But the good news is that the market could stabilise as soon as next year, according to hotel consultancy Horwath HTL. It bases its optimism on the two integrated resorts (IRs) drawing plenty of visitors when they open in Marina Bay and Sentosa next year.

In the first three months of this year, occupancy fell 12per cent to 67per cent for mostly three- to five-star hotels. The crunch has already prompted a 16 per cent decline in average daily rates (ADRs) to $260.

'We are projecting a further decline for full-year 2009, but with the strengthening of the (Singdollar), the US dollar ADR remains approximately in the same range,' said Horwath HTL managing director Robert Hecker.

Hotel demand started to slip early last year, but hotels were driving their ADR growth even though occupancies were falling, he added.

Mr Hecker said the ADR was positive until last September's Formula One race, and then the situation 'caught up with Singapore. We'll see a few more months of decline'.

This decline is unavoidable, given the downturn, and the industry has basically written off this year, he added.

'It's all about 2010 and trying not to lose anything in 2009,' Mr Hecker told the Hotel Investment Conference Asia Pacific here last week.

Singapore had around 39,000 hotel rooms last year and will add 1,100 more rooms in the three- to five-star range this year and a further 20per cent next year, thanks mainly to the IRs, he said.

But the huge additional supply coming onstream concerns some analysts, given the falling tourism numbers.

Read the full story in Monday's edition of The Straits Times.