Boom Time For Hotels

Source: TODAY,Wednesday,July 25,2007

All time high $210 average room rate as visitor arrivals soar

SINGAPORE hotels crossed a historic threshold last month, chalking an all-time high average room rate of $210 a night.

Not only was this the first time the $200 mark has been breached — thanks in part to the Great Singapore Sale and conferences hosted here — it also represents a 22.6 per cent jump in average room rates over the same month last year.

According to Singapore Tourism Board (STB) data, gazetted hotels generated $164.3 million in room revenues, a 26 per cent growth over June 2006 figures. Average occupancy hovered around the 86 per cent mark for the third straight month.

And some hoteliers are expecting more good tidings ahead, with the peak tourist months in the latter part of the year still to come.

“The main reason for the rise in rates is incremental demand. The primary contribution to the boost in demand is the increase in the number of corporate travellers attending meetings, conferences and exhibitions,” said Mr Mohamed Yusof, the director of yield management and business development at the Royal Plaza on Scotts.

Speaking to TODAY before the STB’s latest performance report was released, he predicted that room rates would continue their climb.

Even the smaller industry players are optimistic.

“The outlook for world travel is positive, with more budget airlines and growing third world economies enabling more people to travel,” said Mr David Wee, general manager and executive director of the New 7th Storey Hotel.

Rising room rates are a barometer for the tourism industry, which hit record highs for the first half of this year. The STB estimates the country received $6.4 billion in receipts from 4.9 million visitor arrivals.

Compared to the same period in 2006, this is a 9 per cent growth in tourism receipts and a 5.2 per cent increase in visitor arrivals. “We have also seen record high visitor arrivals for each month this year compared to the same month in previous years,” said Mr Lim Neo Chian, STB chief executive and deputy chairman.

June alone saw 848,000 visitors, a growth of 7.5 per cent over June 2006; with visitors from Indonesia (180,000), India (81,000) and China (77,000) comprising the top three markets. The markets of Vietnam, the Philippines and India registered the highest growths.

With STB targeting 10.2 million visitor arrivals and $13.6 billion in receipts by the year’s end, first-half figures give STB reason to smile.

“If the industry continues to sustain the growth momentum, STB is confident 2007 targets will be met. Historically, higher visitor arrivals are posted in the second half of the year during the peak travel months of July, August, and December,” said Mr Lim.