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ACCOMMODATING THE SHARING REVOLUTION:
A QUALITATIVE EVALUATION OF THE IMPACT
OF AIRBNB ON SINGAPORE’S BUDGET HOTELS
ABSTRACT
Guttentag (2013) has proposed the view that Airbnb properties compete
directly with budget hotels because of their comparably low cost and the present
paper assesses the applicability of this hypothesis in the Singapore context.
Interviews were conducted with representatives from economy/mid-tier hotels and
hostels which account for over 10 percent of Singapore’s hotel room stock and with
Airbnb. The researchers draw upon these key informant views to propose an
Accommodation Price and Capacity Matrix (APCM) as a theory-based mapping of
Airbnb’s offerings within the context of Singapore’s accommodation landscape. It is
concluded that although Airbnb should not yet be considered as a direct competitor
for Singapore’s budget hotels, it will pose a growing threat through the near to
medium term. The paper concludes with recommendations about how Singapore’s
home rental market should be best regulated.
KEYWORDS: Disruptive innovation, home rental, sharing economy, Airbnb in
Singapore.
INTRODUCTION:
The rise of the so-called sharing economy has been emblematic of huge
disruptions to the process of transacting goods and services. With the support of
various technology-based applications, those participating in the sharing economy
have an opportunity to enhance consumer access and to mitigate the progressive
commodification of assets. Home rental companies such as Airbnb have exploited the
twin opportunities of unutilised home assets and a consumer need for diversified
accommodation options, to produce exponential growthof business and revenues.
From the buyer and seller perspectives within the sharing economy, exchanging
information about available goods and services has led to an optimisation of assets
and to the extension of available options. Benefits have included the facilitation of
entrepreneurship, supplementation of incomes and widening of choice. However,
these developments have been accompanied by feelings of threat or disruption
amongst industry incumbents that are impacted by the sharing economy.
Widely described as the most disruptive tourism innovation of recent times,
Airbnb successfully entered the world of commercial accommodation provision in
2008, growing exponentially in room nights booked and revenues achieved. Over the
2010-2015 period the respective growth figures were 105 and 115 times increase
(Piper Jaffray, 2015). Due to the low prices charged to travellers, it has been observed
that Airbnb’s offerings compete directly with one and two-star hotels (Guttentag,
2013). Meanwhile Airbnb has a competitive edge - providing guests with “localised
experiences” by staying in local residences (Gunasekaran & Anandkumar, 2012).
Despite such achieved and potential growth, Airbnb remains widely unregulated
including in Singapore. Confronted by the rise of Airbnb, incumbent accommodation
providers are fighting back by demanding regulatory intervention by the local
governments. This approach resembles the reaction of those protesting against Uber -
another major player in the sharing economy.
This paper presents a qualitative validation of the proposition that the entry of
Airbnb into the Singapore marketplace has stimulated direct price competition for the
most vulnerable sector, namely budget hotels. As a prelude to explaining the
applicable benchmarks, it is worth noting that Singapore’s hotel classification system
consists of four-tiers – luxury, upscale, mid-tier and economy. For the purposes of the
present investigation, budget hotels refer to those in the lower two categories – mid-
tier and economy hotels. The study of the impact of Airbnb on Singapore’s budget
hotels contributes to knowledge because it a microcosm of what is happening
globally. The researchers obtained industry feedback that is relevant to other
governments and to regulatory and tourism authorities about the prospect of Airbnb’s
prospective integration on Singapore’s budget hotels. This may prompt hotel
operators to study Airbnb’s competitive options and how to differentiate with a view
to ensuring their survival. The two major data sources for this research are i) semi-
structured interviews with representatives of selected mid-tier and economy hotels
(including hostels) in Singapore, and ii) the Singapore-based representative at
Airbnb’s Asia headquarters.
LITERATURE REVIEW:
The sharing economy and collaborative consumption
Airbnb’s success epitomizes the ”sharing economy”, a term commonly applied
to the sharing of goods and services on a peer-to-peer basis. The “sharing economy” is
a later incarnation of the term "collaborative consumption", which was first proposed
in the paper “Community Structure and Collaborative Consumption: A routine
activity approach" (Spaeth, 1978). Over three decades later (in 2011), TIME magazine
celebrated “collaborative consumption” as one of 10 ideas that would change the
world. One of the reasons could be the prospects of a more environmentally friendly
world, where “collaborative consumption” could “reshape those forces (of
consumerism) to create healthier, more sustainable system with a more fulfilling goal
than ‘more stuff’” (Botsman & Rogers, 2010). Critics have however challenged the
term “sharing economy” as being a misnomer, on the basis that engaging in
commercial transactions between two individuals who are unacquainted through
facilitation by a commercial entity, is not a genuine example of “sharing”. The term
“access economy” has been proposed as an alternative, noting that the behaviours
describe individuals who purchase access to goods and services from another (Bardhi,
2015). This phenomenon of increased consumption via “sharing” or facilitated access
has nonetheless led to predictions of the rise of “dependent contractors”, a new and
expanding group of workers that straddles between the “employee” and “independent
contractor” categories, and are often unprotected by labour laws (Sundararajan, 2016).
The ideological positions on the “sharing economy” that have been adopted by
governments have also been questioned, including the “implicit assumption that the
collaborative economy is good” (Dredge, 2016). Others have viewed the “sharing
economy” as an urban phenomenon, observing that “the platforms that enable sharing
leverage or confront conditions of density, proximity, specialization, and even
anonymity that mark city life” (Davidson & Infranca, 2016).
Impact of Airbnb on the hotel industry
While Airbnb participates in the “sharing economy”, the applicable business
model has often been characterised as a form of “disruptive innovation”. Created and
popularised by Christensen, the term refers to innovations that create new markets and
value networks while disrupting existing ones. In the process they compete directly
with and eventually displace industry incumbents. In the case of Airbnb, empirical
studies have shown that its offerings of shared and private rooms constitute direct
price competitors with one and two-star hotels (Guttentag, 2013).
Substantial academic research has already been undertaken about home rental
companies such as Airbnb. A relevant paper for the purposes of the present study is
The Sharing Economy Checks in: An Analysis of Airbnb in the US by CBRE Hotels’
Americas Research (Lane & Woodworth, 2016). CBRE (CB Richard Ellis) Hotels is a
specialised advisory group within the CBRE Group (a Fortune 500 commercial real
estate company listed on the New York Stock Exchange) that provides brokerage,
valuation, consulting, research and capital market services to companies in the hotel
industry. In particular, CBRE Hotels’ Americas Research is a research firm that
specialises in analysing and reporting on both the historical and future performance of
the accommodation industry. The researchers examined the impact of Airbnb on the
established US hotel accommodation sector. The researchers predicted that US hotel
ADRs were unlikely to repeat the recent high growth rates due to the continued
increase in supply and Airbnb competition. It may be anticipated that the same
reasons will prompt a deceleration in hotel construction.
