Hotel rates up, occupancy down during F1 period

Source : Business Times - 28 Feb 2009

IT’S finally the moment of truth.

Data reveals that local hotel room rates surged 150.4 per cent on average to $616 during the 2008 Formula One (F1) race period of Sept 24-28. But at 75 per cent for the five-day period, occupancy was six percentage points lower than the overall average occupancy rate (AOR) for 2008.

Revenue per available room (Revpar) came in 132.3 per cent higher at $462, compared to overall Revpar for 2008. The average length of stay recorded by foreign visitors was more than five days, according to figures released yesterday by the Singapore Tourism Board (STB).

Some $168 million was chalked up in incremental tourism receipts - significantly higher than the $100 million projected initially - as over 100,000 spectators attended the race, of which some 40 per cent were tourists. The Singapore leg was watched by over 110 million viewers worldwide.

And given the ailing tourism industry, the F1 hotel levy - which required trackside and non-trackside hotels to fork out 30 and 20 per cent of room revenue respectively during the 2008 race period - is in the final stages of review. An announcement is expected soon.

Last year, hotels hiked room rates sharply for the race period and some also stipulated a minimum number of nights, which could explain the occupancy rate of 75 per cent.

While many hotels later slashed rates as tourists seemed unwilling to pay such steep prices, the inflated room rates may have kept some tourists - F1 and non-F1 fans alike - at bay.

Meanwhile, January tourism figures continued the downward slide in a testament to the weakening global economy.

Despite the Chinese New Year holidays, visitor arrivals for the month were down 12.9 per cent year-on-year to 771,000 as travel worldwide continues to wane.

Indonesia, China, Australia, India as well as Malaysia accounted for about half of all tourist arrivals during the month. However, tourist numbers from Vietnam were 53.6 per cent higher year-on-year, thanks to air travel promotions as well as the Chinese New Year holidays.

Singapore gazetted hotels pulled in $124 million in room revenue, a staggering 29.9 per cent less than the corresponding month in 2008.

Average room rates (ARR) for hotels were 11.7 per cent lower year-on-year at $209, while AOR dropped to 67 per cent, a 17.7 percentage point fall from January last year, and Revpar plummeted 30.2 per cent to $140.

Hotels in the mid-tier scored the highest AOR of 69 per cent, while economy-tier hotels saw the smallest decrease in ARR and Revpar year-on-year, with a 3.4 per cent dip and a 26.8 per cent decline respectively. Upscale hotels saw the biggest fall in ARR - down 13.7 per cent - while luxury hotels were down 12.6 per cent.