Asia’s largest trade shows won’t save Singapore’s struggling hoteliers in 2016

Room revenues will continue to drop.

The return of two large biennial events might not translate to higher revenues for Singapore’s glut-stricken hoteliers, according to a report by OCBC.

The Singapore Airshow and Food and Hotel Asia, the region’s largest trade shows for their respective sectors, are scheduled in Singapore in 2016. The shows, which are expected to draw tens of thousands of visitors into Singapore, are unlikely to boost hotel revenues due to the impending room supply surge in the same year.

“Looking ahead, the ‘even’ calendar years tend to be stronger for the hospitality sector, due to biennial events such as the Singapore Airshow and Food and Hotel Asia. This provides optimism for 2016, but one major risk would be the large inventory coming into the market. Approximately 3.9k new rooms are expected to be added next year, an increase of 6.3% from 2015. Hence, we believe hotel RevPARs may still decline 0% to -5% in 2016,” said OCBC.

In September, overall hotel revenues dropped 5.8% as hotel operators sought to offer more competitive rates in order to gain market share or at least keep their occupancy stable.