Demand for hotels in Singapore will accelerate by the end of 2022
Global real estate consultant JLL reports that Singapore’s mid-market hotel sector – fueled by increased tourism demand and reflected by increased investment – will continue to show healthy post-pandemic growth in the second half of 2022.
According to JLL Singapore’s 2022 Mid-Market Hotel Outlook, occupancy and investment in the sector will continue to recover in the second half of the year despite broader economic challenges including staff shortages and management issues. offer linked to inflation, and more industry-specific requirements such as digital property upgrades.
Over the past 18 months, the stable performance of Singapore’s mid-market hotel segment has been linked to a variety of drivers, including demand for staycations and growing demand for longer-term temporary accommodation.
Data and analysis from JLL suggest that the resilience of the mid-market sector will be further reflected in a strong rebound in investment volumes in 2022, expected to end the year at SGD400 million ($288 million). In the first quarter of 2022 alone, mid-market hotel transactions totaled SGD103 million ($74 million), which is the entire half-year volume of 2021 in three months.
“Singapore’s mid-market hotel segment is firmly on investors’ radars as they take a longer-term view of changing consumer habits and new conversion opportunities for operators. The pandemic has highlighted the sector’s role in accommodating longer stays, and we’re seeing a broader push for mid-market space to transform properties into co-living spaces,” says Noel Neo, Singapore Midmarkets Manager, JLL Hotels & Hospitality Group.
The trend towards co-housing conversion has been highlighted by the launch of LHN Group’s joint venture Four Star under the Coliwoo brand and the more recent partnership between SLB Development Ltd and Weave Living to convert the Clover Hotel in Jalan Sultan into a cohabitation property. .
According to JLL, in order for Singapore’s mid-market to differentiate offers and cope with a slowdown in new supply, a variety of operational issues need to be addressed to improve the opportunity to attract guests and investors.
Staffing shortages in Singapore’s hospitality industry will continue to present challenges for mid-sized hotels. According to JLL, operators that improve benefits, flexibility and provide a clear career path will attract and retain talent more successfully. Additionally, offsetting rising supply chain costs influenced by inflation will push smaller hotels in Singapore to seek partnerships with bigger brands to influence better prices on goods and services. In addition, digitization of the mid-market segment will also need to accelerate for industry acceleration to continue, including adherence to a property management system (PMS) and other experience tools. inspired by technology.
“There is a unique opportunity for Singapore’s midstream hotel sector to address challenges quickly and decisively with a clear operating strategy and forward-looking focus. Macroeconomic factors will continue to influence the sector’s fortunes, but by taking a partnership approach with asset management providers, many middle market operators can better future-proof their assets and attract more customers and capital,” says Pierre Marechal, Vice President, Advisory and Asset Management , Asia-Pacific, JLL Hotels & Hospitality Group.