Tourist glut: CDLHT’s revenue per room down 6.3% YoY in January

Given the absence of the Singapore Airshow and Food and Hotel Asia.

CDL Hospitality Trusts may have boosted net property income with its Maldives resort acquisitions, but it is in for a wild ride at home.

According to a report by OSK-DMG, RevPAR for Singapore hotels decreased by 6.3% compared to the same period last year, given the absence of biennial Singapore Airshow in February and Food and Hotel Asia in April.

Analysts remain wary of near-term tourism prospects, given that the SEA Games is starting only in June. On the supply front, hotel room inventory will continue to grow by an estimated 3,258 rooms in 2015 (2014: 1,789), increasing room stock by 5.7%. As such, room rates are likely to remain competitive, with hoteliers likely to lower room rates to maintain occupancy, as we witnessed last year.

Here’s more from OSK-DMG:

We expect the two new Japan hotels and Maldives assets to contribute ~2% and 10% respectively to FY15 NPI, which should help to buffer against the languish Singapore landscape. With unabated headwinds facing both the demand and supply side of the tourism industry, we see limited growth prospects in Singapore over the next two years, which highlights the urgency to diversify regionally.