In the three days after Coldplay tickets went on sale, digital travel platform, Agoda, observed an 8.7x search increase for accommodations in Singapore during Coldplay’s concert series in Jan 24, state Ong and Lock, citing a report by the Straits Times.
The searches mainly originated from Malaysia and Indonesia, although visitors from HK, Thailand, Vietnam, India, the Philippines and Australia are expected as well.
The analysts, in their June 28 note, point out that foreigners accounted for 49% of the attendees of the 2022 F1 Singapore Grand Prix.
By applying an assumption that 30% of the concert attendees are foreign visitors and that half of them will stay for at least a night, that could boost hotel occupancy by between 5 and 8 percentage points during the concert days, and nudge FY2024 RevPar estimates by between 1.5% and 1.9%.
There are three hospitality REITs under CGS-CIMB's coverage: CapitaLand Ascott Trust , CDL Hospitality Trust and Far East Hospitality REIT - all of which have an "add" rating.
According to Ong and Lock's forecasts, Singapore accounts for 19%, 62% and 100% of their respective gross profit.
Based on their sensitivity analysis, the two concerts could translate into potential FY2024 DPU upsides for CLAS, CDLHT and FEHT of 0.2%-0.3%, 0.8%-1.0%, and 1.1%-1.5%, respectively.
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The analysts expect further upside from Swift. For now, she will be doing six shows in Singapore in early March. Given that Singapore is the last leg of her Asian tour, they are optimistic that Swift will add up to three more nights.
Besides Coldplay and Swift, Singapore's 1Q events calendar includes the Singapore Airshow in February, adding to the historically strong numbers, thanks to Chinese travellers "looking to escape" from the Chinese New Year back home.
"As China’s flight capacity normalises, we could see this trend returning, further supporting 1Q2024 numbers," the analysts write.
"Expect an exceptionally strong 1Q2024," they add.
CGS-CIMB's target prices for CLAS, CDL-HT and FEHT are $1.27, $1.55 and 79 cents respectively.
