F1 weekend brought brisk business to some hotels

Source : Business Times - 2 Feb 2009

Average room rate peaked at US$701, occupancy hit a high of 87.9%: survey

THE official numbers may not be out yet, but some local hotels apparently did enjoy brisk business during the Formula One weekend last September.

According to a review of hotel performance by business advisory firm Deloitte, the first night of the three- day race weekend, September 26, scored the highest average room rate (ARR) of US$701 (S$997). Occupancy averaged 80.3 per cent while revenue per available room (revPAR) registered US$563 (S$801).

The survey covered 11 hotels from the 3-5 star category.

ARR slid to US$682 (S$973) on September 27, while occupancy and revPAR came in at 85.3 per cent and US$581 (S$823) respectively. However, it was race day itself (September 2 that saw the highest occupancy of 87.9 per cent, although both ARR and revPAR were lower than the previous day, at US$648 (S$926) and US$570 (S$815) respectively.

Numbers started to plummet after the race weekend, with occupancies, room rates and revPAR falling sharply, suggesting that most tourists who were in town for the race did not stick around.

By September 30, average room rates for the day were down to US$223 (S$319) and revPAR dropped to US$136 (S$195) on the back of a 61 per cent occupancy.

Data on the tourism receipts generated from the 2008 race have yet to be released by the Singapore Tourism Board (STB) as the numbers are still being analysed.

However, for the entire month of September 2008, local gazetted hotels generated S$186 million in room revenue - a 26.3 per cent year-on-year jump, thanks no doubt to the F1 race.

ARR for the month of September 2008 was 49.5 per cent higher at a record S$306 while RevPAR also hit a record of S$224. However, average occupancy rate fell 11.6 percentage points to 73 per cent.

From September 25 to 27, the growth in visitor arrivals peaked at 30.3 per cent, and continued its positive trend with an 11.7 per cent increase from September 28 to 30, compared with the same periods in September 2007, STB had said previously. However, for the entire month of September, visitor arrivals dipped 4.1 per cent to 739,000, dragged down by weaker numbers in the first few weeks of the month.

The big question now is how the hotels will fare this year, given that both business and leisure travel are already being hit amid the current economic crisis.