Hoteliers heartbroken over underwhelming SEA Games demand

Occupancy remained soft in June.

Local hoteliers had previously hoped that the 2015 SEA Games will remedy Singapore’s flagging occupancy rates, but it seems that their fervent wishes have come to naught.

According to a report by DBS, June remained a weak month despite the SEA Games as higher demand was tempered by a decline in corporate visitors.

“Contrary to our earlier expectations, we understand from our industry contacts that June was also a weak month. We had earlier expected the SEA Games to boost demand. However, corporate demand was soft with some travellers also postponing their travel to Singapore due to the SEA Games,” DBS said.

“Given weak RevPAR performance in April (-8.7%), May and now June, we expect the Singapore-focused REITs such as CDREIT and FEHT to report weak 2Q15 results. To account for weaker than expected Singapore market and latest equity raisings, we have also trimmed our FY15-16F DPU for the various REITs by 1-4%,” the report added.