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SINGAPORE
HOTEL PROPERTY SECTOR
MARKET REVIEW
As of 1 March 2017
SINGAPORE TOURISM MARKET
Based on statistics from the STB released on 14 February
2017, Singapore welcomed 16.4 million visitors for the full
year 2016. This represents a 7.7% yoy increase, fuelled by a
surge in visitors from Singapore’s top source markets such
as China, Indonesia, Thailand and India.
Similar to previous years’ trends, Singapore’s top five
source markets are Indonesia (2.89 million, 17.6%), China
(2.86 million, 17.5%), Malaysia (1.15 million, 7.0%), India
(1.10 million, 6.7%) and Australia (1.03 million, 6.3%).
These five market segments constituted 55.1% of the total
visitor arrivals in 2016.
Chinese visitors in particular, showed good growth rates
during 2016, recording a 36.0% increase from the previous
year to 2.86 million, retaining its position as Singapore’s
second largest source market. The surge in Chinese
travellers was largely due to the numerous strategic
partnership deals that STB concluded with Chinese online
travel services, e.g. Alitrip, to increase its presence in the
Chinese market with the aim of increasing the number of
independent Chinese visitors to Singapore. In addition, STB
has been expanding their visitor markets by aggressively
targeting secondary Chinese cities, such as Chengdu,
Xiamen and Chongqing. These strategies have proved to
be successful thus far.
Indonesia continues to be Singapore’s top source market
with 2.89 million visitors for the same period, representing
a yoy increase of 5.9%. Markets like India and Thailand also
showed a 8.2% and 5.8% growth over the corresponding
period last year. India is currently the fourth top source
market, replacing Australia. On the other hand, visitors
from Hong Kong showed a decline of 11.8% to 0.5 million
due to its weaker economic performance.
However, we note that the growth in visitor arrivals
slowed down in the second half of 2016 as compared
to the first half. The strong Singapore dollar vis-a-vis her
regional countries has made consumption relatively more
expensive and less attractive. In addition, the competition
for tourism dollar has intensified in recent years in Asia.
Moving forward, STB needs to ensure the sustainability of
visitor arrivals by tapping on different source markets and
visitor profiles.
The Singapore tourism market experiences certain
seasonality trends which can be observed from the
monthly visitor arrivals. In general, the peak period for the
tourism sector falls between June to August, where the
surge in tourist arrivals during this period can be attributed
to reasons such as The Great Singapore Sale; Australian
travellers escaping winter season and; summer holidays in
Europe and the United States. The Formula 1 night race,
which typically takes place during the third quarter of the
year, also helps to boost visitor arrivals. Another peak
season is from late November to December where many
tourists spend their Christmas holidays in Singapore.
In contrast, periods from January to February, April to
May and September to mid-November are relatively quiet
for the tourism sector, although it is still well supported
by the Meetings, Incentive Travel, Conventions and
Exhibitions (MICE) industry for business guests all year
round. Suntec Convention Centre and Sands Expo and
Convention Centre are two world-class destinations that
are able to accommodate new and returning events
across various sectors. In 2016, events held in Singapore
included International Dental Exhibition & Meeting
(IDEM), Singapore Contemporary Art Show and Future
Travel Experience (FTE) Asia Expo. Upcoming events in
2017 include Interpol World 2017, 5th Annual Worldwide
Nursing Conference (WNC 2017) and Asia Health 2017.
On the aviation front, Singapore offers 7,000 weekly
scheduled flights as of December 2016 and is connected to
380 cities worldwide. According to Changi Airport Group
(CAG), passenger movements totalled a record 58.7 million
for the full year 2016, an increase of 5.9% over the previous
year. South East Asia, North East Asia and Oceania routes
contributed 90% of the growth in passenger traffic in 2016.
Jakarta continues to serve as Changi Airport’s busiest route,
followed by Kuala Lumpur and Bangkok. In 2016, CAG
expanded their operations and welcomed two passenger
airlines (West Air and Fiji Airways) whilst existing airlines
United Airlines and Singapore Airlines introduced non-stop
flights to San Francisco. Changi Airport also clinched 26
Best Airport awards in 2016, including Skytrax’s World’s
Best Airport Award 2016 for the fourth consecutive year.
Moving forward, the aviation industry is expected to
thrive in light of recovering travel demand from regional
markets like Thailand, Vietnam and China. Likewise, the
growing affluence from emerging countries will help fuel
the aggressive expansion of low cost budget carriers and
this will further improve traffic growth in Changi Airport.
With growing trends of airline self-transfer and the cruise
industry, CAG will work together with various agencies to
better tap on these segments.
Lastly, with Terminal 4 (opening in second half 2017),
Terminal 5 (opening late 2020s) and an iconic lifestyle
project Jewel Changi Airport currently in development
(targeted to open in 2019), this will help strengthen Changi
Airport’s position as a world class airport and destination
for all passengers and capture growth opportunities in the
aviation industry.
HOTEL MARKET PERFORMANCE
For the full year 2016, hotel performance dipped as ADR
decreased 3.6% yoy to $237 and market wide occupancy
dipped 0.9 percentage points to 84.2%. While RevPAR
decreased 4.6% to $199, the decline in occupancy levels
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