More Chinese tourists won’t save CDL Hospitality Trusts: report

Hotel revenues remain depressed.

Despite the higher number of Chinese Tourists in Singapore, analysts at RHB believe that CDL Hospitality Trusts will continue to have a difficult time boosting its hotel revenues.

“The consensus holds the view that the recovery in the number of Chinese tourists to Singapore could potentially be a catalyst to CDLHT. Though we recognise that there is a surge in the number of arrivals from April-August, we also note that this does not translate into higher revenue for hoteliers such as CDLHT,” said RHB.

For instance, revenue per available room (RevPAR) for hotels in Singapore declined by around 1% to 9.8% in the same period, RHB noted.

“This is evidence to us that the influx of Chinese arrivals does not necessarily equate to a better performance for hoteliers,” the report said.

RHB also flagged CDLHT’s lacklustre Australian and Maldives operations.

“We think that CDLHT’s exposure to Australia and the Maldives is likely to prove to be a disappointing one. The weaker AUD would be a drag to the trust’s overall portfolio. Meanwhile, CDLHT’s Maldives portfolio is likely to face further headwinds as we expect the slowdown in luxury spending by Chinese visitors to persist. The key risk to our forecasts would be a recovery in tourist arrivals and accommodation spending,” said RHB.