Chart of the Day: Singapore visitors hit by lack of hotel supply

Room occupancy remains well in excess of 84% despite the new supply.

This chart from a Colliers International report shows that there is currently a high "frustrated demand" for hotel rooms in Singapore as visitor arrivals outpace room supply.

Data shows that 58% of overnight stays are in hotels, of which 47% of visitors are repeat guests. The main purpose of visit is leisure/VFR (over 57%), with circa 23% here on business/MICE visits. "Considering these statistics, it suggests that Singapore still requires a significant amount of hotel rooms to accommodate its visitors, with growth in visitation being tempered by the low level of room supply especially at the mid-market to lower end," Colliers said.

Colliers noted that this is borne out in hotel performance which indicates that room occupancy remains well in excess of 84% despite the new supply. "In any event, a closer look at the room stock versus demand, suggest that hotels in Singapore are full almost all the time during peak periods, and especially during Monday to Thursday, and Saturday nights. This suggests that there is a high degree of existing frustrated and latent demand, whereby visitors who wish to come to Singapore either cannot find rooms or have to turn to alternative accommodation providers," it added.

In 2011, given that 57% of overnight visitors would stay in a hotel, based on the total number of available rooms at that time would give an implied room occupancy of 121%. "From the hotel statistics provided by STB, which indicates that room occupancies for 2011 was 86%, this suggests only circa 40.5% of those requiring accommodation were able to do so in a hotel," Colliers said.

This is despite the significant increases in room supply in 2015 (over 5,500 rooms), an addition of 2,567 rooms in 2016 and that realised in 2017 (circa 3,400 rooms), Colliers added. "We note that new room supply in Singapore is expected to slow dramatically in 2018 (628 rooms) and 2019 (circa 1,300 rooms), which will allow the recently added rooms to be absorbed into the market," it said.