The Republic of Singapore is a metropolitan city-state and island nation in Southeast Asia with a complete land space of an estimated 714.3 sq. kilometres. It’s located on the southern tip of the Malayan Peninsula, between Malaysia and Indonesia. With an economic system supported by its rising inhabitants of roughly 5.7 million folks, Singapore has witnessed exceptional document of sustained financial development all through the years and bolsters its position as a world commerce, finance and transportation hub.
Because of the affect of the Covid-19 pandemic, Singapore’s general economic system contracted by 5.4% in 2020. Though the providers sector contracted by 6.4% in 2020, the providers sector is forecasted to stay the most important contributor to Singapore’s Gross Home Product (GDP) from 2021 to 2025. The restoration is projected to be led by monetary providers and logistics actions.
Tourism stays an essential pillar in driving financial development in Singapore. Based on the Division of Statistics Singapore, the lodging sector contributed 0.4% to Singapore’s nominal GDP in 2020.
In 2020, tourism arrivals have slumped to 2.7 million from 19.1 million in 2019 because of the journey disruption attributable to Covid-19. Exercise within the resort funding has additionally been mushy in 2020, with solely two inbound resort transactions, contributing to an funding quantity of 539 million amidst the worldwide economic system uncertainty.
In 2020, the worldwide financial development was impacted by the Covid-19 pandemic which has resulted in international locations occurring lockdown and inventory markets to plunge. Actions around the globe had seemingly come to a halt with travelling restricted and work-from-home changing into a brand new regular. US-China political stress continues to be unsure, together with the plans for Brexit. With rising uncertainties within the geopolitical panorama and world market pressures, worldwide commerce and funding actions have softened and is anticipated to stay subdue. Based on the World Financial institution, world financial development is projected to broaden at 4% in 2021, albeit a gradual restoration from 4.3% contraction in 2020.
Determine 1: Financial Outlook
Economist Intelligence Unit, March 2021
Financial Efficiency & Outlook
Given the reliance of Singapore’s economic system on world financial outlook, the weakening of the worldwide economic system because of the Covid-19 pandemic has resulted in a 5.8% contraction in actual GDP in 2020. Restoration is anticipated in 2021 with an growth of 5.1% as financial actions step by step resumes and shopper sentiment improves with the implementation of a city-wide vaccination programme. Nonetheless, exterior demand is more likely to stay weak as entry to vaccine stays uneven in different elements of the world.
Forex Trade Outlook
In April 2020, the Financial Authority of Singapore (MAS) has set the speed of appreciation of the nominal efficient alternate price (NEER) coverage band at zero % each year, beginning on the then-prevailing degree of NEER. Economist Intelligence Unit (EIU) expects the Singapore greenback to expertise a marginal appreciation in 2021 on the again of a weaker buck, reaching S$1.36:US$1 in 2021 in comparison with S$1.38:US$1 the 12 months earlier than.
Because of the pandemic, shopper worth inflation has declined marginally by 0.2% in 2020. Transferring ahead, EIU expects inflation price to extend to 1.6% in 2021, owing to partial restoration in shopper demand, in addition to world vitality and non-energy costs. EIU forecast that inflation will rise by an annual common of 1.3% within the subsequent 4 years from 2022 to 2025. Nonetheless, inflation for tourism-related providers is projected to stay weak as restrictions on worldwide travellers stays.
As at December 2020, the 3-month Singapore Interbank Supplied Price (SIBOR) was recorded at 0.41%, a major lower from the earlier 12 months which recorded at 1.77% as of December 2019. Based on EIU, the lending rate of interest remained steady at 5.3%. The discount in SIBOR is attributable to the speed cuts by the US Federal Reserve (Fed). In 2020, the Fed reduce rates of interest to close zero, and has led to USD120 billion in government-backed debt to cushion the pandemic’s affect on companies.
TEL Section 2: Addition of 6 new stations from Springleaf to Caldecott.
New Museum of Ice Cream Singapore in Dempsey space will function multi-sensory installations themed across the dessert. The attraction is slated to open within the second half of 2021.
New adrenaline experience, Slingshot, situated in Clarke Quay subsequent to present attraction GX-5 Excessive Swing. The Slingshot would be the tallest in Asia and see riders being catapulted nearly 70-metres into the air, reaching a velocity of 160-kilometres per hour.
