Hotel room rates down 9%, expected to rise this year

SINGAPORE — International travellers to Singapore last year were able to enjoy cheaper stays, as the average room rate fell by 9 per cent to S$239 compared with that in 2013, the latest Hotel Price Index released by booking site Hotels.com showed.

This is in line with the decline in average room rates tracked by the Singapore Tourism Board (STB), which said last month the average room rate was S$258 last year, compared with S$262 in 2012.

Hotels.com’s figure is based on bookings made on its website while STB uses monthly data submitted by hotels.

Hotels.com regional director Katherine Cole explained that the most recent dip in room rates here could be due to various factors. These include currency changes, increased supply of hotel rooms as well as a fall in the number of international travellers last year, driven by geopolitical tensions and several aviation incidents.

Room rates are expected to climb this year, said Ms Cole, who is based in Sydney. “Lower hotel room rates signify greater affordability for global travellers. As such, we expect to see a rise in demand for travel to the city-state,” she said.

“Singapore is also playing host to a large number of festivities and events this year, which will consequently drive up room prices.”

Falling room rates come on the back of a slump in visitors to the Republic last year — the first dip since 2009 — and a relentless surge in hotel development.

Smaller and newer hotels have been feeling the pressure and trying to stay afloat by cutting room rates during off-peak periods and turning to new market segments.

Hotels told TODAY they have adjusted their room rates downwards over the past year to stay competitive.

Link Hotel’s marketing and communications assistant manager Calista Lee said with more hotels and hostels coming up, rates at their 288-room hotel were lowered by about 9 per cent — in line with Hotels.com’s estimate — to remain competitive.

Naumi Hospitality, which has ventured into South Korea and Taiwan, also tweaked the room rates of its two hotels downwards.

“With new markets, guests can be more price-sensitive when considering new hotels,” said the group’s hotel manager, Mr Christy Guna Desa.