Being a relatively new phenomenon, research on Airbnb and the home rental
business are largely recent and growing from a comparatively small base. Confining
the search to only those where the stated key words appear in the title of the articles, a
list of eight articles was generated on Google Scholar on 7 Feb 2017. Of the eight
articles, only three were primarily focused on the impact of Airbnb on a geographical
locality’s hotel industry – see Table 1.
Table 1: List of research articles on impact of Airbnb on a region/city’s hotel industry
Article/Author Publication/
Author/Year
Nature of
Research
Outcome of Research
1.The rise of
the sharing
economy:
Estimating the
impact of
Airbnb on the
hotel industry
Journal of
Marketing
Research/
Zervas,
Proserpio &
Byers/ 2014
Quantitative Impact of Airbnb in Austin
(US) is not uniform, with
lower-priced hotels and those
hotels not catering to business
travellers being the most
affected. The impact
manifests itself primarily
through less aggressive hotel
room pricing, an impact that
benefits all consumers.
2.Estimating
the impact of
Airbnb on
hotels in
Toronto
DSpace@MIT,
Massachusetts
Institute of
Technology/
Mohamad/2016
Quantitative;
Empirical
study using
time series
regression
analysis.
That in Toronto, Airbnb
growth has a statistically
significant negative impact
on midscale class hotels, a
statistically insignificant
impact on the number of
luxury, upper upscale and
economy class hotel room
nights sold whereas upscale
and upper midscale class
hotels are positively
impacted.
3.Battle of the
Beds: The
economic
impact of
Airbnb on the
hotel industry
in Chicago
and San
Francisco
Scholarship@
Claremont,
Claremont
Colleges/
Goree/2016
Quantitative;
Regression
analysis
That Airbnb has an
insignificant impact on San
Francisco hotel occupancy
rates, and a marginally
significant negative impact
on Chicago hotel occupancy
rates. Business travellers are
not substituting Airbnb for
hotel accommodation because
of Airbnb’s lack of amenities
that many business travellers
demand, and the absence of
an Airbnb loyalty program.
The findings from the above three quantitative studies are varied and at best
inconclusive when viewed in totality. For example, Guttentag’s (2013) earlier
hypothesis that Airbnb properties compete directly with budget hotels because of their
equally low cost is supported by findings from the Austin case above (Zervas,
Proserpio & Byers 2014), but not by a similar study on Toronto (Mohamad, 2016).
The latter paper also concluded that “a more qualitative study would address the
actions taken by hotel chains and specific brands to protect their market share from
Airbnb” (Mohamad, 2016).
It is obvious that scholarly research on the impact of Airbnb on the hotel
industry remains at its infancy and more time and resources are required for further
research development. While it is inconclusive whether Airbnb and the home rental
business “merely complements hotels by attracting a different type of tourist”
(Lawler, 2012), “it does appear that the traditional accommodation sector is beginning
to recognise the threat posed by Airbnb” (Guttentag, 2013). All these appear to
suggest that there is an urgent need for a competitive mapping of the space occupied
by the various hotel categories and Airbnb, due to the inability of quantitative
research thus far to agree on Airbnb’s exact impact on the hotel industry in general.
There has already been studies conducted by using the Blue Ocean Strategy (BOS)
(Kim & Mauborgne, 2004) to review the space that hotels are currently occupying in
the larger accommodation landscape. For example, Yang (2012) examined the hotel
industry in Taiwan using the BOS lens, and proposed that Taiwanese “hoteliers
should integrate a demand-based pricing strategy with a supply-based product-
development strategy” so as to “strengthen their competitive positions in the
marketplace of international tourist hotels in Taiwan” (Yang, 2012). An extension of
this, through the mapping of the space occupied by both players in the hotel industry
and Airbnb, would be timely.
On regulations
In addressing the growing pressure to regulate the sharing economy, various
cities (notably Amsterdam) have enacted legislation to govern Airbnb operations.
Amsterdam allows residents to lease out their properties for a maximum of two
months per year, for up to four persons each time (Coldwell, 2014). In Paris, a bill has
been passed allowing short-term rentals of primary residences. Meanwhile in Berlin, a
new housing law enacted on 1 May 2016 prohibits owners and tenants from renting
out more than half the floor space in their apartments for short term rentals, due to the
shortage of housing and rising rents across the city. In Asia, Airbnb remains largely
un-regulated, including in Japan – Airbnb’s top Asian growth market. As reported by
Bloomberg, Japan announced (in April 2016) that it would impose a minimum stay of
seven days (Nakamura & Takahashi, 2016) on home-rentals (minpaku 民 泊 in
Japanese). A month later, the same media outlet anticipated that the Japanese Cabinet
would approve a deregulation plan for home rentals by late May 2016. This was
prompted by a severe shortage of hotel rooms across Japan as a result of a surge in
visitor arrivals, and that the Bill might be submitted to the Diet by 2017 (Chu, 2016).
In Singapore, where short-term leasing of less than six months is considered illegal,
the Urban Redevelopment Authority (URA) launched a public survey in January 2015
seeking views from the public on home rental-related issues. In February 2017, a new
law was enacted that made it illegal for private home owners to rent out entire
apartments and rooms for less than six months without permission from the Singapore
Urban Redevelopment Authority (URA). There was however a “silver lining” for
home rental companies - while announcing the new law banning short term rentals,
Minister for National Development Lawrence Wong also revealed in Parliament that
“URA is studying the option of creating a new category of private homes that will be
allowed for short-term rentals”, with possibly a shorter rental period compared to the
current minimum of six months (Toh, 2017).
RESEARCH METHODS AND SAMPLING:
In seeking to present comparable data that are applicable to the research
setting , the authors deployed the price points applicable to economy-tier hotels in
Singapore and to Airbnb’s Singapore listings. A total of about 6,000 Singapore
properties was identified on the Airbnb website listing. The researchers evaluated
Airbnb’s average published rates and have presented these in Table 2. Since the
Average Length of Stay (ALOS) for visitors in Singapore in 2014 was 3.7 days, a
search was undertaken on the basis of a stay of 4 days.
