The outlook for the hospitality sector in Singapore remains uncertain this year, the managers of CDL Hospitality Trusts (CDLHT) said yesterday.
Any further slowdown in the global economy will "weigh on attendant demand for hotel rooms in Singapore", the managers added, in a statement filed with the Singapore Exchange.
Mr Vincent Yeo, chief executive of CDLHT's managers, said: "Widespread economic slowdown has resulted in weaker trading conditions in some of our markets... For 2016, we continue to maintain a cautious outlook for our portfolio hotels as a result of the macro uncertainty."
AT A GLANCE
$50.11 million (+11.1%)
NET PROPERTY INCOME
$37.81 million (-2.2%)
DISTRIBUTION PER STAPLED SECURITY
3.01 cents (-3.8%)
CDLHT yesterday reported a 3.8 per cent dip in distribution per stapled security to 3.01 cents for the fourth quarter ended Dec 31, from 3.13 cents a year earlier.
The stapled group comprises CDL Hospitality Real Estate Investment Trust and CDL Hospitality Business Trust.
Net property income for the quarter dipped 2.2 per cent to $37.81 million, from $38.65 million previously.
This came as contributions from its Maldives resorts and Singapore hotels declined owing to a soft trading environment, while Australia and New Zealand hotels recorded lower fixed rents amid local currency weakness against the Singdollar.
However, the decline was mitigated by contributions from Hilton Cambridge City Centre, acquired on Oct 1 last year, and its Japan hotels, acquired on Dec 19, 2014.
Total distribution for the quarter, after deducting working capital, came in at $29.8 million, which includes the annual variable rent of Angsana Velavaru, and nine-month income and capital distribution from the Japan hotels.
The managers added that this is a 3 per cent drop from a year earlier, and resulted in the lower distribution per stapled security.
For the full year, CDLHT posted a net property income of $137 million, down 2.5 per cent from the previous year. As a result, distribution per stapled security for the full year fell 8.4 per cent to 10.06 cents.
Despite a "healthy events calendar"- including the Singapore Airshow in February, the Food and Hotel Asia trade exhibition, the Rugby World Sevens Series in April and medical congresses in May - the managers are cautious about the outlook for the sector this year.
They said room rates are likely to remain competitive, in view of the 3,930 new rooms that are estimated to come on stream here this year. Revenue per available room for its Singapore hotels fell by 6.9 per cent to $175 last year, compared with a year ago, owing to subdued corporate travel demand.
CDLHT's managers added that the occupancy at M Hotel and Grand Copthorne Waterfront Hotel was also affected by refurbishment works. Both the renovation at Grand Copthorne Waterfront Hotel and the refurbishment works at M Hotel are expected to be completed later this year.