Hotel revenues soar as average room rates reach an all-time high during the F1 event.
In September 2023, Singapore’s hotels experienced a remarkable surge in average room rates (ARR), reaching a record S$325.24. This figure surpassed the previous peak of S$292.46 recorded in July, according to the latest data from the Singapore Tourism Board (STB) released on October 30. The ARR reflected a 13.4% increase from August’s S$286.87 and a 14.1% rise year-on-year.
Overall hotel room revenues also hit a new high of S$492.4 million in September, exceeding July’s revenue of S$484 million. This represented an 8.1% increase from August’s S$455.7 million and a substantial 27% increase from the previous year.
Despite a slight decline in the average occupancy rate, which fell to 83.2% from 85.8% in August, the ARR increase propelled the revenue per available room (RevPAR) to a historic high of S$270.60—up 9.9% from the previous month and 14.8% from a year earlier.
Wong Xian Yang, head of research for Singapore and Southeast Asia at Cushman & Wakefield, noted that the exceptional increase in room rates exceeded expectations, especially considering pre-pandemic trends, where monthly growth in September typically ranged from 4% to 5%.
The boost in hotel revenues coincided with the Formula 1 night race, which attracted affluent leisure and business travelers, allowing hotels to command higher prices. All hotel categories recorded increases in ARR, with luxury hotels seeing the largest jump to S$695.12, while upscale, mid-tier, and economy hotels reported increases to S$391.88, S$249.77, and S$162.16, respectively.
Despite the positive figures, tourist arrivals declined for the second consecutive month, totaling 1.13 million in September. Wong expressed concerns that a prolonged high-interest-rate environment could lead to more cost-conscious travel behavior, potentially affecting Singapore’s attractiveness as a high-cost destination.
As of September, room revenue for the year to date reached S$3.62 billion, up 73.8% compared to the same period last year. The ARR for the first nine months of 2023 grew by 20.6% to S$283.61, while RevPAR rose by 35.5% to S$230.11, with an average occupancy rate of 81.1%, up 9% year-on-year.
