Singapore The Next Chapter in Hotels & Tourism - Hotels & Hospitality Group | September 2017
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Hotels & Hospitality Group | September 2017 Singapore The Next Chapter in Hotels & Tourism
A top tourism destination
Singapore is one of the world’s leading destinations for In 2016, international visitor arrivals into Singapore
business travellers and leisure-seeking tourists due to increased 7.7% y-o-y to a record high of 16.4 million.
its geographical location, stable business environment, Strong growth in arrivals from Mainland China,
enticing retail offer and world class infrastructure. Indonesia and India were key drivers of this growth.
According to MasterCard’s 2017 Asia Pacific Destinations Mainland China was Singapore’s second largest source
Index tourism survey, Singapore took second spot market contributing to almost 17% of total visitor
after Bangkok based on the number of international arrivals and accounted for the largest y-o-y increase
overnight visitor arrivals recorded across Asia Pacific. of 36%. Indonesia, the traditional top source market
However in terms of tourism spending, Singapore contributing to the same proportion as Mainland China,
claimed top spot with total expenditure at USD 15.4 recorded a moderate increase of around 6%.
billion. Bangkok achieved second place in the survey
The Singapore Tourism Board (STB) continues to make
(USD 12.7 billion).
concerted efforts to promote the island state in many
As a haven for long-term investment, strong trading countries abroad, particularly Mainland China. The
performance and capital appreciation in terms of hotels, STB has also been targeting long haul markets such
Singapore is well sought after amongst investors seeking as Germany and emerging regional markets such as
hotel ownership within the region. However, despite the Vietnam, both recording healthy rises of 15% and 12%
significant interest, deals have been limited in recent respectively in visitor arrivals last year.
years because of the lack of opportunity to acquire
The latest visitor arrivals as at YTD June 2017 reported
properties. Like much of Asia, hotel owners in Singapore
an increase of 4.5% y-o-y, reaching 8.5 million tourists.
are viewed as 'generational' - meaning vendors are less
This is positive news and confirms Singapore is well
likely to sell and rather retain their asset for the long
on the way to achieving STB’s 2017 growth forecasts in
term.
total arrivals (16.4 to 16.7 million – 0% to +2%).
719.2 km2 5.6 million SGD 410.3 billion
Land Area Resident Population in 2016 2016 Nominal GDP
International Visitor Arrivals
18,000,000 100%
7.4% 7.7%
16,000,000 -3.0% 0.9%
10.1%
Annual Growth (%)
13.1%
80%
14,000,000
Visitor Arrivals
12,000,000 20.2% 60%
10,000,000
40%
8,000,000
6,000,000 20%
4,000,000
0%
2,000,000
0 -20%
2010 2011 2012 2013 2014 2015 2016 2017F YTD YTD
June June
2016 2017
International Visitor Arrivals Annual Growth
Source: Singapore Tourism Board (STB)
2
Top 10 Source Markets (YTD June 2017)
UNITED KINGDOM
USA 3.1%
3.4% MAINLAND
4.2%
CHINA JAPAN
18.2%
SOUTH KOREA 3.7%
INDIA
7.7% PHILIPPINES
4.5%
MALAYSIA
6.6% INDONESIA 17.2%
AUSTRALIA
6.1%
25.3% OTHERS
Top Source Markets (YTD June 2017)
st nd rd
1 2 3
Mainland China Indonesia India
18.2 % 17.2 % 7.7 %
Top Growth Markets (YTD June 2017)
st nd rd
1 2 3
India USA United Kingdom
15.0 % 9.4 % 6.6 %
3
World class
transport infrastructure
Singapore recently took the top spot in Mercer's 2017 With a common goal in promoting Singapore as a
'Quality of Living' survey for city infrastructure with a stopover destination, STB, Changi Group and Singapore
commitment to creating a world class transportation Airlines have renewed their three-year partnership for
network across land, air and sea that has been admired SGD 33.8 million. Initiatives under the project include the
globally. ‘Free Singapore Tour’ that caters to transit passengers.
These have been widely popular with tours drawing up
Serving more than 100 airlines and connecting with
to 59,000 participants in 2016, an increase of around 8%.
