Hotel room rates climb to record high

SINGAPORE – In a year dogged by weak economic growth, hotel room rates in Singapore climbed to a record high, coming in at an estimated $261 for 2012 as a whole and making the city-state’s average rate among the priciest in the region.

Those who stayed in luxury hotels here, paid an average room rate of $428 last year.

The hospitality industry closed the doors on 2012 – a year where GDP growth came in at 1.3 per cent – with an estimated $2.8 billion in room revenue, up 5.9 per cent from 2011, according to the Ministry of Trade and Industry’s (MTI) 2012 Economic Survey of Singapore.

After slumping to $190 in 2009, the average room rate (ARR) has been growing steadily in recent years, increasing from $218 in 2010 and surpassing pre-crisis levels to hit $247 in 2011.

ARR jumped further to $261 last year and although the average occupancy rate (AOR) was flat, it still registered a respectable 86 per cent.

This puts 2012 revenue per available room (RevPAR) – an indicator of performance – in the region of $226, up from $214 in 2011.

With room rates now hovering at historic levels, it remains to be seen whether tourists will start scaling back their average length of stay, especially given the strong Singapore dollar.

According to a CBRE Hotels report last year, Hong Kong had the highest average daily rate at US$248 (S$307) as at June 2012, followed by Singapore (US$230) and Seoul (US$185).

Preliminary estimates from STB show that occupancies at luxury and upscale hotels rose two percentage points to 82 per cent and one percentage point to 88 per cent respectively in 2012, while ARR for the two categories increased 7.2 per cent to $428 and 7.8 per cent to $301 respectively.

Meanwhile, occupancies for mid-tier and economy hotels were flat at 87 per cent and 85 per cent respectively, with economy hotels posting a flat ARR of $111 while mid-tier hotels saw a 4.7 per cent growth in ARR to $197.

In the fourth quarter of 2012, overall average occupancy softened slightly, dipping one percentage point to a still healthy 86 per cent, offset by a 2.2 per cent rise in ARR to $260.

Hotel room rates climb to record high