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SINGAPORE – Average hotel room rates hit a 14-year high in September this year, off the back of the return of the likes of the Formula One race and a slew of major Mice (meetings, incentives, conventions and exhibitions) events.
According to data from the Singapore Tourism Analytics Network (Stan), room rates hit $283.47 per night in September 2022, and remained in the $280 range in October. Figures for November are not yet available.
The previous highest average room rate was in September 2008 – the year of the first Singapore F1 night race – when prices hit $298.65.
Average room rates are a function of demand and supply, as well as the hotels having to balance operating costs, said Mr Benjamin Cassim, a senior lecturer for the diploma in hospitality and tourism management at Temasek Polytechnic.
Other experts, like Mr Paul Kent, partner for advisory at KPMG in Singapore, said the high average hotel room rates in September and October were likely due to the F1 race and the influx of more affluent and luxury profile travellers visiting the country.
While room rates peaked, hotel occupancy rates also rose, climbing from 78 per cent in the first quarter of 2022 to 84 per cent in the third quarter of 2022.
“There should not be a concern in tourism recovery (despite the high average room rate) since Singapore is among the top performing countries on a revenue per available room (RevPAR) basis,” said Mr Kent.
“Hence, we see tourism recovery as likely to remain sustainable and gradually progress over the next few years, since Singapore has plans to draw both business and leisure travellers.”
With 5.37 million visitor arrivals as at the end of November, Singapore is already within the Singapore Tourism Board’s (STB) projection of four to six million visitor arrivals by the year end. However, this figure is still a fraction of the pre-pandemic high of 19.1 million arrivals in 2019.
While Covid-19 played a major role in the steep drop in Singapore’s tourism visitor arrivals this year, Mr Cassim said that factors such as Russia’s ongoing war with Ukraine, steep decreases in airline capacities and a preference for shorter-haul travel within Europe and the United States have also contributed to the decline.
However, he noted that the pandemic has provided Singapore with an opportunity to rethink the type of international visitors the Republic should be attracting, and align visitor experiences with more discerning visitor market segments who are prepared to pay to visit the Republic.
“It’s not really about hitting the over 20 million visitor arrivals again, but rather drawing in the relevant visitors into Singapore who will ultimately find value in the experiences they enjoy while here,” he said.
“This could well mean having optimal visitor arrivals at a number below the 20 million mark, and yet seeing much higher tourism receipts.”
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