Table 2: Airbnb’s Singapore Listings – Average Published Rates for selected periods
Period Average Published
Rate
(Shared Room)
Average Published
Rate
(Private Room)
Average Published
Rate
(Entire Homes)
9 Dec (Fri) – 12
Dec 16 (Mon)
[non-holiday
period]
S$55 S$90 $229
23 Dec (Fri) –
26 Dec 16
(Mon)
[Christmas
holidays]
S$47 S$87 $240
The researchers assumed that Airbnb’s average published rates were relatively
stable across non-holiday and holiday periods. It is notable that the average published
rates of Airbnb Singapore’s private rooms (S$90) are equivalent to their economy-tier
hotel equivalents, where the Average Room Rate (ARR) was S$105 as of end 2015. A
third assumption was that the average published rates of Airbnb Singapore’s shared
rooms at S$55 competes with hostel beds, where daily rates can range from as low as
$20 at Betel Box Backpackers Hostel (located 6km from the city centre), to S$50 at
Adler Luxury Hostel (located in the heart of Chinatown Singapore). Fourthly, the
average published rates of Airbnb Singapore’s entire homes at $229 is priced higher
than the ARR for mid-tier hotels at $174 as of end 2015.
In-depth interviews were conducted with respondents representing 10 hotels
and hostels – four were mid-tier hoteliers, and three each were representatives or
General Managers of economy hotels and hostels – see Table 3. To ensure adequate
representation of the wider population, the researchers selected hotel operators that
represent Singapore’s largest (Hotel 81 Group) and second largest (Fragrance Group)
economy-tier hotel chains plus the largest provider of hostel beds (5footway.inn).
Smaller hotel and hostel players were also included with a view to ensuring that the
views expressed were not confined exclusive to those of the larger chains. The
researchers set out to achieve equal distribution of the 60,908 hotel rooms (as of end
2015) across Singapore’s four hotel categories (the Singapore Tourism Board does
not provide a detailed breakdown of hotel rooms by category of hotel). The
interviewees (excluding hostel operators) were collectively responsible for 6,633
rooms and represent about 22% of Singapore’s mid-tier and economy hotel room
stock categories. Based on the same assumptions, the total hotel rooms owned by
Hotel 81 Group and Fragrance Group account for over 25% of Singapore’s total
economy hotel room stock. The 11th interview was conducted with Airbnb’s Asia
headquarters’ representative in Singapore. The researchers wished to extract essential
information from the interviews and the focus was on the hoteliers and hostel
operators’ views about i) competition in general (extending to demand and supply
factors), ii) perceived Airbnb competition (if any), and iii) the regulation of
Singapore’s home rental market. Information from these interview responses was also
extracted in order to map out the space occupied by Airbnb in Singapore’s existing
accommodation landscape. This aspect will be covered in a later section of the paper.
In-depth interviewing has been deemed appropriate because the respondent
profiles and research purpose allows specific issues to be teased out. It also draws
upon and leverages the experience of these senior industry leaders and their
perspectives on the various issues. All the interviews were conducted in Singapore
over a period of six months, from April to October 2016. Of the 10 interviews with
hoteliers and hostel operators, six were held within the hotel/hostel compounds, while
the rest were conducted through email interviews which were followed up with face-
to-face meetings for response verifications. The set of guiding questions used for the
interviews is at Annex A. The 11th interview with Airbnb Asia Pacific’s representative
was held in Airbnb’s Singapore office, and the set of guiding questions used is at
Annex B. On average, each of the face-to-face interview took between 30 to 45
minutes.
Table 3: Interview list of hotels/hostels
Hotel/Hostel Category Number of
rooms/beds
Designation of
respondent
Hotel
Chancellor@Orchard
Mid-tier 488 rooms Hotel Manager
Hotel Grand Central Mid-tier 262 rooms Hotel Manager
Hotel Boss Mid-tier 1,500 rooms Senior Director of
Sales
Parc Sovereign Hotels Mid-tier/ 2 hotels
across Singapore
442 rooms Senior Manager
Aqueen Hotels & Resorts Economy/ 5 hotels
across Singapore
400 rooms General Manager
Fragrance Hotels Economy/ 21 hotels
across Singapore
1541 rooms Senior Manager
Hotel 81 Group Economy/ 24 hotels
across Singapore
About 2000
rooms
Senior Director of
Sales
Adler Luxury Hostel Hostel in Chinatown
(Central region)
91 beds General Manager
Betel Box Backpackers
Hostel
Hostel in Joo Chiat
(Eastern region)
60 beds Director
5footway.inn Hostels Hostel/ 5 hostels
across Singapore
1000 beds Founder
To ensure that the respondents were at ease, a conversational semi-structured
interview format was adopted, without any audio recordings. This approach may be
deemed as helpful for allowing respondents to open up and to share their true opinions
and feelings about the topic at hand. In terms of recording, the focus was on
understanding the respondent attitudes and reactions in describing their opinions, and
not on generating voluminous near-verbatim information for analysis on completion
of the interviews. Since data analysis is an ongoing process in qualitative research,
data analysis was undertaken concurrently with the data collection. While a set of
guiding questions was used, the focus was on the three main clusters of enquiry – on
competition, regulations, and views about the general impact of Airbnb. Key themes
in terms of the respondent reactions were clustered during interviews, and serve as the
objects for subsequent analysis.
RESEARCH FINDINGS:
Two main clusters of response emerged - on competition within the industry
(Table 4), and on industry regulations.
On Competition
Despite the wide diversity of views from respondents representing 10 hotels
and hostels, it was widely shared that there is and will be increasing competition
within the sector. This was unsurprising, since quarterly surveys conducted by the
Singapore Hotel Association (SHA) have shown that 95% of the respondents cited
increased competition as the main business challenge facing hoteliers in 2016.
Table 4: Reasons Cited for Increased Competition
Reasons Cited by/ Number of hotel/hostel
represented
1. Huge influx of new mid-tier and
economy hotels in 2015
9
2. Price War amongst economy hotels 6
3. Rising Manpower and rental costs 4
4. Competition from Airbnb 3
As is shown in Table 4, representatives of nine hotels/hostels interviewed (out
of a total of ten) indicated that the recent spike in Singapore’s room supply was
largely attributable to the entry of new mid-tier and economy hotels, thereby causing
downward pressure on ARR for existing operators in the same hotel category. A
similar perspective was prevalent in a HVS poll from early 20161, where respondents
attributed the projected decline in Singapore’s hotel market performance to the
substantially increased provision of economy hotel rooms. The impact of increased
competition on economy hotels can also be observed through the latter’s deteriorating
Average Occupancy Rates (AOR) since 2013. The rate slid below 80% in 2015 while
the rest of the other three tiers enjoyed AORs above 85% (see Annexes C to E). Mid-
tier hotels are similarly affected, with the largest ARR percentage decline (-5.6%) in
2015 impacting on this grouping across all hotel categories. Three interviewees
attributed this phenomenon to the lower entry barriers for mid-tier and economy
hotels and hostels, resulting in what some consider to be an oversupply of rooms and
beds in these categories. Six of the interviewees suggested that a “price war” is
occurring amongst mid-tier and economy hotels. They cited the newly opened 1,500-
room Hotel Boss (mid-tier) offering rooms at ARR of $90, lower than most of its
competitors, despite its city centre location and new facilities. Anecdotally, hostel
beds that once commanded more than $100 a night at prime locations are now 50%
off the peak. One of the hostel operators indicated that price adjustment is probably
their only strategy to ensure relevance within the market, and the maintenance of a
healthy AOR.
