Occupancy rates picking up as corporate travel improves; hoteliers expect leisure travel to rise with IRs’ opening
WITH hotel occupancies having clawed their way up to healthier levels this quarter and tourism starting to show signs of recovery, the hotel industry appears to be regaining lost ground.
Room rates, which also came under pressure this year thanks to a slump in travel demand, are also likely to start increasing gradually in line with the market, some hotels said.
According to Hong Leong Group subsidiary Millennium & Copthorne (M&C) Hotels, its hotels pulled off a solid showing in the third quarter, with average occupancy rate (AOR) jumping to 86.1 per cent, up from 74.8 per cent in the first quarter and 75.5 per cent in the second quarter.
‘Occupancy for 4Q09 is expected to continue in this recovery trend,’ said a spokesperson for M&C, whose portfolio includes Orchard Hotel and the Grand Copthorne Waterfront.
For the Rendezvous Hotel, occupancy is at the 80 per cent mark currently, compared to 70 per cent in the early part of the year.
‘Average room rate has gone up by more than 10 per cent compared to the low rates experienced in July-August, which is a lull period for us,’ said its general manager Kellvin Ong.
Over at the Pan Pacific, booking trends have been picking up, compared to the first half of this year where occupancy rate was softer year-on-year.
Fourth-quarter figures are expected to be bolstered by Apec week in November which brought 10,000 dignitaries and members of the international media to Singapore. Food and beverage sales for the year-end festivities are also expected to prove better than last year in light of the recovering economy.
For luxury hotel St Regis – which played host to President Hu Jintao and the delegation from China during Apec week – fourth-quarter occupancy has grown by 14 percentage points year on year.
Corporate travel – which took a nosedive in the earlier part of this year as companies slashed travel budgets to contain costs – also seems to be picking up.
‘The last quarter of 2009 has been positive with an increase in corporate room bookings, which has helped to boost our average occupancy and rates,’ said Pan Pac’s public relations manager, Cheryl Ng. She also added that room rates are likely to grow marginally in 2010, while the occupancy level should also do so by at least five percentage points.
The Rendevous Hotel, which expects to gradually start revising its rates upward in line with the recovering industry, is also banking on the corporate demand to push up room rates.
Others, such as the Marriott, are upbeat that 2009 will end on a better note than it began.
‘Room occupancy has risen and the general business sentiment has lightened up,’ said Marriott’s marketing director Julie Yeong.
Meanwhile, M&C said that it will ’scale back’ on existing discounted packages, given that occupancy is treading above 80 per cent, but plans to introduce other higher value-added packages. M&C also expects next year’s revenue per available room (RevPar) to grow year-on-year as the recovery in the tourism sector picks up steam.
And with the much- talked-about Resorts World at Sentosa (RWS) and Marina Bay Sands (MBS) slated to open their doors next year, hoteliers expect to benefit from the new kids on the block, despite the hefty injection of industry supply. RWS alone adds some 1,800 rooms.
‘We expect the increase in hotel rooms will initially displace the equilibrium in the market. However, in the long-run, demand will grow,’ reckons Ms Ng.
For starters, visitors may prefer to be away from the crowds or require more affordable accomodation. Traditionally, hotels within theme parks tend to charge a premium compared to hotels in the surrounding area.
The presence of the integrated resorts could also boost weekend rates and occupancies.
‘Hotels currently tend to experience weaker occupancies and rates during the weekends. With the expected spike in leisure visitors to Singapore over the weekend, it may not be surprising to see hotels registering higher occupancies and possibly even higher rates,’ M&C’s spokesperson pointed out.
Source : Business Times – 12 Dec 2009
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