Tourists near the Marina Bay Sands hotel in Singapore. Agence France-Presse
Hotel occupancy rates of Singapore have climbed to their highest in over a decade as travellers and business events switched from Hong Kong, where pro-democracy protests have slammed tourist numbers and wider business sentiment.
Data released by Singapore’s tourism board showed average occupancy rates in the city-state’s hotels hit 93.8% in July, the highest in records going back to 2005, and up from 92.5% a year ago.
The data also showed the highest revenue per room in almost four years, a trend analysts and hoteliers said was helped by conferences switching from rival business hub Hong Kong as protests that started in mid-June turned increasingly violent.
“Singapore may benefit twice as much from the Hong Kong fallout as both these destinations share similar traits,” said Derek Tan, an analyst at Singapore’s biggest bank DBS, citing businesses switching conference venues from Hong Kong.
The Global Wellness Summit, a gathering of around 600 health and beauty industry delegates scheduled for mid-October recently said it was moving to Singapore from Hong Kong. The event’s spokeswoman said this was “to ensure travel is as seamless as possible.”
Marcus Hanna, general manager of Singapore hotels, Fairmont Singapore and Swissotel The Stamford, said he had a 60-strong business group last month switch from Hong Kong for a five-night stay.
Hanna said his hotels, which offer conference and meeting facilities, have received a number of inquiries from companies looking to move events out of Hong Kong amid the unrest.
Jefferies analyst Krishna Guha said events in Hong Kong would have been a factor in lifting Singapore’s hospitality sector. Revenue per available room, a key performance metric for the hotel industry, rose to S$203.7 in July, its highest since October 2015, and from S$200.2 in July 2018.
He said the unrest would have weighed on tourists’ summer travel plans, while other factors included tightening hotel supply in Singapore during its peak season for North Asian visitors and a weaker Singapore dollar.
In Hong Kong, the city’s airport has suffered repeated disruptions due to demonstrations and hotel operators have reported lower occupancy rates and booking cancellations. Many countries such as Singapore have advised their citizens to defer non-essential travel to the former British colony.
“The outlook remains bleak for September and the rest of the year for destination Hong Kong,” said Alicia Seah of travel agency Dynasty Travel, adding that inquiries and bookings have come to a “standstill” since last month’s airport shutdown.
“There are now spillover effects with both leisure and business travellers opting to travel to Singapore instead of Hong Kong.”
Meanwhile, Singapore slashed annual growth forecast on rising recession fears
Singapore slashed its full-year economic growth forecast as global conditions were seen worsening and data confirmed the slowest growth rate in a decade amid mounting fears of recession in the city-state.
The government cut its forecast range for gross domestic product (GDP) in Singapore - often seen as a bellwether for global growth because international trade dwarfs its domestic economy - to zero to 1% from its previous 1.5%-2.5% projection.
Singapore’s downgrade adds to concerns globally about the effect of increasing protectionism on exports and production. The deterioration in the global outlook has pushed central banks to cut interest rates and consider unconventional stimulus to shield their economies.
“GDP growth in many of Singapore’s key final demand markets in the second half of 2019 is expected to slow from, or remain similar to, that recorded in the first half,” the trade ministry said in a statement on Tuesday. The ministry flagged a host of growing economic risks including Hong Kong’s political situation, the Japan-Korea trade dispute, the Sino-US tariff war, slowing growth in China and Brexit. Final second quarter GDP data showed a 3.3% on-quarter contraction on a seasonally-adjusted annualised basis. That was slightly smaller than the 3.4% decline seen in the government’s advance estimate but deeper than a 2.9% fall predicted in a Reuters poll and a sharp contrast to the robust 3.8% first quarter expansion, which was driven by brisk construction activity.
The data also confirmed annual GDP expanded 0.1% in April-June from a year earlier, its slowest rate in a decade, and lower than poll expectations of 0.2% and the first quarter’s 1.1%.
A central bank official said after the data that it was not considering an off-cycle policy meeting. The next of its scheduled semi-annual meetings is in October, when it is widely expected to ease policy.