Four interviewees highlighted that profit margins are eroding along with a
decline in revenues, especially in the case of rising rentals and manpower costs. Some
hostel operators lamented the rising cost of maintaining their properties in Singapore,
while envying Airbnb’s asset-light modus operandi. It is in this context that one hostel
operator commented that owning and operating standalone hotels is making
increasingly less commercial sense due to the lack of economies of scale. Others
complained about the increasing costs of recruiting manpower. It is notable that Adler
Luxury Hostel deploys just one front desk officer to manage check-ins and also
breakfast and other services at the lobby. Aqueen Hotels and Resorts have reduced
their headcount but increased the base salary for all staff, thereby providing
motivation and incentives for multi-tasking. Front desk officers might for example
double up as security personnel. Even with increased compensation, hotels are
experiencing hiring difficulties, especially for housekeepers. One interviewee
revealed that when Marina Bay Sands (MBS) hotel opened in 2010, the industry
struggled to recruit chambermaids because many left to join the 2,561-room property.
A single hostel interviewee felt that Airbnb poses direct and immediate
competition for their business. Two of the hostel operators list their beds on Airbnb,
1 Hotel advisory group HVS conducted the survey in early 2016 to seek views from hotel industry
professionals on Singapore’s hotel market performance for the year.
and thereby view Airbnb as a collaborator rather than a competitor. In the case of the
two hostel operators that collaborate with Airbnb, the associated revenues have been
insignificant, leading to their preliminary conclusions that Airbnb consumers are
generally uninterested in hostel options, and that their hostel customers are not active
Airbnb users. In the case of the mid-tier and economy hotel interviewees, none
viewed Airbnb as a direct current competitor though all were concerned about a
prospective glut of rooms, considering the huge supply of residential units in
Singapore. It is worth noting that all hotelier interviewees viewed the biggest
immediate threat as competition from other Singapore mid-tier and economy hotels.
There were three main explanations: firstly, that Airbnb transaction volumes are
currently insignificant compared with total hotel revenues; secondly, that Airbnb
competes more directly with serviced apartments, and thirdly that Airbnb property
ARRs are not necessarily lower than those prevalent amongst mid-tier and economy
hotels. This suggests that not all Airbnb offerings compete directly on price with mid-
tier and economy hotels.
Two of the hotel operators believed that the entry of Airbnb has generated new
markets and has thus expanded the tourism economy for the benefit of all industry
players, by attracting the budget conscious family segment who would have otherwise
found Singapore too expensive. For example, cost would have been an issue for a
travel group of six as it would require three hotel rooms if home rental options were
unavailable. A few of the hotel operators observed that the tourism economy has not
expanded for them, despite increasing aggregate arrivals over recent years. Firstly, the
modest increase of 0.9% in visitor arrivals in 2015 was a lot less than the 6.5%
increase in hotel room supply for the same year2. Secondly, despite increasing
visitation from Singapore’s two largest source markets - Indonesia and China, many
Indonesians were VFRs (visiting friends and relatives) and do not require
accommodation. Equally an increasing number of Chinese were staying in Johor after
spending the day in Singapore. Johor is the southernmost state of peninsular
Malaysia; a short 30-minute drive from Singapore’s northernmost town - Woodlands.
This allows them to capitalise on the lower prevailing hotel rates in Johor. Thirdly,
average lengths of stay continued to decrease, registering 3.61 days for 2015, a 2.7%
decrease year-on-year.
Regulatory Environment
All interviewees agreed that regulations are needed to guide Singapore’s
currently unregulated home rental market. Drawing upon the feedback that was
obtained by multiple respondents about the regulation of home rentals in Singapore,
the following six recommendations arise:-
1. New legislation that allows 3rd party management companies to transact on
behalf of home owners and tenants. This would also require the new
legislation to provide a clear indication that it is illegal for home owners
and tenants to transact directly. This arrangement has clear benefits,
including the fact that 3rd party management companies can manage rentals
for many individual owners, and would be held accountable by the local
authorities in terms of tax payment and other regulations. It would also be
2 According to hotel stascs provided by the Singapore Tourism Board, there were 60,908 hotel
rooms as at end 2015, an increase of 3,736 hotel rooms (6.5%) from the 57,172 hotel rooms as at end
2014.
easier for the authorities as they would only need to deal with a handful of
management companies.
2. Non-owner tenants should not be allowed to engage in further subletting of
their accommodation. One interviewee noted the prevalence of this
practice in Singapore, with some apartments converted into hostel-like
accommodation. Some expatriates also lease out their homes to generate
extra income.
3. Employers of foreign domestic workers (FDWs) should be reminded of the
penalties applicable to the illegal deployment of FDWs. One the
interviewees highlighted the practice of deploying FDWs as chambermaids
by employers who have converted their homes into hostel-like
accommodation, or are renting out multiple apartments. The deployment of
FDW for commercial purposes is in clear contravention of the
Employment of Foreign Manpower Act.
4. Require Airbnb homeowners to comply with standard safety requirements,
eg. maintain guest register, install CCTV cameras etc. Some of the
interviewees felt that safety shouldn’t be a major concern, as both the
home owners and potential tenants get to view each other’s background
profile and transaction history before agreeing to the transaction. Others
however felt that it presents a major risk for Singapore’s image in general,
as all it takes is one major safety lapse to tarnish Singapore’s reputation as
a safe city.
5. Fix the number of days in a year that owners can rent out their homes. This
would be similar to regulations instituted in Amsterdam and Paris, as
outlined earlier.
6. Level the playing field for all. Unlike the home rental market which is
unregulated, service apartment operators are bound by the requirement of
only accepting guests who are staying for at least 7 nights. For hostel
operators, they need to adhere to the regulation of having at least six beds
in a room, making it impossible to offer guests who wish to have a single
or twin-bed room.
Most hotel and hostel interviewees concluded that an open society and
economy like Singapore should continue with its policy of open competition without
overly cumbersome regulation preventing the entry of new players, especially in the
case of innovative ones who provide more options for all. Some respondents felt that
hotel industry players have become accustomed to high AOR and RevPar over many
years, and should now re-think their value proposition in the face of new competition.
