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YEAR IN REVIEW
(9)
International Visitor Arrivals Statistics – STB.
(10) STB.
(11) Japan National Tourism Organization.
(12) Australia Department of Industry, Innovation and Science, "Resources and Energy Quarterly December 2016".
(13) Statistics New Zealand, “International Visitor Arrivals to New Zealand”.
HOTELS PERFORMANCE FOR FY 2016
Singapore
Total international visitor arrivals to Singapore grew 7.7% yoy to 16.4 million for 2016, largely underpinned by growth in
Singapore’s top two source markets – China and Indonesia. Total visitor days on the other hand, only grew 2.2% yoy as
the average length of stay declined from 3.6 days to 3.4 days
(9)
.
The city experienced a slowdown in corporate travel amidst the global economic slowdown. The absence of events
during the year such as the SEA games and SG50 celebrations as well as the Zika-related travel advisory issued against
Singapore in September 2016, also affected the performance of the Singapore Hotels. Additionally, the refurbishment
works at Grand Copthorne Waterfront Hotel and M Hotel during the year also affected the performance of these hotels.
The new supply of about 2,900 rooms
(10)
gave rise to competitive pricing strategies in the market, posing downward
pressure on room rates. Through active management of business mix, the Group’s hotels were able to retain a healthy
occupancy level of 85.4% through the replacement of reduced corporate business with lower rated leisure business.
Consequently, average RevPAR for the Singapore Hotels decreased by 8.6% yoy to S$160 for FY 2016.
CDLHT’s Singapore Hotels Performance
FY 2016
FY 2015
Variance
Average Occupancy Rate
85.4%
87.7%
-2.3pp
Average Daily Rate
S$187
S$199
-6.0%
RevPAR
S$160
S$175
-8.6%
Overseas
For Japan, international visitor arrivals recorded robust growth, with a yoy increase of 21.8% to a record 24.0 million for
2016
(11)
. Consequently, the Japan Hotels posted a positive performance but faced rate pressure partly from currency
headwinds during the year and rising competition from new hotel room supply. Collective RevPAR for the Japan Hotels
grew marginally by 0.6% for FY 2016 and NPI contribution increased 3.5% yoy to S$5.4 million.
Over in Maldives, the hospitality market remained challenging in the face of the slowdown in Chinese luxury travel and
the continued strength of the US dollar (which room rates are priced in), which resulted in significant downward price
adjustment in some of the major source countries as a compensating effect. The situation was further compounded by
new supply in 2016 which intensified rate competition. Accordingly, the Maldives Resorts posted a yoy RevPAR decline of
25.1% and total contribution from the two resorts decreased 17.1% yoy to S$11.3 million in FY 2016.
CDLHT’s Australia Hotels in Brisbane and Perth experienced softer performance in the year due to continued weakness
in the natural resources sector where the value of committed resources and energy projects has fallen by 12.0% over 12
months to October 2016
(12)
. However, this effect was mitigated by the defensive lease structure which provides CDLHT
with a high proportion of fixed rent. Contribution from the Australia Hotels decreased by 5.0% yoy to S$14.4 million,
attributable to the weakening of the Australian dollar against the Singapore dollar and the recognition of a smaller
variable income of S$0.4 million for FY 2016, compared to S$1.1 million recognised in FY 2015.
Hilton Cambridge City Centre, which was acquired in 2015, contributed a full year NPI of S$8.5 million for FY 2016.
The positive influence of the rebranding exercise in 2016 coupled with the product uplift after its refurbishment supported
a yoy RevPAR growth of 11.9%.
In New Zealand, the tourism sector enjoyed strong growth in 2016 with a record number of international visitor arrivals.
Total visitor arrivals in 2016 surged 11.8% yoy to 3.5 million
(13)
, facilitated by additional commercial flight capacity serving
Auckland with new international airlines being launched and new routes being established during the year. Against this
backdrop, the NZ Hotel posted a robust yoy RevPAR growth of 10.8%.
On 7 September 2016, CDLHT commenced a new lease and the NZ Hotel was re-branded as Grand Millennium Auckland.
CDLHT benefitted from the buoyant Auckland hospitality market under the new lease structure which provided for more
variable income as compared to the largely fixed rent received under the previous lease. As a result, Grand Millennium
Auckland traded strongly with an NPI contribution of S$13.3 million, representing a yoy increase of 37.2%.
OVERVIEW AND FINANCIAL REVIEW
22