In a Wednesday report, lead analyst Deborah Ong notes that all hospitality trusts under OCBC’s coverage which have announced their latest set of earnings so far have registered declines for full-year revenue per available room (RevPAR) growth.
The only exception is Frasers Hospitality Trust (FHT), which bucked the trend with a 6.1% y-o-y increase for its RevPAR in 1Q for Fraser Suites and InterContinental Singapore (ICSG), mainly due to a full room inventory in ICSG compared to the year before, when some rooms went under renovation and hence were taken out of operation.
Ong highlights that although 2017 is an odd-number year which historically tend to see fewer meetings incentives, conferences and exhibitions (MICE) and large-scale sporting/entertainment events, other factors driving demand, such as global economic sentiment, are “much more significant” to contributing to overall RevPAR.
“The growth in hotel supply room, which is expected to be ~6% this year, is also a key consideration going forward,” she adds.
As at 9.36am, OUE HT is down by 0.74% at 68 cents. Units of ART, CDREIT, and FEHT are trading at $1.14, $1.38 and 60 cents respectively.