However, none agreed with the current state of non-regulation for the home rental
market, and all urged prompt action to ensure fair competition for all.
Views from Airbnb Singapore’s representative
Against the waves of protest by hoteliers to regulate and restrict Airbnb and
other home rental companies, Airbnb has invested significantly to lobby for local
governments’ support by leveraging on widespread consumer acceptance (Rauch &
Schleicher, 2015). It is in this larger context that Airbnb’s representative in Singapore
pointed out that home rentals are not really a new concept. This long established
practice became “disruptive” only recently because technology and the internet has
allowed it to have scale and to create new markets while competing with existing
ones. The main views expressed by Airbnb’s representative in Singapore are
summarised as follows:-
On direct competition with mid-tier and economy hotels and hostels.
Similar to the hoteliers interviewed earlier, the Airbnb representative does not
view the company as a direct competitor to the likes of Hotel 81 Group (Singapore’s
largest economy hotel chain) and Fragrance Group (Singapore’s second largest
economy hotel chain). While the hoteliers had arrived at this perspective because of
price, Airbnb explained it from a role perspective. Airbnb clarified that it is not a hotel
chain, and it does not own any hotels. The accommodation revenue flows directly to
home owners, with Airbnb earning commission from the transactions. In other words,
Airbnb provides a platform to facilitate transactions between owners and visitors.
On the potential threat of alternative accommodation
Airbnb’s Singapore representative noted that there should be sufficient
business for everyone because of the rapid growth of tourism. The representative
described Airbnb as filling a demand gap, namely the budget conscious family
segment. The value proposition involves providing the right product at the right price
point, and the experience of staying in a local neighbourhood. The representative
added that Airbnb and economy hotels in Singapore have differing value propositions,
and distinct clienteles.
On regulations.
The Airbnb representative explained that the organisation is keen and ready to
operate within a fair regulatory framework. He added that the company would adhere
to any new Singapore home rental legislation, whether this involves restricting listings
to owners of primary residences, or prohibiting listings by the owners of multiple
homes. Other claimed benefits of the new legislation included terminating current
improper practices like having FDWs work as chambermaids for their owners, illegal
subletting, and the reduction of hotel construction in the longer term.
DISCUSSION:
On Competing with Airbnb
With the exception of one interviewee, all others did not perceive Airbnb as a
current direct competitor to Singapore’s mid-tier and economy hotels and hostels.
This point was particularly emphasised by representatives from Singapore’s two
largest economy hotel chains – Hotel 81 Group and Fragrance Group - which
collectively own around 3,500 rooms, or almost 6% of the 60,908 hotel rooms as of
end 20153. This supports the findings of a previous Toronto-based study, which
suggested that Airbnb has a statistically insignificant impact on the number of
economy class hotel room nights sold (Mohamad, 2016). Instead, these Singapore
economy hoteliers view other hotels in the same category as their main competitors.
The rationale that was followed by the hostel player that viewed Airbnb as an
immediate competitor was not based on concrete evidence but on his assessment that
3 Assuming equal distribuon of 60,908 rooms across the four hotel categories, there would be 15,000
or so economy hotel rooms in Singapore. The 3,800 rooms owned by Hotel 81 Group and Fragrance
Group would represent a signi/cant 25% of the total economy hotel room stock in Singapore.
an unregulated Airbnb that is able to leverage on a huge inventory of private
residential accommodation should be considered as a serious competing force. The
latter point was also acknowledged by other hoteliers interviewed, though they
generally suggested that any Airbnb threat would only materialise in the future.
Equally they acknowledged that the future threat could be significant, as there is a
tremendous supply of private housing that could be converted into home rentals,
especially if Airbnb is eventually legalised. Furthermore, Airbnb is no longer the only
home rental company that is operating in Singapore. Others have rapidly appeared,
such as Panda Bed and Roomorama and these have already attracted a portion of the
home rental market in competition with Airbnb.
From the Airbnb interviewee’s perspective however, he disagreed that Airbnb
is a direct competitor to Singapore’s budget hotels and hostels, and noted that Airbnb
does not own any hotels or hostels. He extended the argument by observing that the
associated accommodation revenues flow directly to home owners, with Airbnb
merely earning commission from the transactions that occur through its platform.
Some respondents observed that this Airbnb positioning is a loophole, since home
owners are able to compete directly with Singapore’s budget hotels and hostels as a
result of facilitation by Airbnb (and other home rental businesses). Through the
capacity that it extends to home owners to list and reach out to anyone with an
internet connection, it is unsurprising that hoteliers will perceive Airbnb (and other
home rental companies) as the “competitor”.
On collaborating with Airbnb
There appears to be some opportunity for collaboration, as two of the hostel
operators interviewed indicated that they do list their hostels on Airbnb. However, it
was pointed out that at the time of the interviews most clients are not booking through
Airbnb. It is assessed that with Airbnb’s increasing popularity and the likelihood of
home rental businesses being legalised in Singapore in the near future (this is
discussed in the following section), the possibility of an increased collaborator role for
Airbnb with respect to hostels and budget hotels cannot be eliminated. While Airbnb
facilitates competition between home owners and hotels and hostels, its platform has
the capacity to host listings by the latter, especially if Airbnb is eventually legalised.
There were views on Airbnb’s collaborative role in expanding the tourism
economy for the benefit of all industry players. This was highlighted by two of the
hotel operators They noted that the entry of Airbnb has generated new markets by
attracting the budget conscious family segment who would have otherwise have found
Singapore too expensive. In other words, there is a growth opportunity to expand
Singapore’s tourism economy by attracting the budget family segment. For such
groups, renting an apartment for a traveling entourage of say six persons would be
more price effective than booking three hotel rooms. This is supported by Guttentag
(2013)’s finding that “median Airbnb rates for an entire home/apartment are generally
less than those of four and five-star hotels”, and yet Airbnb full apartments “provide
various benefits that come from staying in a residence” (Guttentag, 2013).
On regulating Airbnb
Taking account of the Singapore government’s belief in fair competition and
advocacy of extended consumer options, it is probable that Airbnb and other home
rental businesses will be legalised in Singapore in the near future. This is despite the
February 2017 law which has made it illegal for private home owners to rent out
entire apartments and rooms for less than six months (including those listed on
Airbnb), without permission from the Singapore Urban Redevelopment Authority
(URA). In announcing the law, Minister for National Development Lawrence Wong
revealed in Parliament that “URA is studying the option of creating a new category of
private homes that will be allowed for short-term rentals”, with possibly a shorter
rental period compared to the current minimum of six months (Toh, 2017). All hotel
and hostel interviewees argued the need for a more “level playing field” because of
the currently unregulated state of the Singapore home rental business, relative to
hotels and hostels. It would appear that the new law is a direct response to these
concerns, with the concurrent indication that home rentals would be legalised soon in
the event that appropriate conditions are met.
