Saturday, August 23, 2014

Cheaper hotels in Singapore due to hotel room glut

Singapore hotels are not cheap and are quite expensive in Asian standards. According to a report by, Singapore hotels were most expensive in Asia and were quite expensive compared to the first decade of 2000s. Well that was back in 2012 and thanks to a surge in the number of hotel rooms and reduced demand from China for Singapore holidays (South East Asia holidays specifically) are making Singapore hotel rooms cheaper.

According to Vikram Malhi, managing director of online travel agent Expedia Asia, tour operators are able to get up to 30% discount on hotel stays in Singapore recently. After MH370 tragedy and the political unrest in Thailand, passenger traffic from China to both countries were badly effected. Since Singapore is usually a stop-over for Malaysia tours, Thailand tours or Malaysia/Thailand tours, Singapore saw declining tourist numbers from China. According to the numbers released by Singapore Tourism Board, visitor arrivals in Singapore from China in the first five months of 2014 fell by 27.4 percent year on year.

And the political unrest in Thailand is also taking its toll on global demand for this popular tourist destination. According to, Thailand was ranked the most preferred overseas destination for Indian tourists until this year and was taken over by Dubai after the political unrest.

You can see some clues about the shape of the hotels in Singapore in the numbers announced by Far East Hospitality Trust, a Singapore-focused hotel and serviced residence property trust. "The average occupancy at the hotels under the Far East Hospitality Trust, including Rendezvous Hotel and Village Hotel Albert Court, dropped to 80.1 percent in the quarter ended June 30, compared with 87.7 percent in the same period a year ago. The average daily rate also dipped to 188 Singapore dollars ( 150.4 U.S. dollars) from 191 Singapore dollars (152.8 U.S. dollars) a year ago."

Rendezvous Hotel Singapore
Far East Hospitality Trust also adds two factors to the reason in the declining demand for Singapore hotel rooms : companies are not spending for hotels due to global macro economic uncertainties and the imposition of a new restriction by the Chinese government on shopping tours.

Still, glut does not seem to stop growth in Singapore hotel industry (so can expect more glut?). Singapore's Today Newspaper was not surprisingly drawing a more cheerful picture for the near future as it said the hotel industry in Singapore should continue to enjoy healthy demand despite rising room rates and strong competition, as the Republic’s existing and coming attractions are set to draw more regional tourists.

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