In discussions with Singapore Hotel Association this week about 2024 view of hotel performance with STR CoStar Group data, a few highlights.

DEMAND:
Seasonality has returned to historic nuances; means we are entering a soft Q2 before a stronger Jul-Nov. 2024 still releasing new rooms with potential slight pressure on occupancy growth. March is traditionally a shoulder month, with medium Occupancy & ADR levels compared to rest of year.

However, preliminary daily data for March showing occupancy levels only 3% behind 2019 levels. Into Q2, future weekends holding up better than Weekdays, when comparing to same time last year.

PRICING POWER:
Since ADR levels in March held up and had slight growth over February, it increased difference to historic rate levels even further. Higher rates created in Q1 2024 comes off Lunar New Year and major concerts.

On average, Marina Bay, Orchard, River Valley and Regional areas had a 30% uplift in ADR, when comparing average/standard levels during quarter with peak Swift concert dates. Sentosa only submarket that was ‘events-rate-agnostic’, as in no real ADR uplift during either event, only minor Occupancy uplift but remained otherwise neutral to events.

Rate levels heavily segmented across submarkets, with Marina Bay these days not only far outpacing Orchard, but also stronger than Sentosa.

PROFITABILITY:
2024 showing continued strong growth in GOPPAR as revenues climb, but high operating cost means tighter GOP margins and smaller growth in that area.

SG FORECAST:
Recently revised down slightly, mainly in demand during Q2, now just over 4% growth in Occupancy and 2.5% ADR for full year 2024 over 2023, even if Q2 calendar for events could potentially help push demand in softer weeks

Even with interest rates curbed and inflationary pressure easing, concerns for Singapore include a forecasted drop in average household personal disposable income and lower consumer spending, but as is more domestic impact, question is if will be seen for retail and F&B as inbound tourism continues to increase and pad domestic climate.

Jesper Palmqvist is the Senior Director - Asia Pacific for STR

www.str.com