At the present juncture it is uncertain whether the new URA legislation will
allow 3rd party management companies to transact on behalf of home owners and
tenants, as suggested by one interviewee. While it is cumbersome for home owners
and tenants to go through a “middleman” instead of transacting directly, this
arrangement has clear benefits, especially in terms of accountability with regards to
tax payment and other regulations. It would also be easier for the authorities as they
would only need to deal with a handful of management companies.
On mapping Airbnb within Singapore’s accommodation landscape
Prior to the enaction of the new law that bans short-term home rentals,
Singapore-based Airbnb properties appeared to operate in relatively uncontested
“Blue Ocean” market space. This is because of regulations prohibiting the rental of
public flats, the minimum period of six-month rental requirement for private housing
and the minimum seven-day stay requirement for service apartments. Taking account
of interviewee perceptions about competition, price and value propositions, the
researchers have proposed a matrix with two variables to present the space that is
occupied by the various accommodation players. The respective variables are –
accommodation capacity (on the x-axis, referring to the number of persons that can be
accommodated in a single accommodation unit) and price point (on the y-axis).
Price
Luxury Hotels
Upscale Hotels
[4/5-star hotel segment]
PALE ORANGE
Luxury Hotel Suites
Upscale Hotel Suites
Service Apartments
Airbnb Apartments
[Luxury Group Segment]
ORANGE
Mid-tier Hotels
Economy Hotels
Airbnb private rooms
Hostels
Airbnb shared rooms
[Budget segment]
RED
Airbnb Apartments
[Budget Group Segment]
BLUE
Capacity
Figure 1: Accommodation Price & Capacity Matrix (APCM)
The following assessment reviews the various parts of the quadrant for the
APCM:-
1. The Budget Group Segment. Located on the lower right of the matrix, the
colour allocated (indicated at bottom right of each quadrant) reflects the
relatively “blue ocean” (uncontested) space that it occupies in Singapore,
using W. Chan Kim and Renee Mauborgne’s well-regarded Blue Ocean
strategy as a reference point (Kim & Mauborgne, 2004). There is little
competitive pressure on the budget group segment. It is illegal to rent out an
entire public flat (generally referred to as “Housing Development Board
(HDB) flats” in Singapore) as they are subsidised by the HDB – Singapore’s
public housing authority, for the primary purpose of facilitating home
ownership by Singapore citizens. It is also technically illegal for private home
owners to rent out their homes if the rental duration is less than six months.
Serviced apartments cannot fill the demand gap as they are not allowed to
accept guests staying for less than seven days. It is the researchers’ view that
the legalisation of Airbnb in Singapore would allow the company to operate
comfortably in this relatively uncontested market space and to enjoy a period
of dominance prior to the emergence of serious competition. The researchers
also maintain that Airbnb is well placed to expand into the “Budget” and
“Luxury Group” segments in the APCM. Such a move would be a classic case
of Christensen’s “disruptive innovation” (Christensen, 1997), since the origins
of the Airbnb product are a simple application at the bottom of a market (the
Budget Group Segment) with a progressive ascension and increase in up-
market representation (Luxury Group Segment).
2. The Budget Segment. This segment is located on the lower left of the matrix
and marked red (bottom right of the quadrant) to reflect the current cut-throat
competition faced by players in this accommodation category. With influx of
new mid-tier and economy hotel rooms and hostels, ARR in mid-tier hotels
suffered the largest percentage decline (-5.6%) in 2015, while AOR for
economy hotels have dropped to below 80% in 2015, the lowest AOR across
all hotel categories in Singapore. While the hoteliers interviewed did not view
Airbnb as a current competitor, this was largely due to the negligible market
share the latter currently holds. Airbnb’s expansion into this budget segment is
however not difficult. All that is needed is to list available rooms on Airbnb’s
booking site. Airbnb does not need to construct, own or manage the rooms. It
is suggested that accelerated entry into this budget segment would be a natural
and convenient next move for Airbnb, thus turning this segment into a deeper
red ocean.
3. The Luxury Group Segment. This segment on the upper right of the matrix
includes serviced apartments bounded by the minimum 7-day stay regulation,
higher-end hotels with suites that can accommodate more than two persons,
and also Airbnb listings of luxurious full apartments. The light red colour
(bottom right of the quadrant) attributed to this segment reflects the
comparatively less competitive landscape compared with the budget segment,
and is another segment that Airbnb can target conveniently and it is already
doing by simply listing higher-end apartments on its booking site. One
possibility is for Airbnb to evolve to operate like OneFineStay where
housekeeping and other services are provided daily for home rentals, or for
competitors like OneFineStay to emerge and enter this accommodation
category.
4. The Four/Five-Star Hotel Segment. Located on the upper left of the matrix and
given a faint red colour (bottom right of the quadrant) to suggest limited
increased competition in this category due to the high cost of construction and
land acquisition, this is probably the segment that has the least or minimum
impact from Airbnb activities. Luxury and upscale hotels generally do not
belong to the same price and capacity categories as Airbnb, which competes
on affordability and spaciousness in order to accommodate larger traveling
groups. Despite this, players in this category are beginning to expand into the
home rental business, eg. Accor Group (4/5-star hotel segment)’s acquisition
of OneFineStay (Luxury group segment). From the consumer and
environmental perspectives, and as alluded to in CBRE Hotels’ Americas
Research (Lane & Woodworth, 2016), these acquisitions of home rental
businesses could lead to less construction, and thus to a more
“environmentally-friendly” world.
CONCLUSIONS AND OPPORTUNITIES FOR FURTHER RESEARCH:
As with other industries that are confronting disruptive innovations, the risk of
being displaced in hospitality is real if not immediate, and the need to reposition and
revisit one’s value proposition becomes urgent. This study has aimed to evaluate
Airbnb’s current and prospective impacts on Singapore’s budget hotels (including
hostels). It is instructive that most of the hoteliers and hostel operators interviewed for
this research consider competition to be from other hotels and hostels within the same
category, and not Airbnb. Nonetheless, there is general acknowledgement of the huge
inventory of private residential accommodation in Singapore that can prospectively be
converted for home rentals, especially if Airbnb is eventually legalised in the city
state. It is with this understanding that all but one of the interviewees perceive Airbnb
to be a serious direct competitor in the near future, but not of an immediate threat.
There were also insightful comments suggesting that competition between
Airbnb and hotels need not be a zero-sum game. These comments specifically
proposed that Airbnb should be viewed as a collaborator as well, in addition to being
a competitor. One specific collaborative growth opportunity was in expanding
Singapore’s tourism economy by generating new markets, and an example given was
in attracting the budget conscious family segment who would have otherwise found
Singapore too expensive.
