Vacation Real Estate News
Singapore Hotel Demand to Accelerate in Late 2022
Global property consultant JLL is reporting that Singapore's mid-market hotel sector -- fueled by increased tourist demand and reflected by heightened investment -- will continue to post healthy post-pandemic growth performance in the second half of 2022.
According to JLL's Singapore mid-market hotels outlook 2022, occupancy and investment into the sector will continue to recover in the second half of the year despite broader economic challenges including staffing shortfalls and inflationary-driven supply issues, and more industry-specific requirements such as digital upgrades to properties.
Over the past 18 months, the stable performance of Singapore's mid-market hotel segment has been linked to a variety of drivers including demand for staycations and soaring demand for longer-term temporary accommodation.
JLL data and analysis suggest that the resiliency of the mid-market sector will be further reflected in a solid rebound in investment volumes in 2022, forecast to end of the year at SGD400 million ($288 million). In the first quarter of 2022 alone, mid-market hotel transactions totaled SGD103 million ($74 million), representing the entire half-year volume of 2021 in three months.
"Singapore's mid-market hotel segment is firmly on investors' radars as they take a longer-term view on changing consumption habits and new conversion opportunities available to operators. The pandemic highlighted the sector's role in accommodating longer-term stays, and we see a broader push from the mid-market space to transform properties into co-living spaces," says Noel Neo, Head of Singapore Mid-Markets, JLL Hotels & Hospitality Group.
The trend of co-living conversion has been highlighted by the launch of LHN Group Four Star's joint venture under the Coliwoo brand and the more recent partnership between SLB Development Ltd and Weave Living to convert the Hotel Clover in Jalan Sultan into a co-living property.
According to JLL, for the Singapore mid-market to differentiate offerings and to address a slowdown in new supply, a variety of operational issues must be addressed to enhance the opportunity to attract guests and investors.
Staff shortages in Singapore's hospitality industry will continue to present challenges for mid-market hotels. According to JLL, operators that enhance benefits, flexibility and provide a clear career path will attract and retain talent with greater success. Additionally, offsetting rising inflationary-influenced supply chain costs will push smaller hotels in Singapore to seek partnerships with larger brands to influence better pricing on goods and services. Furthermore, digitalization of the mid-market segment will also need to ramp up for the industry's acceleration to continue, including the adherence to a property management system (PMS) and other tech-inspired experience tools.
"There is a unique opportunity for Singapore's mid-market hotel sector to address challenges swiftly and decisively with a clear operational strategy and a forward-looking lens. Macro-economic factors will continue to influence the fortunes of the sector, but by taking a partnership approach with asset management providers, many mid-market operators can better future proof their assets and attract more guests and capital," says Pierre Marechal, Vice President, Advisory & Asset Management, Asia Pacific, JLL Hotels & Hospitality Group.
