the Singapore Tourism Board's lacklustre November hospitality statistics is anything to go by, then listed hotel owners will likely report soft results for the last quarter of the year.

Although tourist arrivals jumped 4.3% year-on-year to 1.2 million people, hotel rates still declined on back of a 6-7% increase in new room supply.

According to DBS, the average daily rate (ADR) for local hotels dropped 4% year-on-year to $243, while revenue per average room (RevPAR) declined to $210.

"The weakness in RevPAR and recovery in tourist arrivals was in line with our expectations, and the Singapore hospitality market is on track to hit our estimate of a 5%
fall in RevPAR and total visitor arrivals of c.15m in 2015," DBS said.

"Against this backdrop, we expect hotels under various SREITs to remain under pressure with the hospitality REITS delivering weak 4Q15 results," the report noted.

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