Rather than a real reverse in fortune, Singaporean hotels enjoyed an increase in activity from a very low level in the last ten days. The secret behind this upward trend: the lockdown of Malaysia.
Reflecting the effects of the COVID-19 pandemic, hotels in the Asia Pacific region reported a significant decline in occupancy but fairly steady room rates during February 2020, according to data from STR. The Asia Pacific region was the first to show a significant COVID-19 hotel performance impact. Singapore was not spared with a registered decline of 46.9% in occupancy. Singaporean hotels reached a low of 46.4% according to STR. It was still far better than China’s occupancy, down by 75.9 points to just 14% and South Korea, down 30 points to 42.7% occupancy.
US Dollar constant currency, February 2020 vs. February 2019
- Occupancy: -37.7% to 41.2%
- Average daily rate (ADR): +1.9% to US$107.35
- Revenue per available room (RevPAR): -36.5% to US$44.27
To keep a certain level of activity, some hotels have turned to the government to welcome quarantined people, offering very cheap packages. This could turn into an opportunity to maintain a minimum level of activities for properties which are often fully equipped to take care of guests. A few chains in Singapore followed suit after the government announces the mandatory 14-day self-quarantine for anyone entering the country.
Talking to the website Skift, Park Hotel Group Executive Director Shin Hui Tan has already seen enquiries from returning residents wanting to check themselves into hotels during the two-week period.
Anticipating more guests to check into its hotels for self-quarantine, the hotel group has in-between launched a stay package inclusive of three daily meals priced at very special rates which help the hotel to cover some of their operating costs.
Budget hotel startup RedDoorz is also providing a number of rooms as alternate lodging for foreign workers as they also have to follow the 14-day stay-home-notice implemented by Singapore Ministry of Manpower, a country that is heavily reliant on foreign manpower. This offer is particularly adapted to Malaysian commuters as many of them are not able to go back to their own country following the lockdown by Malaysia’s government.
Malaysia’s decision to completely close down the country has then a beneficial aspect for Singapore hotels as many are now promoting themselves as temporary Singapore homes. As an example, Skift points to HotelPlanner that received a 40 per cent spike in bookings for Singapore hotels since Malaysia’s lockdown.
Consulting company STR continues to monitor the situation and issue preliminary data releases and provides more information, including recent Asia Pacific webinars and analyses to help track the evolution of the hotel industry.