Here's the missing link to lower hotel occupancy despite tourist surge

Accommodation receipts sink 6.3%.

With the surging tourist numbers recorded by Singapore's tourism board in the first quarter of the year, higher hotel revenue per available room (RevPAR) is expected. However, this was not the case, as the 13.8% YoY growth in tourist failed to prevent RevPAR sinking 2.3% YoY.

The puzzling disconnect, according to a report by UOB Kay Hian, is brought about by the lower accommodation receipts per tourist, which fell 6.3% YoY to $281.

This is despite a 6.8% YoY increase in accommodation expenditure to $1.16 billion.

The recorded number dropped 20.2% from 2014's peak of $352.

"Likely causes for the weaker spend include the influx of Chinese tourists with tighter purse strings, currency impact and a shorter stay," the report noted.

The report underscored that even with influx of Chinese tourists, Chinese per capita expenditure on hotels went down 5% YoY.

"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," UOB explained.

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