Spike in Singapore hotel room rates reflects pent-up demand for affordable travel options

 Tuesday, October 4, 2022 

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The near-decade high in the average room rate for Singapore hotels reflects pent-up demand for travel resulting from the COVID-19 pandemic, but affordable options remain available, industry experts told a news agency.

The Singapore Tourism Board (STB) released data earlier this month showing that the average room rate rose to S$259 in July.

This was the highest since September 2012, when the average room rate was S$261.66, and almost 70 per cent higher compared with a year ago.

Hotels here are getting a “flood of enquiries” from overseas visitors and are seeing a “desperation” for rooms, said tourism consultant Christopher Khoo.

The corporate and MICE (meetings, incentives, conventions and exhibitions) sectors are also helping to drive demand, said another tourism expert, Dr Barkathunnisha Abu Baker.

This is in part due to Singapore’s reputation as a safe destination amid the pandemic, said Dr Barkathunnisha, who is the founder of Elevated Consultancy and Training.

People feel they can trust a country like Singapore and therefore that is driving a lot of demand, she said.

Travel is about consumer confidence, Dr Barkathunnisha added.

When one sees a country back to normal in terms of events, promotional campaigns and new attractions are coming up … it is a signal, there’s a cue that is going out there to say to people that … everything is going all right, it’s good, start travelling to Singapore.

Hotels that CNA contacted all confirmed that demand for rooms has been on the rise.

Pan Pacific Hotels Group said occupancy across its hotels has reached more than 90 per cent, especially during peak holiday periods and long weekends.

Our room rates are determined by dynamic pricing, reflecting the demand for stays and depending on seasonality, such as public holidays and school holidays, said the hotel group.


With Singapore opening up to international travel and receiving higher tourism levels, demand has risen and influenced the pricing.

InterContinental Singapore said bookings have risen recently, leading to higher average daily room rates.

The increase in demand is partly due to the resumption of global events such as the International Luxury Travel Market expo earlier this month and the upcoming F1 race, said the hotel’s general manager Andreas Kraemer.

The Westin Singapore also said it expects demand from business and leisure international travellers to continue over the next few months.

Analysts pointed out that hotels are raising room rates due to higher operational costs too.

Manpower costs due to labour crunch, energy costs, the cost of supplies have all gone up. So it’s inevitable that the hotels have to raise their rates, said Ngee Ann Polytechnic senior lecturer in tourism Michael Chiam.

Based on STB figures, the average occupancy rates for hotels in Singapore stood at 79.15 per cent in the month of July.

While this is the highest since Jan 2020, the highest occupancy rate in the last decade stood at 93.19 per cent in June 2019.

“DEALS TO BE HAD”


Despite the higher room rates, there are still affordable deals and good bargains for staycations for local residents, said Mr Khoo.

For Singaporeans, it makes sense to shop around. There will always be deals to be had.

At least for this year, not everybody will go overseas to travel. Hotels are still working very hard to keep our locals in Singapore for the staycation packages.

So you look around … there are quite a few interesting staycation packages that there have been selling in the market.

For those who really cannot travel overseas for one reason or another, they can still shop around – there are still some hotels with good rates.

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