UOB bank
December 2019
After a prolonged weakness induced by excessive supply, prospects for Singapore’s ("SG") hospitality sector have brightened amid booming tourism in ASEAN. Nonetheless, structural trends that could be headwinds for the hospitality industry are emerging.
The rise in the sharing economy in Asia amidst an evolving economic and demographic profile has led to new lodging formats and more differentiated offerings e.g. Airbnb and co-living, which could structurally disrupt traditional hotels (particularly the budget segment) and serviced apartments.
Near term impact on Singapore hotels is however expected to be limited given the crackdown on illegal lettings (<3 months for private housing) and the government's recent decision in May 2019 that short-term rental stays offered by platforms e.g. Airbnb, will remain illegal in Singapore. Meanwhile, activity in the nascent co-living segment has surged over the past 24 months.
In this report, we take a look at these trends and consider their potential impact on the traditional hospitality industry.
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