3 reasons why Singapore hotels made a disappointing start to 2013

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YoY comparison was “distorted”.

According to DBS, they believe the operational weakness seen in the first two months of 2013 was due to, firstly, the longer break owing to the festive Chinese Lunar New Year (CNY) being in Feb13 ( vs Jan12 ) which resulted in corporate travellers delaying their business trips till after the festive period.

Here are the rest of the reasons according to DBS:

Secondly, a strong start in 2012 “distorting” the y-o-y performance due to a strong line-up of conferences and events, especially the Singapore Airshow , held in Feb12, helped to boost accommodation demand a year back.

Last is the strong S$. travellers have remained more conscious on their choices of hotels and have been “trading down” to cheaper accommodation choices.

In an attempt to remove the effects of the seasonal impact due to the festive period, we compare the performance of the first two months of 2011 (note that CNY was also in Feb) and noted that the hotel sector’s performance remained stronger with most sub-sectors seeing higher RevPARs to the tune of 0-12%.

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A rosy 2012 for Singapore hotels but slower growth momentum ahead

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Luxury hotels worst-hit this 1Q13Hotel Fort Canning partners with GFC in tree planting campaignFearless forecast: Singapore tourism growth to be halved in next 10 yearsSingapore hotels’ average occupancy rate dipped to just 85%

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Tags: hotel sector, operational weakness, revPAR