The government in Singapore works closely with its hotel industry to create a strategic alignment for the overall sector. By matching the tourism message, government supports, and hotel industry outreach efforts, there is an increased level of competitiveness in this industry compared to others in the country. The pro-business regulatory environment encourages growth as well, providing several employment opportunities that wouldn’t be available otherwise.
The Singapore hotel industry was comprised of 420 members in 2017, an increase of 7 hotels from the year before and 22 more compared to 2015. Over 67,000 rooms are currently available to the industry, which is an increase of 3,200 from the year before. An additional 3,300 rooms in currently in the supply pipeline as new development or redevelopment projects are brought to fruition.
As more visitors come to explore Singapore, additional opportunities away the hotel industry.
Important Singapore Hotel Industry Statistics
#1. In 2017, the Singapore hotel industry offered 21.1 million maximum room nights, averaging about 1.75 million per month. That was an increase of 5.5% over the year before. (Singapore Tourism Board)
#2. Paid lettings in 2017 totaled 17.06 million for the hotel industry, which reflected an increase of 7.6% from the year before. July was the best month for the industry, with 1.53 million paid lettings registered. (Singapore Tourism Board)
#3. The average occupancy rate for the Singapore hotel industry was 84.5% in 2017. With the exception of December (79.4%), every month saw an occupancy rate of 80% or higher. In July, the occupancy rate was 91.5%. (Singapore Tourism Board)
#4. Total room revenues totaled S$3.69 billion for the industry in 2017, which was an increase of 3.9% from the year before. The industry averages about S$300 million in revenues per month. (Singapore Tourism Board)
#5. The standard average room rate (ARR) for the industry was S$215.50 in 2017, which was a decrease of 3.4% from the year before. Available revenues per room were S$182.20, down 1.7% from the year before. (Singapore Tourism Board)
#6. Singapore ranks 37th in the world for the size of its market and total revenues that are earned. User penetration within the segment stood at 22.5% in 2018, with an increase to 25.4% expected by 2022. (Statista)
#7. Tourism numbers for Singapore are expected to reach 18.1 million people, an increase of more than 700,000 people served from the year before. (Singapore Tourism Board)
#8. The hotel industry in Singapore hosts about 40.5% of the overnight stays which are registered in the country. Hostels, small apartments, and similar options, which are recorded in the overall industry revenue statistics, account for the remainder of the industry. (Hotel Management – Questex)
#9. Singapore ranks third in the world for the index of per capita income, which helps to support more than 60 million overnight stays with the hotel industry each year. (Hospitality Net)
#10. 11 of the 18 proposed projects that are in the development or construction phase are anticipated to be in the 5-star sector. Half of the remaining projects are expected to be four-star facilities. (Hospitality Net)
#11. The recently opened Concorde Hotel offers 407 luxury rooms and suites after its refurbishment project. (Hospitality Net)
#12. For the first half of 2017, hotels in Singapore sold 0.6% fewer room nights than they did for the same period in 2016. (Singapore Tourism Board)
#13. The cost advantage of Airbnb in Singapore makes it difficult for the hotel industry to remain price competitive. Apartments listed on the site begin at S$55 per night, whereas hotel prices usually start at S$150 per night. (E27)
#14. In 2017, tourists were spending 28% more in Singapore compared to the same period the year before. Because of a 5% increase in room stock, falling room rates caused the industry to lose more than 5% in total revenues per room. (Straits Times)
#15. Orchard Hotel said it saw an increase of 50% in the number of Chinese travelers staying overnight in their facilities, along with a 30% increase in Indonesian travelers. (Straits Times)
#16. Royal Plaza of Scotts saw occupancy rates rise by 4% over 2016 figures, with 80% of their guests registering as business travelers. (Straits Times)
#17. 60% of the hotel searches that tourists make which involve the Singapore hotel industry involve facilities that are rated either 4 stars or 5 stars. (Straits Times)
#18. More than $355 billion in real property deals were made globally in the past year, with investment groups from the Singapore hotel industry helping to fuel the volume of transactions. (Ernst and Young)
#19. 17.5% of the outbound capital from the global hotel industry originated from Singapore, ranking it third in the world. Only China (27.4%) and Japan (21.6%) invested more capital. The top 5 investors are all in the Asia-Pacific region. (Ernst and Young)
Singapore Hotel Industry Trends and Analysis
Although the Singapore hotel industry seems strong with an initial first glance, the data suggests that there are issues which must be addressed. In August 2012, the industry hit a peak of S$224.85 with their ARR. Since then, owners saw two years of static performance, followed by three years of declines. Revenues are off by more than 11% since the peak rate, even though the number of customers being served has continued to increase.
Partial figures released for 2018 suggest that total room revenues could increase by 8.5% for the year, though the standard ARR may increase just 1.6%.
Over the next 5-year period, the industry hopes to recover more of the revenue share for tourism dollars. With wages rising in China and India, which together account for 36% of inbound markets for the industry, there is a hope that revenue figures will turn around the consecutive years of decline recently experienced. A push for travelers from other regions, including the United Kingdom and the United States, may offer new revenues to consider also.
With the domestic economy expected to grow by more than 3%, which is double the initial forecast, new local opportunities are expected to emerge. The T4 terminal at Changi Airport now has the capacity to handle 16 million passengers per year. It may take a few years to right the ship, but the Singapore hotel industry appears ready to continue pushing forward.