Chart of the Day: This year’s Jan-Feb RevPar the weakest in four years

The mid-tier hotels suffered the most.

Fewer visitor arrivals, particularly from Indonesia, triggered a drop in 2M15 RevPar.

According to a report by DBS, a7% fall in 2M15 RevPAR points to weak 1Q15 results.

On the back of a drop in tourists, industry 2M15 RevPAR was down 7% y-o-y, triggered by falls in both ARR (-5% y-o-y) and occupancy (-150bps).

Unlike prior periods, all subcategories reported declines in RevPAR with the Mid-Tier hotels suffering the most (-10%).

DBS adds that consequently, Singapore-focused hospitality REITs could report soft numbers in the upcoming reporting season. Beyond 1Q15, while we expect an improvement in tourist arrivals as Singapore gears up for its 50th birthday celebrations and hosts the SEA Games in June (we estimate 3% uplift over 2015), the projected 6% increase in new hotel supply will continued to pressurise RevPAR, which we project will decline 5% in 2015.