Nonetheless, the industry can still see go somewhat gaga when Bad Romance is sung here. "We think the recent news flow on Lady Gaga’s concerts could draw investors’ attention to hospitality REITs and provide some trading opportunities," says Lock.
According to her, in 1QFY2024, when Swift's concerts were held, all three hospitality S-REITs under CGS International's coverage - CapitaLand Ascott Trust, Far East Hospitality Trustand CDL Hospitality Trust - saw RevPAR growth.
Ticket website Klook is selling concert packages including hotel stays and she expects some CapitaLand Ascott Trust’s (CLAS) hotels could participate in the bundle offering, she reasons.
"While we expect upsides for the hotel industry from the high-profile concerts, we remain cautious on the extent of RevPAR growth that Lady Gaga could bring," says Lock.
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According to the Singapore Tourism Board, there had been a sequentially stronger international arrivals of 1.63 million for January, surpassing the pre-pandemic Jan 2019.
Average hotel RevPAR remains elevated at S$224, driven by higher occupancy (82.5%) and largely flat average room rates. As inbound travel demand stays buoyant, CLAS’s Singapore RevPAR to stay robust in the first quarter of this year, says Lock.
Citing the management of CLAS, distribution this current FY2025 should remain "stable" while in the medium term, Lock expects core distribution to grow when assets now undergoing enhancements resume operation.
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Taking into account her estimates of how various CLAS properties will do, Lock has lowered her distribution per unit estimates for FY2025 and FY2027 by 2.7-9.4%, leading to a slightly trimmed target price of $1.13, down from $1.18.
CLAS units changed hands at 88 cents as at 2.19pm, unchanged for the day and down 1.69% year to date.
