Complete Property Market Updates of Singapore

March 31, 2008

Hotel room rates hit record high for second month

Filed under: General — Propertymarketupdates @ 1:31 am

Average room rate $256, up by 8% from January, driven by boom in visitor arrivals

HOTEL room rates in Singapore have registered an all-time high for the second consecutive month, driven by a record number of visitors.

Average room prices last month shot up to $256 per night, some 8 per cent higher than January’s record of $237, according to figures released by the Singapore Tourism Board (STB) yesterday.

The average price is higher than the latest tally available for Hong Kong, which pegged rates in the territory at $222 in January.

While Singapore is still nowhere near cities like New York, Mumbai and London, industry watchers believe a booming tourism sector could push the average room price above $300 within the year.

‘The psychological barrier now is $300 and I think that will be broken during the Formula One Grand Prix period,’ said Dr Donald Han, managing director of property consultancy Cushman & Wakefield. ‘But that kind of price cannot be sustained in the long term.’

For hoteliers like Crowne Plaza Changi general manager Mark Winterton, the latest spike is ‘fantastic news’.

Last month, 811,000 visitors entered Singapore, a record for February, according to STB statistics. The charge was led by Indonesians (125,000), Chinese (121,000), Australians (52,000), British (51,000) and Malaysians (50,000).

The boom helped room revenues for all of Singapore to reach an estimated $174 million in February, a 43.5 per cent jump from the same month last year.

The rate spurt has not been confined to exclusive hotels such as the Ritz-Carlton Millenia or Fullerton. Even three-star properties like Windsor Hotel in MacPherson Road say they are doing a roaring business.

Boutique hotel Link Hotel in Tiong Bahru has been operating for barely five months and is already more than 80 per cent full on most nights.

Its general manager George Chen said: ‘New hotels generally have problem filling up their rooms. But demand in Singapore is so strong that there is no such issue.’

Although rising room rates are a good thing, Mr Winterton, whose hotel in Changi Airport Terminal 3 opens in May, had a cautionary word about the increases.

‘We must not get too greedy and start pricing ourselves out of the market.’

GOING UP AND UP

‘The psychological barrier now is $300 and I think that will be broken during the Formula One Grand Prix period.’ – DR DONALD HAN, managing director of property consultancy Cushman & Wakefield

Source : Straits Times – 26 Mar 2007

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