TEL Section 3: Addition of 13 stations to offer direct entry to the CBD and Marina Bay, from Mount Nice to Gardens by the Bay.
Sentosa-Brani Grasp Plan Section 1: Addition of Sentosa Sensory, a linkway connecting Resorts World Sentosa and the southern seashores.
Mandai Eco-Tourism Section 1: Opening of the brand new Chicken Park.
New SkyHelix Sentosa, an open-air rotating gondola that may ascend 35-metres above floor and provide views of Singapore’s southern coast.
TEL Section 4: Addition of 8 stations connecting Founders’ Memorial to Bayshore.
Extension of Downtown Line with two stations – Xilin and Sungei Bedok. Allow direct connection to East-West Line and TEL.
Mandai Eco-Tourism Hub: new Rainforest Park and eco-resort.
NEL: Addition of New Punggol Coast Station.
CRL Opening: Together with 12 stations from Aviation Park to Vibrant Hill.
Larger Southern Waterfront (Subsequent 5-10 years).
Ongoing revitalization of Orchard Street to reinforce its attraction as a life-style vacation spot.
4-km RTS Hyperlink from Woodlands North to Johor Bahru, Malaysia anticipated to be operational in 2026.
4-km CCL6 will shut the loop with the addition of three stations, connecting Harbourfront to Marina Bay.
Jurong Lake District Tourism Hub will function a business node, blended use precinct, complementary leisure and leisure precinct, and Worldwide Enterprise Park.
24-km JRL to finish in 2028.
Marina Bay Sands growth so as to add 15,000-seat indoor leisure area and a fourth tower which can function about 1,000 all-suite resort rooms and different services.
Resort World Sentosa so as to add Minion Park and Tremendous Nintendo World to Common Studio. It should additionally add a brand new waterfront life-style advanced and two new vacation spot motels with as much as 1,100 rooms.
Sentosa-Brani Grasp Plan will roll out in phases over two to 3 years, that includes 5 distinct zones: Vibrant Cluster, Island Coronary heart, Waterfront, Ridgeline and Beachfront.
Changi Airport Terminal 5 with a dealing with capability of fifty million each year (delayed past 2030 resulting from COVID-19).
Determine 2: Infrastructure Developments
HVS, Land Transport Authority
Singapore Tourism Panorama
Worldwide Customer Arrivals
Based on Singapore Tourism Board (STB) figures, worldwide customer arrivals has elevated for 4 consecutive years to succeed in a document of 19.1 million in 2019 earlier than reducing by 85.7% to 2.7 million in 2020 because of the journey restrictions led to by Covid-19.
In 2020, in a single day guests quantity decreased by 85.1% from roughly 15 million guests to 2 million guests. Exhibiting an identical pattern is the variety of customer days, which has decreased by 81.7% from roughly 64.1 million days to 11.8 million days.
Determine 3: Worldwide Customer Arrivals (2015-2020)
Function of Go to
With beneficial climate all 12 months spherical and the vary of tourism choices, majority of the worldwide travellers go to Singapore for vacation functions, making up 58% of the guests in 2019. That is adopted by visiting buddies and family (15%) and for basic enterprise functions (9%). Greater than half (51%) of the entire travellers are repeat friends to the island state.
Determine 4: Function of Go to (2019)
STB *2020 information will not be out there on the timing of writing
Worldwide Supply Market
In 2020, Indonesia overtook China as the highest worldwide supply market. This can be attributed to the restrictions imposed on Chinese language guests when the Covid-19 pressure was first recorded in China in December 2019. All worldwide supply markets recorded double digit decline in arrivals, marking 2020 because the lowest performing 12 months by way of customer arrivals to Singapore.
The highest 5 worldwide supply markets to Singapore in 2020 had been: Indonesia (16.6%), China (12.9%), Australia (7.5%), India (6.4%), and Malaysia (5.6%). The 5 markets made up nearly half of the entire customer arrivals to Singapore in 2020.
Because of the journey restrictions imposed globally, Singapore has inspired home tourism throughout the island state by a number of initiatives, such because the SingapoRediscovers vouchers, and different advertising campaigns.