380 destinations, Changi Airport was recognised as the
World’s Best Airport by Skytrax for the fifth consecutive Cruise passengers to South East Asia are also projected
year. The transportation and transit hub had a record to increase substantially. With infrastructure issues
58.7 million passengers in 2016, an annual 5.9% increase in South East Asia often raised by cruise operators as
as compared to 2015. challenges that limit growth, Singapore is well ahead of
its competition with sufficient berthing facilities via the
With air traffic in Asia outpacing the Middle East for the
Singapore Cruise Centre and Marina Bay Cruise Centre
first time in five years, growth in air travel in the region
Singapore. Connectivity between the airport and cruise
is expected to remain steady. Based on historic growth
terminals is relatively seamless.
and future projections, Changi Airport could achieve up
to 100 million passengers in 2030 according to leading Singapore is the main departure point for round-trip
forecasters. cruises to Asian destinations such as the islands off
Malaysia and Thailand, Indonesia, Myanmar and even
4
Hong Kong. The city was also named ‘Destination of the liner, the Genting Dream, will be based year-round
Year’ at the Seatrade Cruise Awards 2016 for the second in Singapore starting from December 2017. This is
time in three years and top Asian port of call under the expected to attract 200,000 foreign cruise passengers
Cruiser Award in 2016. Numerous collaborations with and generate about SGD 80 million in tourism receipts
nearby regions and industry partners are in place to according to the STB.
allow the city to maintain its premier status.
Plans to promote the fly-cruise segment is ongoing.
With aims to endorse Singapore as a leading cruise For instance, a recent tripartite agreement between
destination in the region, the STB has promoted Royal Caribbean (the region’s largest cruise brand),
the new ‘Cruise South East Asia’ brand to improve Changi Airport Group and STB generated approximately
brand recognition in the region. The cruise sector has 45,000 foreign visitors over the October 2016 to March
benefited from four memorandums of understanding 2017 period via two ships (The Ovation of the Seas and
signed by Singapore and Indonesia in 2016 which Voyager of the Seas). Changi Airport is also working on
encompasses collaborations in tourism, hospitality and long term ideas to facilitate direct baggage transfer for
infrastructure. fly-cruise passengers.
Due to its central location, Singapore is a popular home
port for cruise liners such as Princess Cruises for their
regional tours across South East Asia. Genting Hong
Kong has recently announced that its luxury cruise
5
6
Air
The SGD 1.3 billion Terminal 4 has an estimated In addition, Terminal 5 which is expected to be larger
capacity of 16 million arrivals and is expected to than Terminal 1, 2 and 3 combined is targeting a
boost total capacity at Changi Airport to 82 million. 2025 opening. The new terminal will add 50 million
The terminal will host nine airlines to begin with passengers per year. It includes the implementation
including AirAsia group's four airlines, as well as of a three-runway system and supporting
Cathay Pacific, Cebu Pacific, Korean Air, Spring infrastructure. Once completed, Changi Airport
Airlines and Vietnam Airlines. The terminal offers would be able to handle an estimated 150 million
Changi Airport's first end-to-end fully automated passengers in total.
departure process called Fast and Seamless Travel
While unconfirmed, Terminal 5 at Changi Airport is
(FAST).
proposed to be connected to both the upcoming
At SGD 1.7 billion, the Jewel at Changi Airport is Thomson East Coast line and Cross Island line so as
being developed as a premier retail precinct with to facilitate greater accessibility to central Singapore.
around 300 retail and dining outlets including a
hotel. Aimed at Changi Airport's growing transit
travellers who are currently a third of the airport’s
total traffic, the project is due for completion in 2019.
Rail
With travel times estimated to be as short as 90 Construction is now underway for the Thomson-East
minutes, the High-Speed Rail (HSR) between Coast line as well as the Cross Island line. The Jurong
Singapore and Malaysia is expected to be a game Region line is also proposed for improvement. This
changer. Due to begin operations in 2026, the coupled with planned line extensions for the North
completed project is expected to lead to an increase East line and Downtown line will double the rail
in the number of day trips and short stays by leisure network by 2030. Improved access to the Jurong
travellers as well as the number of MICE visitors and Industrial District, which has been touted as the
corporate travellers coming from Malaysia. Second Central Business District, is certain.
7
New hotel brands set to
make their mark
In 2017, just over 3,000 new hotel rooms will enter the Collection Hotel, the InterContinental in Roberston Quay
city leading to an increase of approximately 5% on and an Andaz located in Bugis – the first Hyatt-operated
existing rooms. The bulk of this new supply comes from hotel in Singapore since the Grand Hyatt in Scotts Road
the midscale market (37%) followed by the upscale opened in the early 1970s.
market (33%). The growth of both markets is in line
New entrant Yotel will open with 600 ‘cabin’ rooms in
with a structural shift in corporate accommodation
Orchard Road in September 2017. A growing number of
requirements via new employment industries growing
similar-styled hotels have opened in recent years across
in prominence. These new industries include financial
Asia to cater for the rise in single travellers looking for
technology or 'FinTech', where professionals in this
lower-priced fully-equipped rooms at an affordable
sector often have lower corporate travel budgets
nightly rate. This hotel concept offers opportunities to
preferring both midscale or upscale hotels as opposed
socialise with other guests in shared leisure facilities.
to luxury.
This is the first foray of the Yotel brand in the region.
