CGS International
Date of Report: September 17, 2025
Singapore Hospitality REITs: Strong Visitor Arrivals and Resilient Hotel Segments Amid Market Shifts

Singapore’s Hospitality REITs Surge: Visitor Arrivals Up and Hotel Metrics Improve

Singapore’s hospitality sector is showing resilience in 2025, supported by robust international visitor arrivals (IVA) and evolving hotel performance metrics. The latest report from CGS International highlights the sector’s progress, key trends, and a detailed analysis of major listed REITs, offering investors in-depth insights into opportunities and risks.

International Visitor Arrivals (IVA): On Track for STB’s 2025 Targets

IVA for August 2025 reached 1.61 million (+4.6% YoY), while July saw 1.68 million (+4.9% YoY), both buoyed by the summer holiday peak and the World Aquatics Championships.
The average monthly IVA in the first eight months of 2025 stands at 1.45 million, surpassing the 2024 average of 1.38 million.
Year-to-date, cumulative IVA is 11.6 million, accounting for 63-68% of the Singapore Tourism Board’s forecast of 17-18.5 million for the full year. Expectations are that IVA will meet the lower band of this range.

Hotel Performance Metrics: RevPAR Trends and Segment Analysis

Revenue per available room (RevPAR) in July 2025 rose 4% YoY to SGD 251, driven by a 2% increase in ADR and occupancy climbing to 91.5% (+1.9ppt YoY).
For January-July 2025, average monthly RevPAR was SGD 216, higher than the SGD 210 in the first half but still below the SGD 222 in the same period last year.
The pace of YoY RevPAR decline narrowed to -2.9% in 7M25 (from -4.1% in 6M25).

Segment Breakdown: Luxury and Mid-Tier Lead Resilience

– Luxury hotels: RevPAR down 0.7% YoY, ADR up 1.2%, occupancy down 1.9ppt. – Upscale hotels: RevPAR down 4.7% YoY, ADR down 3.8%, occupancy down 1ppt. – Mid-tier hotels: RevPAR down 3%, ADR down 3.5%, occupancy up 0.4ppt. – Economy hotels: RevPAR down 6.2%, ADR down 5.2%, occupancy down 1ppt.
Room supply:
Mid-tier and economy hotels saw the largest increases in room stocks since Jan 2024—up 3% and 6%, respectively.
Upscale room stocks declined by 4%.

Key Market Drivers and Risks

Positive catalysts: A resurgence in corporate and group travel could boost RevPAR performance.
Risks: A delayed Formula One race (now set for October), the postponed Disney Cruise Line debut (now March 2026), increased hotel room supply, and potential global macroeconomic weakness may weigh on sector growth.

Highlighted Hospitality REITs: Detailed Analysis

CapitaLand Ascott Trust (CLAS)

– Rating: Add – Target Price: SGD 1.13 – Last Close: SGD 0.92 – CLAS is favored for its stable distribution per unit (DPU) outlook and active portfolio reconstitution. – Diversified footprint, with properties under management contracts and minimum guaranteed income (MCMGI) showing a 3% YoY RevPAR increase in 2Q25. – Attractive FY25F projected yield: 6.6% – CGS International holds a proprietary position in CLAS.

CDL Hospitality Trust (CDREIT)

– Rating: Hold – Target Price: SGD 0.75 – Last Close: SGD 0.82 – Maintained Hold due to muted 1H25 results and persistent uncertainties. – Turnaround for core Singapore hotels likely delayed until FY26. – Potential catalysts: UK interest rate cuts, rebound in travel demand. – Trading at a 42% discount to book value.

Far East Hospitality Trust (FEHT)

– Rating: Add – Target Price: SGD 0.74 – Last Close: SGD 0.605 – Mid-tier hotels benefit from down-trading trends and lower interest expenses due to reduced cost of debt. – Opportunities for smaller acquisitions in Japan and from the sponsor’s Singapore pipeline. – Projected FY25F yield: 6.2%

Peer Group Comparison: Hospitality, Industrial, Office, Retail, and Overseas REITs

Below is a peer comparison of key financial metrics across major SREITs, including implied yields, price-to-book ratios, and discounts to NAV.

Other sectors (Industrial, Office, Retail, Overseas) are also covered in detail in the report, presenting their respective dividend yields, discounts to NAV, and market capitalizations for benchmarking against hospitality peers.

Sector Outlook: Overweight on Hospitality REITs

CGS International maintains an “Overweight” rating for Singapore hospitality REITs, favoring CapitaLand Ascott Trust (CLAS) as the sector pick. The outlook is supported by solid visitor arrival trends, resilient luxury and mid-tier hotel segments, and attractive projected yields. Risks remain, especially with increased hotel supply and potential global economic headwinds, but the sector’s fundamentals continue to offer compelling long-term value for investors.

Analyst Details

– Li Jialin ([email protected]) – Lock Mun Yee ([email protected])

Recommendation Framework & Disclosures

Stock Ratings: Add (expected total return >10% in 12 months), Hold (0–10%), Reduce (<0%). Sector Ratings: Overweight, Neutral, Underweight (reflects aggregate recommendations by market cap).
CGS International holds a proprietary position in CapitaLand Ascott Trust but no analyst holds any interest in covered companies.

Conclusion: Navigating Opportunities in Singapore’s Hospitality REITs

Investors seeking exposure to Singapore’s property market should focus on hospitality REITs with strong fundamentals and attractive yields, particularly CLAS and FEHT, while remaining cautious about the timing of sector catalysts and macroeconomic risks. The sector’s resilience, driven by rising international arrivals and robust hotel segment performance, underpins its positive outlook despite ongoing market shifts.

This comprehensive review empowers investors and market watchers with actionable insights on Singapore’s hospitality REIT sector for the remainder of 2025 and beyond.