Determine 5: Prime 5 Worldwide Supply Markets (2020)
Common Size of Keep (ALOS) elevated by 1.3 nights, reaching 4.7 nights in 2020 because of the 14-day quarantine requirement because of Covid-19. As of YTD Q3 2020, tourism receipts stands at SGD4.4 billion, a 78.4% lower from final 12 months.
Determine 6: Common Size of Keep and Tourism Receipts (2019-2020)
Singapore Lodge and Branded Service Condo Market
2020 is a quiet 12 months for Singapore’s resort provide development, the room provide solely grew at 0.5%. HVS famous the opening of Dusit Thani Laguna Golf Resort, which added 198 rooms to the market. Properties similar to lyf Farrer Park Singapore and The Clan Singapore which had been alleged to open within the 12 months had been delayed because of the pandemic.
Transferring ahead, HVS tracks the opening of three branded properties in 2021, which can inject 638 rooms into the market. Between 2022 and 2025, an extra 2,334 branded rooms are anticipated to be added to Singapore’s lodging provide. The motels slated to open are primarily positioned within the luxurious and upscale segments.
In a bid to offer ample alternatives for builders to provoke further provide of resort rooms, the federal government periodically updates the checklist of resort websites out there on the market underneath the Authorities Land Gross sales (GLS). Just one web site is obtainable for resort improvement underneath the 1H2021 GLS programme. The 1.02ha River Valley Street may yield as much as 530 rooms and is estimated to offer 2,000 sq. metres of economic area.
Motels Opening in 2021:
Citadines Raffles Place Singapore, 299 keys
MGallery by Sofitel Bideford Hills Singapore, 166 keys
Citadines Join Metropolis Centre, 173 keys
Motels Opening in 2022:
Pullman Singapore Metropolis Corridor, 350 keys
Raffles Sentosa Resort & Spa, 62 keys
Citadines Join Rochester Singapore, 135 keys
Motels Opening past 2022:
Version The Singapore, 190 keys
Banyan Tree Mandai Park, 400 keys
Marina Bay Sands Resort, 1,000 keys
Notable Adjustments within the Lodge Panorama
Rebranding of 575-key Marina Mandarin to PARKROYAL COLLECTION on Marina Bay in late 2020
Former Le Meridien to reopen as 191-key Oasia Resort Sentosa in Q2 2021
Redevelopment of Pan Pacific Orchard, providing 347 rooms upon completion in 2021
Rebranding of 1,077-key Mandarin Orchard to Hilton Singapore Orchard by 2022
Determine 7: Singapore Lodge Rooms Pipeline (2021 to >2024)
City Redevelopment Authority *Deliberate refers to initiatives that aren’t but underneath development however have planning approvals, written and provisional
Singapore Lodge Market Efficiency
Singapore’s resort market efficiency has recorded a decline in 2020. That is attributable to the lockdowns and journey disruptions attributable to Covid-19. Marketwide occupancy declined by 30.1 share factors (p.p.) and Common Room Price (ARR) decreased by 30.2%. General, RevPAR fell by 55.2%, the most important decline previously 4 years.
Transferring ahead, with many international locations nonetheless implementing journey restrictions, the tourism sector in Singapore is more likely to be negatively impacted within the short-term resulting from its reliance on worldwide guests. Till a completely efficient vaccine is confirmed, the uncertainty of resurgence in infections and reimposition of lockdowns will stay.
Determine 8: Singapore General Lodge Efficiency (2016-2020)
STB Word: On 29 January 2018, STB’s resort efficiency statistics from 1 January 2007 onwards have been up to date primarily based on the revised methodology. Subsequently, the above chart shouldn’t be in contrast with beforehand revealed information.
Determine 9: Singapore Lodge Phase Efficiency (2020)
Although Singapore will not be spared from the detrimental impacts of Covid-19, the trade managed to maintain itself by internet hosting important travellers from regional inexperienced lanes, foreigners with air journey move, quarantine friends and native staycation enterprise.
Lodge Transactions and Funding
Lodge Funding Market Slowed in 2020
The Singapore resort funding market has largely been dominated by native traders. Whereas no transactions had been recorded in 2016, transaction quantity picked up from 2017 to 2019. In 2019, the variety of motels transacted elevated to 12, with transaction quantity spiking as much as SGD2.57 billion, the best over the previous years.