More ‘affordable luxury’ hotel brands are now making
Looking forward, new room supply into Singapore is
headway in Singapore as they embark on a spate of
expected to taper down significantly in 2018. It has
new launches. Affordable luxury hotels are increasingly
been around three years since Singapore’s government
common as the concept of luxury democratises.
released land for future hotel development under the
According to a report by Euromonitor, affordable luxury
Government Land Sales (GLS) programme and given
has emerged as a growing sector - a result of the up-
current sentiment, new plots for hotel development are
scaling of mass market accommodation options and the
unlikely.
anti-premiumisation of the traditional luxury market.
The ‘luxury’ segment (28% of new supply) is also
notable. New entrants to the market will include Sofitel
Singapore City Centre, The Duxton Club-House,a Luxury
New Hotel Supply by Segment New Hotel Supply by Segment
(2017) (2018-2020)
33% 2% 25% 5%
28% 21%
37% 49%
Budget Luxury Midscale Upscale
8 Source: JLL
Project Name Opening Positioning Rooms
Aqueen Hotel Little India 2017 Budget 70
Hotel NuVe Heritage 2017 Midscale 19
YOTEL Orchard Road 2017 Midscale 610
Mercure Singapore on Stevens 2017 Midscale 528
Courtyard by Marriott Singapore Novena 2017 Upscale 250
Novotel Singapore on Stevens 2017 Upscale 254
Park Hotel Farrer Park 2017 Upscale 300
The Warehouse Hotel 2017 Upscale 37
Dusit Thani Laguna Singapore 2017 Upscale 197
Villa Samadhi 2017 Luxury 20
The Duxton Club - House, a Luxury Collection Hotel 2017 Luxury 49
Sofitel Singapore City Centre 2017 Luxury 223
InterContinental Robertson Quay Singapore 2017 Luxury 225
Andaz Singapore 2017 Luxury 340
The Duxton Club -Terrace, a Luxury Collection Hotel
2018 Luxury 109
(Previously Berjaya Hotel)
The Patina, Capitol Singapore 2018 Luxury 157
YOTELAIR Singapore Changi Airport 2019 Midscale 130
The Clan Far East Square 2019 Midscale 292
Village Hotel Sentosa 2019 Midscale 620
Capri by Frasers, China Square 2019 Upscale 304
Outpost Hotel Sentosa 2019 Upscale 230
Aqueen Hotel Geylang 2020 Budget 100
The Singapore EDITION 2020 Luxury 190
Source: JLL (Details are subject to change)
9The hotel & tourism
market outlook
Singapore is a leisure destination of choice in Asia. It’s also a globally and first in Asia in terms of health-related services.
highly transparent market to conduct business. The Singapore This is based on the 2016 Medical Tourism Index. However,
Government announced SGD 700 million will be injected despite holding on to its position as a world class medical
over the next five years through the Tourism Development hub, the city is receiving stiff competition from rivals such as
Fund (TDF), designed to help the industry reposition itself for Bangkok. Nevertheless, Singapore rates very highly on overall
stronger tourism growth with a focus on near-term challenges patient satisfaction.
and future opportunities.
Announced in 2013, the 17-hectare Novena Health City is due
One of the most popular events of the year, the Singapore to be completed in 2030. The site focuses on learning and
Grand Prix, continues to draw many tourists in September. development, connectivity and community which will house
The race has been profitable on the whole with an estimated the National Centre for Infectious Diseases and Ng Teng Fong
net economic benefit of over SGD 1 billion over 10 years and Centre Centre for Healthcare Innovation as well as the Tan
an additional SGD 1 billion in increased tourism. Tock Seng Integrated Care Hub.
The Singapore government’s consistent track record in Creating new attractions such as Gardens by the Bay have
restructuring and preparing the country for macro-economic always been key to boosting leisure tourism. The most
changes also contributes to strong investor confidence and a interesting project in the pipeline is the Mandai eco-tourism
prime location for hosting MICE events. While Singapore still hub located in the northern region of Singapore, famously
has the upper hand with its superior infrastructure, the city known for being the location of the Singapore Zoo and Night
must adapt and take advantage of current opportunities. Safari. The project will see the relocation of Jurong Bird Park
and the development of a new rainforest park and other
In terms of medical tourism, Singapore was ranked forth
public space. The entire area currently attracts 4.6 million
10visitors per year. The completed project is expected to bring daily Sydney-London A380 service via Singapore instead of
in an estimated 10 million visitors annually. Dubai and increase capacity on Melbourne outbound flights.