In addition to urging the authorities to regulate home rentals in Singapore,
several useful suggestions with regards to home rental regulations were proposed by
the interviewees, including the use of 3rd party management companies to transact on
behalf of home owners and tenants. The interviewees should be encouraged that after
the interviews in 2016, a law was enacted in February 2017 which has made it illegal
for private home owners to rent out entire apartments and rooms for less than six
months (including those listed on Airbnb), without permission from the Singapore
Urban Redevelopment Authority (URA). At the same time, Airbnb and home rental
companies should similarly be heartened that in announcing the law, Minister for
National Development Lawrence Wong revealed in Parliament that “URA is studying
the option of creating a new category of private homes that will be allowed for short-
term rentals”, with possibly a shorter rental period compared to the current minimum
of six months. It would appear that there would be a more “level playing field” for
participants in Singapore’s accommodation sector in the near future.
The mapping of Airbnb within the context of Singapore’s accommodation
landscape has also allowed a clearer positioning of Airbnb relative to hotels and
hostels in terms of cost, capacity, and value proposition. It is hypothesized that if
legalised, Airbnb has a legitimate prospect of becoming the dominant player in what
has been labelled the “Budget Group Segment” in the Accommodation Price and
Capacity Matrix (APCM) above. The researchers also maintain that Airbnb is well
placed to expand further into the “Budget” and “Luxury Group” segments in the
APCM, a move that aligns with Christensen’s “disruptive innovation”, since Airbnb’s
product owes its origins to simple applications at the bottom of a market (the Budget
Group Segment) and can progressively ascend and increase its representation up-
market (Luxury Group Segment). Finally, with more mergers and acquisitions
involving home rental businesses, there is hope that it could signal the herald of a
more environmentally-friendly accommodation sector with more optimised resource
allocation and significantly less construction.
The competitive set within which Airbnb and other home rental businesses
operate is relatively young – major players like HomeAway, Flipkey and Airbnb were
only established in 2005, 2007 and 2008 respectively. While researchers have shown
increasing interest in the impacts of home rentals on the hotel industry, the literature is
scant on how home rentals have influenced other domains within the wider tourism
sector including attractions, MICE, travel agencies and gaming. This constitutes a
potential area for research since the tourism sector is a large and interconnected
system with various sectors being simultaneously engaged in both collaboration and
competition. Another research opportunity is to conduct regular strategy updates on
hotel industry reactions to the continued rise and popularity of home rentals. As was
illustrated in the APCM, home rental businesses such as Airbnb are already expanding
beyond the original definitions of their competitive set. Meanwhile major hotel
chains have sought to acquire home rental businesses. The findings of the current
investigations suggest the likelihood of intensified competition between
accommodation providers over coming years.
STUDY LIMITATIONS:
The researchers have been unable to forecast the timing of Airbnb’s
anticipated emergence as a direct competitor and threat to mid-tier and economy
hoteliers. With a view to providing greater clarity, it is suggested that an extrapolation
should be undertaken using the exponential growth rates that have previously been
experienced in Western markets as a basis for assessing the growth in Airbnb
Singapore’s market share. Once the prospective Airbnb market share has been
determined, a quantitative exercise should be undertaken, drawing upon a
significantly larger sample size of mid-tier and economy hoteliers and hostel
operators. The collective respondent views and feedback should provide a more
quantitative and longer term assessment of Airbnb’s impact on Singapore’s mid-tier
and economy hotels and hostels. Another limitation of this study has been the lack of
detailed transaction data that is available from Airbnb Singapore and which would
potentially enable a more detailed examination of Airbnb’s existing business in the
city state. Finally, this study is limited in that it did not highlight the potential
competitive responses of mid-tier and economy hoteliers to tackle the type of
disruptive innovation that has been posed by Airbnb and other home rental
companies.
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Annex A
Questionnaire for mid/economy-tier hoteliers in Singapore
1. AOR, AAR and RevPAR for mid/economy-tier hotels in Singapore
declined in 2015/16. In fact, it has been declining since 2013. Is your hotel
affected? If yes, what are the general reasons for the decline? [General
background]
2. Specifically on increasing competition, would you consider competition to
be mainly from other mid/economy-tier hotels, or peer-to-peer sharing
platforms like Airbnb home rentals? [On competition in general]
3. If you see Airbnb as a competitor, do you think Airbnb reaches out to a
different segment from your hotel, ie. they expand the overall tourism pie
more than competing for the current pie? [On competition or otherwise]
4. Do you think Airbnb competes directly with mid/economy-tier/your hotel?
[On direct competition]
5. What would your major concerns be, if Airbnb is legalised in Singapore?
[On regulations]
6. Any suggestions on regulations? (This question is kept as open-ended as
possible). [On regulations]
7. What would be some of your immediate and longer term responses to
Airbnb and other home-rental companies? [On future responses]
Annex B
Guiding Questions for in-depth interview with Airbnb Asia HQ representative
1. Widely described as the most disruptive innovation for the tourism industry in
recent times, Airbnb’s entry into the accommodation scene in 2008 has been
heavily studied and documented. Would you use the word “disruptive” to
describe the Airbnb phenomenon? [On alternative accommodation and its
impact in general]
2. How many active listings are there in Singapore say in Dec 2015 as compared
to Dec 2014? Trying to gauge Airbnb’s room supply as a % of room stock in
Singapore. What is the ADR for Airbnb rooms in 2015? To compare with
ARR in 2015. [Background information]
3. Many associate Airbnb with exponential growth. Now that you are in Asia, are
you expecting (or already experiencing) exponential growth since 2013? Is
Airbnb’s listings in Singapore experiencing exponential growth? (ask for data
if possible). [On growth potential]
4. Literature on Airbnb have suggested that your 2 main competitive advantages
are affordability, and localised experience. As such, many suggest that budget
hotels would be the first to feel the impact of Airbnb’s entry into any market.
Do you agree? [On competition]
5. The hotel industry in Asia at large have surely taken notice of your presence,
and some, especially those in the budget category (mid & economy-tier in
Singapore) would surely be worried. Do you think they should be worried?
[On competition or otherwise]
6. What sort of friendly advice would you give to owners of mid/economy-tier
hotels, in terms of direct competition (perceived or real) from Airbnb? (if not
already covered in answer to (8) above). [On competition]
7. Do you think a major hotel chain might invest in Airbnb, or would Airbnb
invest in a major hotel chain? [On competition resulting in industry changes]
8. With the likes of onefinestay and Tujia Somerset now competing in the luxury
and business budget segments respectively, would you agree that very soon,
home-rental companies would compete across the entire spectrum of hotel
tiers in the near future? [On competition]
9. The “Sharing Economy Association Singapore” has been established, and a
position paper on Home Sharing in Singapore has been published. How has
this process of lobbying the authorities in Singapore been for you and Airbnb?
