Far East Hospitality Trust reported on Friday that its distributable income for the three months to 30 September dropped 3.1 per cent to $23.45 million from for the same period a year ago.
Distribution per unit (DPU) fell 6.4 per cent to 1.32 cents from 1.41 cents for the year-ago period.
Net property income for the quarter dipped 1.2 per cent to $28.19 million from $28.52 million. Gross revenue was flat at $31.15 million, down one per cent from $31.47 million in the year-ago quarter.
Gerald Lee, chief executive officer of the Reit manager, said that while the travel and leisure industry was challenging in the last quarter, the properties managed to maintain high occupancies, registering year-on-year increases.
"The steady income from our serviced residences and commercial spaces helped to cushion the softer performance of the hotels," he said.
The Reit manager said the operating environment for the Singapore hospitality market is expected to remain challenging in the near term.
Based on the latest statistics from the Singapore Tourism Board, international visitor arrivals to Singapore decreased 3.3 per cent year-on-year for the first eight months of 2014, due mainly to the decline in Chinese arrivals which saw a contraction of 29.2 per cent for the same period year-on-year.
It said inbound international visitor arrivals over the coming months could continue to remain soft in light of the uncertain economic environment and the strong Singapore currency.
Also, more than 1,500 new rooms opened in the first nine months of 2014 and approximately 3,000 new rooms are expected to come on-stream in 2015, it added.
But Far East Hospitality Trust said it believes the longer term outlook for the tourism sector remains positive as Singapore continues to strengthen its position as the regional hub for business and as a leisure destination. The enhancement of the tourism landscape and infrastructure, such as the opening of the Singapore Sports Hub and various new attractions is expected to further improve Singapore's attractiveness for both business and leisure travelers, it said.