Nonetheless, in 2020, as the worldwide economic system has slowed, shopper sentiments have weakened, and the lodging market was hit laborious by journey disruption, the resort funding market has been subdued with solely two transactions in 2020.
Notable transactions in 2020:
403-key Novotel Clarke Quay at SGD375 million (SGD933,000/key)
197-key Somerset Liang Courtroom at SGD163 million (SGD829,000/key)
Transferring ahead in 2021, the resort funding market will presumably see extra funding quantity because of the restoration of traders’ sentiments and the rising curiosity in resort funding post-Covid.
Determine 10: Singapore Lodge Transactions (2016 – 2020)
HVS Analysis & Actual Capital Analytics (RCA)
Outbound Lodge Funding Quantity Shrunk
In 2020, outbound funding by Singapore traders have shrunk in quantity, reducing from USD2.36 billion in 2019 to USD1.64 billion in 2020, representing a 30.5% decline.
Roughly 75.1% of the entire outbound resort investments had been made in Asia Pacific, whereas 14.8% of investments had been made within the Europe, Center East and Africa (EMEA). The remaining 10.1% had been made within the Americas.
Determine 11: Singapore Inbound and Outbound Lodge Transactions (2020)
HVS Analysis & RCA
Determine 12: Outbound Lodge Transaction Market (2020)
Determine 13: Outbound Lodge Transaction Market (2020)
In 2020, Singapore witnessed its best lower in worldwide arrivals and worst resort efficiency lately because of the journey restrictions introduced upon by the Covid-19 pandemic. Singapore has recorded a decline of 30.1 p.p. in occupancy and a lower of 30.2% in ARR, contributing to an general dip of 55.2% in RevPAR. With many international locations nonetheless implementing journey restrictions meant to regulate the unfold of the coronavirus, the tourism sector in Singapore is more likely to be negatively impacted within the short-term because of the lack of worldwide customer arrival. Till a completely efficient vaccine is confirmed, the uncertainty of resurgence in infections and reimposition of lockdowns will stay.
As a distinguished enterprise occasions vacation spot in Asia Pacific, Singapore has maintained a sturdy pipeline of occasions from world congresses to regional conferences previously years. Regardless of the Covid-19 pandemic, Singapore has been chosen to carry a number of high-key occasions in 2021. This contains the ATP World Tour 250 tournaments in February, the IISS Shangri-La Dialogue, and the World Financial Discussion board in August. This has demonstrated occasion organisers’ confidence and belief in the best way that Singapore has dealt with the Covid-19 unfold, furthermore, Singapore can be one of many quickest nation within the Asia Pacific area by way of vaccinated folks per dose.
By way of provide pipeline, HVS notes that there shall be ten branded motels and serviced residences within the pipeline by 2022, which can add 2,276 rooms into the market. Lodge market in Singapore is anticipated to learn from the strong provide and demand fundamentals with the restricted injection of provide into the market over the subsequent few years when journey market recovers.
In 2020, transaction quantity in Singapore dipped to SGD539 million, the bottom over the previous 4 years. This illustrates traders’ reservation in resort funding because of the ongoing uncertainty circling the worldwide market and Covid-19 pandemic.
In a bid to bolster Singapore’s tourism market, the Singapore authorities has established a number of journey inexperienced lanes. As well as, the STB has launched a number of initiatives such because the SingapoRediscovers vouchers to incite home tourism spending, and sealed advertising partnerships with firms similar to Mastercard and Studio Dragon Company to advertise Singapore.
Singapore can even see the event of latest locations such because the Larger Southern Waterfront and Jurong Lake District, and the rejuvenation of current locations similar to Orchard Street and Mandai precinct.
Transferring ahead, Singapore’s resort market outlook is anticipated to be rocky within the short-term and shall be depending on the worldwide restoration progress from Covid-19. Aside from measures to alleviate the speedy impacts, which embrace property tax waiver and license price, the Singapore authorities can even proceed to implement efforts to tide by the impacted intervals such because the [email protected] facility getting used to attract enterprise travellers, and the topping up of SGD68.5 million into the Tourism Growth Fund to assist tourism enterprises amidst the pandemic. STB and related authorities businesses are additionally dedicated to fulfilling mid- to long-term tourism and nationwide improvement plans to make sure that Singapore is ready on the highway of sturdy restoration when the scenario improves.