[On regulations]
Annex C
Singapore Hotels – AOR & ARR in 2015
Standard Average Occupancy Rate Standard Average Room Rate
Year Luxury Upscale Mid-Tier Economy Luxury Upscale Mid-Tier Economy
% % % % S$ %∆ S$ %∆ S$ %∆ S$ %∆
2015(e) 86.5 86.1 85.5 79.3 449.1 -
2.8 265.1 -
0.6 174.9 -5.6 105.0 -4.5
(Jan to Dec)
Jan 84.8 83.6 82.9 75.5 462.7 1.4 263.2 2.0 173.9 -3.6 103.3 -1.5
Feb 88.0 87.2 84.6 75.7 458.7 -
7.2 262.0 -
6.2 168.2 -
14.3 102.0 -7.4
Mar 85.7 87.1 84.0 76.3 432.4 -
4.0 263.6 -
2.4 179.6 -6.4 103.4 -3.6
Apr 82.7 82.6 80.9 77.9 435.7 -
4.6 259.0 -
3.5 172.7 -
10.3 100.8 -
10.7
May 81.5 83.4 83.6 81.2 434.2 -
5.6 255.1 -
2.8 170.8 -6.0 101.1 -5.4
Jun 84.2 85.3 85.0 80.2 419.9 -
2.9 262.1 0.3 179.5 -3.9 108.0 -3.9
Jul 90.1 91.3 91.2 86.2 431.9 -
5.0 260.4 1.1 170.1 -4.4 106.1 -4.2
Aug 92.2 92.6 92.6 87.0 458.4 -
3.4 269.3 2.7 174.8 -2.5 108.3 -1.6
Sep 85.7 84.5 83.1 76.4 481.9 -
2.0 280.5 -
0.5 184.8 -3.6 109.2 -4.3
Oct 89.9 89.1 89.9 80.8 468.7 2.3 276.5 3.9 179.3 -1.4 106.7 -2.2
Nov 88.0 85.0 85.2 79.5 438.6 -
0.3 261.4 -
2.0 176.3 -4.3 104.8 -4.5
Dec 85.0 81.0 83.0 75.0 463.6 -
2.4 267.7 0.2 168.3 -6.3 104.8 -5.4
Annex D
Singapore Hotels – AOR & ARR in 2014
Standard Average Occupancy Rate Standard Average Room Rate
Year Luxury Upscale Mid-Tier
Econom
y Luxury Upscale Mid-Tier Economy
% % % % S$ %∆ S$ %∆ S$ %∆ S$ %∆
2014(e) 87.5 87.1 84.9 80.0 461.8 5.9 266.8 -0.7 185.2 -2.8 109.8 9.3
(Jan-Dec)
Jan 86.7 82.0 80.0 74.8 456.1 7.5 258.0 -4.0 180.3 -4.2 104.9 4.5
Feb 92.6 90.9 88.2 81.5 494.0 14.
5279.4 6.9 196.2 7.4 110.1 11.4
Mar 90.6 88.4 85.4 80.2 450.2 6.3 270.5 -0.4 191.8 3.4 106.1 7.0
Apr 86.2 85.0 79.8 81.0 456.6 10.
0268.3 0.4 192.5 0.4 112.9 13.7
May 85.8 83.6 81.5 81.0 460.1 7.9 262.4 -0.6 181.7 -4.2 106.8 6.9
Jun 87.1 86.0 82.6 81.6 432.6 0.6 261.3 -4.0 186.7 -5.6 112.4 8.0
Jul 88.1 90.4 90.6 85.3 454.4 10.
7257.5 -0.8 178.0 -5.0 110.7 9.8
Aug 89.5 92.7 91.6 85.3 474.4 7.4 262.3 -0.3 179.3 -5.5 110.1 8.4
Sep 85.7 87.7 83.4 75.8 491.8 4.3 281.9 -2.3 191.7 -4.9 114.1 11.5
Oct 86.8 87.9 87.5 78.9 458.3 2.7 266.1 -1.6 181.8 -5.7 109.1 8.0
Nov 88.1 87.5 87.1 78.2 440.0 -1.6 267.1 -0.3 184.2 -4.1 109.7 11.8
Dec 84.0 84.0 82.0 77.0 473.9 2.0 267.2 -0.3 179.6 -4.5 111.0 12.1
Annex E
Singapore Hotels – AOR & ARR in 2013
Standard Average Occupancy Rate Standard Average Room Rate
Year Luxury
Upscal
e Mid-Tier Economy Luxury Upscale Mid-Tier Economy
% % % % S$ %∆ S$ %∆ S$ %∆ S$ %∆
2013 88.1 85.9 86.6 84.2 435.
91.1 268.5 -
10.9 190.6 -3.3 100.
4-8.7
(Jan-
Dec)
Jan 85.1 84.4 84.3 83.4 424.2 2.5 268.7 -6.1 188.2 2.4 100.4 -6.6
Feb 89.5 86.7 84.7 81.2 431.4 -6.1 261.4 -14.7 182.7 -12.0 98.9 -9.0
Mar 89.6 87.8 88.0 87.2 423.4 -0.7 271.6 -7.3 185.6 -5.7 99.2 -7.3
Apr 86.6 83.7 84.0 85.9 415.2 -4.3 267.3 -11.6 191.8 -5.9 99.3 -10.4
May 87.1 83.6 85.0 84.9 426.5 0.2 264.0 -11.3 189.6 -3.3 99.9 -5.8
Jun 87.7 86.8 89.5 87.8 430.1 2.1 272.2 -10.9 197.8 -2.4 104.1 -8.2
Jul 88.7 87.3 90.1 87.7 410.5 0.1 259.7 -13.1 187.3 -4.4 100.8 -7.8
Aug 92.3 90.1 89.9 86.7 441.5 6.8 263.1 -12.5 189.7 0.5 101.5 -7.9
Sep 88.1 84.3 84.4 81.2 471.4 -1.8 288.7 -11.1 201.6 -1.9 102.4 -10.9
Oct 90.0 88.4 88.0 80.4 446.2 3.4 270.6 -10.0 192.7 -1.2 101.0 -7.9
Nov 88.6 86.5 88.1 81.5 446.9 4.5 267.8 -11.3 192.0 -2.3 98.1 -11.5
Dec 83.8 81.3 82.4 82.0 464.5 6.3 268.0 -11.1 188.0 -2.7 99.0 -12.5
