SEA Games Singapore 2015
Singapore, June 2015
The 28th Southeast Asian Games (SEA) ended on the 16th of June 2015, at the Singapore Sports Hub. The region’s biggest biennial multi-sports tournament has celebrated the performances of more than 4,000 athletes, creating memorable events and strengthening the relationship between the 11 participating countries which included; Brunei, Malaysia, Thailand, Cambodia, Myanmar, East Timor, Indonesia, Philippines, Vietnam, Laos, and Singapore.
Top 12 Market Performance
STR Global is proud to present a RevPAR Positioning Matrix (RPM) analysis of the top 12 markets from the SEA participating countries. RPM is a tool that as per this example, displays countries in relation to their Average Daily Rate (ADR) and Occupancy indexes, thus creating a RevPAR ranking index. While Revenue per Available Room (RevPAR) shows the total guest room revenue divided by the total number of available rooms, RPM highlights the market share of a hotel relative to its competitive set.
Singapore won several gold medals at the 2015 SEA Games, but the overall hotel performance of the country has seen a slow start to the first half of 2015. Year over year, the RevPAR index for May reported a decline of -6.7% and ADR saw a decrease of -4.7%. It will be interesting to see how the city state will manage the additional +6,000 hotel rooms in the pipeline, confirmed to open in the next couple of years.
Singapore Daily Data throughout SEA Games period (20 May 2015 - 20 June 2015) Occupancy, ADR, and RevPAR % Change
Throughout the SEA Games period, daily data for Singapore’s hotels showed YoY declines across all KPI’s during the days leading up to the games; as a result of travellers opting to postpone their travel dates. The greatest performance increases were seen in the days leading up to the opening ceremony of the SEA Games, which reported occupancy and ADR peaks on the 3rd of June at 92.3% and 311.7 SGD respectively. In addition, gains were observed throughout the entire SEA Games period of the 5th – 16th June before returning to normal levels.
Thailand not only finished at the top of the Gold Medal Tally in the SEA Games 2015, they also saw a quick recovery from lowered demand in 2014 and have maintained performance levels in spite of a devalued Ruble and reduced Russian inbound travellers. Bangkok maintained an ADR level of USD 101.27 throughout this period and thus quickly bounced back to normal overall performance levels before the end of last year – a trend that has since continued and lead the city to achieve the 8th highest RevPAR index amongst markets in the RPM comp set. Phuket was less impacted by the country’s political unrest, however has continued to see stronger occupancy than last year. May 2015, Phuket achieved the 2nd highest RevPAR Index; overtaking Yangon and seeing a rise in its occupancy rate.
Myanmar and Philippines
Myanmar’s key market, Yangon, saw a decrease in occupancy of -7.9%, however as the market maintained strong ADR levels of USD 175.8, their RevPAR index ranked 3rd best in May 2015. Just outside the podium, Manila ranked in 4th place as a result of an increasing ADR performance, reported at USD 132.80 to support their RevPAR index. The Philippines has shown an interest in hosting the 30th SEA Games in 2019, as Brunei has withdrawn their host application due to a lack of sports facilities and accomodation.
Similar to Thailand, Vietnam managed to recover from performance declines seen in 2014. Both key markets; Ho Chi Minh City and Hanoi, managed to rise up the ranks to 5th and 6th place respectively. While the performance for Ho Chi Minh City remained flat and only saw a marginally small decline of -3.6% in RevPAR. Hanoi reported the largest increase in RevPAR index within the ASEAN market, predominantly due to a strong occupancy rate of 75.8%. The Hanoi Times newspaper reported that, according to the Hanoi Department of Culture, Sports and Tourism; international inbound travel has increased by +5.0%, reaching almost 1.4 million arrivals in the first five months of 2015.
While Cambodia was able to move up the ranking and position itself in 7th place on the RPMI table, Indonesia’s main tourist destination, Bali, fell to 9th place YTD 2015 from a 6th place position YTD May 2014. Although Bali recorded a slight increase in its ADR Index, the drop in occupancy was too great for ADR to compensate. Much like Bali, Indonesia’s capital city, Jakarta, was impacted by the government legislation on austerity measures that came into effect 9 months ago. Jakarta therefore currently finds itself at 11th place in the STR Global ASEAN RPMI table. The imminent demand decline brought double-digit occupancy drops across key Indonesian markets.
Kuala Lumpur continues to struggle, and finds itself in 10th position in the RPMI table, falling behind with an occupancy of 63.5% and an ADR of USD 100.3, compared to last year’s performance; where it ranked in 5th place with an occupancy of 71.4% and an ADR of USD 116.7. With a sharp depreciation of the Malaysian Ringgit against the US Dollar and falling commodity prices; the weakened economy is proving to be a key factor in the declining KPI values.
Overall, there is an optimistic outlook according to the ASEAN table, as the announced ASEAN Economic Community (AEC) is due to be implemented this year. ASEAN is set to transform into a single market and production base which will allow for free flow of goods, services, investment, skilled labour, and free movement of capital across the region.
How does your property rank against the competition?
To visualise the shifts in performance strategies amongst your competitive set, find out more about the RPM Report from STR Global.