This report examines Singapore’s intense rivalry with Hong Kong, two key Asian hotel markets that are both competing for supremacy post-pandemic.
Singapore is currently in the lead, with occupancy rates above 83% by early 2024. This will allow it to host major global events. Hong Kong faces challenges with a slowing luxury market and changing visitor habits. Singapore’s daily average hotel rates have risen to $314, while Hong Kong is preparing for the grand opening in 2025 of its new stadium.
Singapore reached a long-awaited landmark in 2019, just before the pandemic. It surpassed Hong Kong’s revenue per available room. Singapore has recovered strongly from a slight decline in occupancy between 2023 and 2019. Singapore now has the highest occupancy rate in the Asia Pacific region as of April 2024.
In March 2024, occupancy rates reached 83.8%. That’s just a bit below the 84.3% that was recorded in the same period in 2019. This growth was driven by increased rates, an influx in international tourists, as well as major events, such Coldplay and Taylor Swift concert, which have significantly boosted this sector.
Singapore’s ability in attracting large international events is one of its main strengths. This is especially true in comparison to Hong Kong which has yet to complete its new 50,000 seat stadium, scheduled to open in 2025. The main difference between the two destinations is how they operate. In Singapore, luxury hotel occupancy and rates have reached record highs. RevPAR in luxury hotels reached a staggering US$282, with data for March 2020 suggesting that this trend will continue.
Hong Kong presents a very different picture. Hong Kong’s high-end hotels have struggled with occupancy rates that are in the 70s, which is significantly lower than 87% for High Tariff B Hotels or 88% for Medium Tariff Hotels.
This shift highlights an increasing trend of budget conscious visitors, influenced largely by the strong Hong Kong Dollar which is pegged with the US Dollar. Hong Kong is less attractive to tourists as a result.
Hong Kong has a wide range of average daily rates. High Tariff A Hotel ADRs are US$309 while High Tariff A Hotel B ADRs are US$144 and Medium Tariff hotels ADRs are US$97. In the luxury sector, where ADRs surpass US$385, occupancies range from 45% – 70%, although certain operators have managed high room rates. Hong Kong is concerned about the decline in visitor spending as it works to revitalize the tourism, retail and hospitality industries.
Outbound travel from Hong Kong has also increased, returning to levels seen before the pandemic. This is due to improved accessibility in the Guangdong, Hong Kong, Macau Greater Bay Area as well as weaker currencies at destinations such Japan and mainland China where Hong Kong Dollars are more valuable. Hong Kong is also becoming more expensive for tourists.
Hong Kong has an ADR in the US$204 range and an occupancy rate of 73%. Singapore, by contrast, has an ADR of US$314 and an occupancy rate of 77%. Dubai, London Mumbai and Sydney are also key markets that reported occupancy rates of around 80% for the quarter.
ADR is a key metric for cities such as Paris ($309), New York ($231), and Dubai ($226). Singapore and Hong Kong can improve their rates and occupancy. However, the challenge remains attracting more high-spending visitors while balancing the attention between Mainland Chinese and foreign tourists.
Experts in the industry provided their insight on these developments. Kevin Croley, Senior vice president of development at Pan Pacific Hotels Group expressed confidence in Singapore’s luxury sector. “The luxury industry in Singapore is doing well. We remain optimistic for the future, and are currently building another property on Orchard Road.
Dan Voellm is the CEO and Founder at AP Hospitality Advisors. He noted that Hong Kong faces many challenges. “The luxury sector has been sluggish in recent months. Hong Kong is now more expensive for visitors due to the currency peg with the US Dollar. He added that he is hopeful for 2025 because of the efforts made by local government to attract visitors and create events.
The shortage of labour is a major issue for both destinations. This is especially true in Singapore where it’s difficult to attract young talent into the hospitality industry in the post COVID environment. This has led some visitors to be dissatisfied, as they feel that the hotel’s customer service is not up to par with the high prices.
The future of the hotel market in Singapore and Hong Kong is cautiously optimistic. Both cities are experiencing a growth in RevPAR fueled by international travel and strategic hosting of events. This growth, however could be hampered by global economic uncertainty and geopolitical issues.
Singapore’s strong momentum is a result of its record occupancy levels. It is a regional leader. Hong Kong, on the other hand, must revitalize its luxury sector and cater to budget-conscious tourists while also rejuvenating their luxury sector. Both markets can grow as flight capacity returns to pre-pandemic levels. However, navigating economic uncertainty will be key to long-term success.
