Singapore’s average hotel rate declined sharply in February 2017, as a wave of more affordable rooms entered the market.
According to the latest preliminary monthly data from STR, the city’s average daily rate (ADR) fell 8.1% last month, although it remained high, at SG$274.32 (approx. US$193).
The analysts at STR noted that more than 2,000 new hotel rooms have entered the market since the beginning of 2016, putting pressure on hoteliers’ pricing power. And with many of these rooms coming into the midscale or upper-midscale sector, more rooms are now available at lower prices.
A lack of events in Singapore also impacted the market, giving hoteliers less opportunity to hike rates.
The decline in rates coincided with a slight increase in occupancy (-0.9% to 85.7%), but the city’s revenue per available room (revPAR) still declined 7.2% to SG$235.07.
Demand for hotel rooms in Singapore continued to rise in February, up almost 5% year-on-year.
