The Lion City's tourism sector has a strong track record of weathering and emerging stronger from past crises.
A strong tourism rebound is forecast for Singapore, re-energising the appetite for hotels. Recently, the hospitality sector was unveiled as the third most resilient sector and likely to rebound post pandemic in Colliers’ Resilience and Rebound Ranking report.
This bodes well for investors, with international arrivals set to rise and returns for hotels continuing to trump other commercial asset classes.
Let’s look at why Singapore is your winning move when it comes to investing in hotels in Asia.
The Returns Card:
- Hotel yields in Singapore are comparatively higher than the average across the region, in relation to other commercial real estate classes.
- Due to land scarcity and use in central Singapore, hotel yields are expected to stay firm.
- The majority of quality hotel assets in Singapore remain tightly held, while investment demand for hotel assets continues to be strong from institutional investors regionally.
- In light of lower yields for most of the traditional asset class, hotels are an attractive investment as it remains a relatively safe haven.
The Tourism Card:
- Singapore's tourism sector is resilient, as demonstrated by its strong track record of weathering and emerging stronger from past crises.
- A rebound over a 12 to 18 month period in tourist arrivals post-crisis is expected, with the tourism sector's fundamental growth sectors remaining largely intact.
- New attractions and infrastructure projects planned for 2021 to 2030 bode well for future visitation.
- A relatively low level of room supply per capita supports hotel fundamentals over the medium term.
Why Singapore is your winning move when investing in hotels across Asia (click to enlarge)
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- Sink or Swim: Which sectors will have the strongest rebound?
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