t's a muted year for tourism.
OCBC notes that after an outstanding 1Q12, with
RevPAR and visitor arrivals growing YoY by 14% and 14.7%,
respectively, growth in RevPAR and visitor arrivals decelerated
through 2Q12 and 3Q12. OCBC's channel checks indicate that hotel
bookings up to Chinese New Year in 2013 are still weak, with
limited visibility beyond that.
Here's more from OCBC:
We note that 2013, an
odd-numbered year, will likely see fewer MICE events, as biennial
events are generally held in even-numbered years. Hoteliers have
also expressed concern over the upcoming competition that will
result from the growth in hotel room supply; new hotels typically
provide substantial room rate discounts in the first few months of
operation. With no immediate catalysts in sight, and an uncertain
global economic environment, we see a muted outlook for tourism in
1H13.
Supply
situation is manageable, and better for high-end
hotels
Breaking down the
projected growth in hotel room supply for 2012-2014, we note that
the lower the tier, the higher the expected supply growth: Luxury
(+1.6% p.a.), Upscale (+3.4% p.a.), Mid-tier (+7.0% p.a.) and
Economy (+7.2% p.a.).
For the first 10 months
of 2012, higher hotel tiers showed stronger YoY growth in Average
Room Rate (ARR) and RevPAR than lower tiers. We think that this is
attributable to the more favourable supply and demand dynamics for
the Luxury and Upscale tiers.
The number of affluent
visitors to Singapore is increasing with the general growth in
arrivals, and supply is more stable for the higher-end hotel tiers.
