Why 2014 is predicted to be a good year for Singapore hoteliers

High-end hotels will be outperformers.

According to DBS, given the lower-than-expected supply completions, they believe that 2014 is firming up to be a stronger-than-expected year for most hoteliers. 

To recap, they believe that the upscale and midtier segments will rebound strongly, given expected higher business volumes.

Here's more from DBS:

We expect hoteliers to report better results in 2014, with the upscale/mid-tier hotels delivering the strongest rebound in RevPAR (c.3-4%) after a dreadful 2013, where RevPAR declined by >10% due to weak business travel demand.

Hotel statistics in Jan-Feb’14 even higher than in 2012. This trend seems to be playing out according to our expectations.

Based on latest updates on hotel performance from Jan-Feb’14, average industry RevPAR increased by c.4% y-o-y to S$243/night.

This is supported by high average occupancy levels of c.86%, with Feb’14 turning out even stronger at c.90% due to the Singapore Air Show.

Among the various subsectors, the upscale and luxury hotels did well with a c.4% and c.6% rise in RevPARs respectively.

However, the recovery in average RevPARs for the sector remains flattish/below levels for most hotels when compared to levels achieved back in 2012, with the exception of the luxury sector.

We believe that RevPARs for the upscale/mid-tier segment remain lower due to an expanded supply from recent hotel completions.