Can OUEHT weather the headwinds in Singapore’s turbulent hospitality market?

It’s banking on a rise in tourist arrivals.

The city-state’s hospitality sector is in a ditch due to the softening tourist market and economic uncertainty, but analysts say OUE Hospitality Trust can certainly weather the storm.

According to a report by DBS, the 1% increase in RevPAR of the hospitality firm demonstrates that it is well-positioned to ride out the near term headwinds in the market.

DBS added that this is due to the superior location of its properties.

“Mandarin Orchard is located in the heart of Orchard Road, which will not see any major new hotel supply in 2016. Meanwhile, Crown Plaza Changi Airport (CPCA) and its upcoming extension (CPEX) is the only hotel within the Changi Airport submarket and well placed to take advantage of the c.72% expansion of Changi Airport’s passenger capacity,” DBS said.

Meanwhile, the competitive landscape remains the concern of analysts due to the weaker-than-expected outlook for the Singapore hospitality market, especially in the event that the recovery in tourist arrivals does not materialise.

“In addition, rents at Mandarin Gallery may fall below expectations should we see a significant deterioration in the Singapore retail scene,” DBS said.