Singapore hoteliers have less to cheer for as Golden Week comes

Chinese visitors’ average stay is further shortened to just 3 days.

Singapore hoteliers’ wide smiles and open arms seemed to be not working their charm for Chinese tourists, as their average length of stay (ALOS) has deteriorated rapidly since its peak of 4.4 days in 2014.

In a UOB Kay Hian report, analyst Derek Chang said ALOS for Chinese tourist has declined 24% to around 3 days, with overall ALOS for all tourists sinking 6.7%.

"This might well be explained by increased Chinese land travel to Singapore from Malaysia, propelling overall Chinese arrival growth," Chang noted.

The report pointed out that the proportion of Chinese land travel to Singapore has risen from a low of 15.7% in 2014 to year-to-date high of 25.2% in 7M16.

More so, majority of Chinese tourists have tighter purse strings. Chinese per capita expenditure on hotels fell 5% YoY to $211 in 1Q16. This is 40% lower compared to the peak of $352 in 2014.

Chang said this could help explain the increased cross-border travels, with nearby Johor Bahru likely appealing to tour groups which have more restricted spending plans.

"Our channel checks suggest these visitors came in tour groups and are usually budget-conscious on accommodation. Singapore hospitality REITs also largely do not cater to such tour groups as they operate in the mid- and upper-tier segments," he said.