Historically, more than 5.5 million passengers travel between
The island resort of Sentosa is currently master planning
Singapore and Australia annually, making the country one
a large scale redevelopment. The Sentosa Development
of Changi Airport’s top five country markets in terms of
Corporation (SDC) is working on a 2030 Masterplan which
passenger traffic. This figure is certain to grow from next year.
includes repositioning the island as both a day and night
destination. And finally in terms of room supply, the market is nearing
the end of a protracted rise in new hotels. Known new hotel
Recent changes to regulations have placed Singapore ahead
projects post-2018 suggest substantially slower hotel supply
of Hong Kong in a bid to be Asia’s FinTech hub. The Monetary
growth longer term. Market commentators have been quick
Authority of Singapore (MAS) has also vowed to invest SGD
to highlight an apparent ‘oversupply’ in the city but it should
225 million by the end of 2020 to achieve this goal. The MICE
be noted that occupancy has still comfortably withstood rates
sector is set to benefit from the STB’s active support for
above 80% over the last year.
business events. The government agency supported more
than 410 events in 2016, a 15% increase on the previous year. Overall, Singapore's hotel and tourism outlook is positive
The STB remains highly supportive of the MICE sector. long term. Trading performance has compared favourably
to many regional hub markets and it won't be long before
In a move that is sure to boost the number of Australians
demand and supply are back in balance.
visiting Singapore from March 25 next year, Qantas Airways
recently announced it will make Changi Airport its largest
hub outside of Australia. The airline will soon reroute its
11Tourism achievements &
key initiatives at a glance
16.4
Million SGD
24.8
Billion
International Visitor Tourist
Arrivals Receipts
2016 7.7% 2016
5.9%
CAGR International
< 3%
Increase in hotel
Visitor Arrivals room supply from
2010-2016 2018
< 2%
FORECASTED increase
in Visitor Arrivals
2017
12ENHANCING DESTINATION
STRATEGIC MARKETING
ATTRACTIVENESSS
Creating new attractions and
Global campaigns in Tier 1 and Tier 2 rejuvenating old ones
cities in China, as well as long haul and
10
emerging markets
Specialised marketing million
campaigns and partnerships
Estimated visitors per Opportunity to
with local digital players
annum to the upcoming pedestrianise
Mandai Eco Tourism Hub Orchard Road
BRINGING IN THE
EXCITING EVENTS
BUSINESS TRAVELLER
3
YEAR
10
million
$
225
Smart Nation initiatives
and the upcoming
Jurong Lake District
PARTNERSHIP Allocated to STB million will be key in winning
Between Disney Kickstarter Fund MAS investment in
and STB to support the launch Fintech by 2020 A Technology
of new events Hub Status
GROWING MICE WINNING IN
DEMAND MEDICAL TOURISM
410 20 %
17
HECTARE
Hospitality
X
Events supported Increase
by the STB in Y-O-Y of MICE Medical Services
2016 visitors New concepts
providing a holistic
20,000
Novena Health City to be service on the rise
SEVERAL EVENTS completed in 2030
ARE SECURED
TILL 2020
Expected attendees to Lions Club International Convention
13Research Frank Sorgiovanni Head of Research Asia Pacific frank.sorgiovanni@ap.jll.com Investment Sales Mike Batchelor Nihat Ercan Adam Bury International Director Managing Director Senior Vice President Head of HHG Investment Sales Investment Sales Investment Sales Asia Asia Asia mike.batchelor@ap.jll.com nihat.ercan@ap.jll.com adam.bury@ap.jll.com Strategic Advisory Troy Craig Tasos Kousloglou Giuliano Esposito Managing Director Executive Vice President Senior Vice President Strategic Advisory Asset Management Strategic Advisory Asia Pacific Asia Asia troy.craig@ap.jll.com tasos.kousloglou@ap.jll.com giuliano.esposito@ap.jll.com www.jll.com/hospitality JLL’s Hotels & Hospitality Group has completed more transactions than any other hotels and hospitality real estate advisor over the last five years, totalling more than $68 billion worldwide. Between negotiating the world’s most extraordinary, enticing, and profitable property deals, the group’s 350-strong global team also closed more than 4,400 advisory, valuation and asset management assignments. Investors worldwide turn to JLL to shape their strategies, tailor their portfolios and maximise the value of their assets. We are recognised as the global leader in real estate services across hospitality properties of all shapes and sizes. Our expert advice is backed by industry-leading research. We apply our broad spectrum of hotel valuation, brokerage, asset management and consultancy services through every phase of the hotel lifecycle. We have helped more hotel investors, owners and operators achieve high returns on their assets than any other real estate advisor in the world. Whether you are looking for a hotel or you’re ready to sell, we’ll use our capital markets expertise, hospitality industry knowledge and global relationships to put the right parties together and execute a bespoke deal that exceeds your objectives. For more news, videos and research from JLL’s Hotels & Hospitality Group, please visit our website www.jll.com/hospitality. Jones Lang LaSalle’s Hotels & Hospitality Group Singapore CEA Licence: L3007326E
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