Singapore’s mid-market segment has strong recovery prospects post-COVID, but owners must adapt platforms to meet changing traveller demands and exercise flexibility to differentiate offerings amidst an increasingly crowded hotel market, according to JLL Hotels and Hospitality Group.

The firm's Reimagining Singapore's Mid-Market Hotels report details how the industry has experienced rapid growth since 2010, with current stock accounting for 51 per cent of the total hotel supply in Singapore.

JLL research shows room revenues have closely correlated with new supply, with mid-market sectors in Singapore showing encouraging revenue per available room (RevPAR) growth from 2016 through to 2019 as the market absorbed the new supply.

JLL Hotels and Hospitality Group Executive Vice President for Investment Sales, Adam Bury, said while pre-covid forecasting had anticipated the trend would continue into 2020, an analysis from JLL revealed occupancy rates dropped by over 13 per cent and RevPAR declined by approximately 49 per cent in the first nine months of 2020.

“The mid-market segment has strong recovery prospects post-COVID, but regardless it will be a highly competitive environment," he said.

"Smaller independent players cannot sit still, and competing on rates is not a viable solution, with the wider guest offering seen as the major differentiator going forward."

The hotel preferences of Singapore holidaymakers. 

JLL believes the mid-market segment is poised to lead the recovery in the hospitality sector, with limited new supply coming onto the market in the near-term and a "massive" growing middle-income population in the surrounding ASEAN region.

However, Mr Bury said hotel owners should consider updating their strategies regardless.

“COVID-19 has raised existential questions about the future of the mid-market hotel space, both in Singapore and across the globe," he said.

"Increasingly, we will see social and economic implications framing the business model of this sector within Singapore’s hospitality scene.

"This will force the mid-market segment to reimagine their assets, their definition of flexibility and determine the urgency to adapt."

Click here to download a copy of the report.

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