The downturn, due to the global economic crisis, has hit the hotel industry especially hard, with the sector's estimated revenues declining for the first time since February 2005.

STB statistics show 843,000 travellers visited the country in October, down 8.1 per cent from a year ago.

The decline was especially sharp among visitors from Indonesia, China and Malaysia, Singapore's top tourist markets. But five countries - Australia, India,Vietnam, Germany and Philippines - bucked the trend, with more visitors coming here than last year.

The STB blamed the global economic downturn for the tourism slowdown, saying it has dampened consumer sentiment and cut into discretionary spending.

Travel agents said high fuel surcharges and unfavourable exchange rates have hit markets like Indonesia hard. Chinese travellers have been hampered by restrictions on outbound visas imposed by Beijing.

The STB announced earlier that Singapore is unlikely to meet the tourism targets for 2008, which included 10.8 million visitors and $15.5 billion in spending.

For the first time in almost three years, estimated hotel revenue declined in October, compared to the same period last year. Last month, Singapore hotels raked in about $178 million in room revenues, a dip of 0.3 per cent from last October.

Average room rates rose 8 per cent from last year to reach just over $240 a night. But the average occupancy rate dropped about 7 percentage points to 82 per cent.

Hotels across the island have been forced to slash their rates, some by as much as 30 per cent.

If October was bad, November, December and beyond are not looking much better, said hoteliers.