SG Hospitality - OCBC Investment 2016-08-24: Slower growth in tourist arrivals for Jun

Hospitality Sector - OCBC Investment 2016-05-18: Opportunities In Market Volatility CDL HOSPITALITY TRUSTS CDLHT J85.SI  ASCOTT RESIDENCE TRUST A68U.SI 

SG Hospitality: - Slower growth in tourist arrivals for Jun

  • According to Singapore Tourism Board (STB) figures, tourist arrivals from Jan-Jun 2016 are up +12.5% YoY. However, the pace of tourist arrival growth seems to have slowed with Jun arrivals up +7.1% YoY (vs. +10.8% for May, +15.3% for Apr). 
  • On a MoM basis, tourist arrivals dropped 6.4% in Jun this year (vs. -3.1% for Jun ’15, and -2.2% for Jun ’14). 
  • We note that visitor days grew +4.5% YoY for the Jan-Jun period, while inching up +1.6% YoY for Jun alone. This corresponds with various management’s feedback that Jun was a particularly tough month within 2Q16, especially in comparison to Jun 2015 during which the SEA games were held. 
  • Given the currently weak corporate outlook, the prospect of a more muted leisure demand would be worrisome for the 2H16.
  • Yesterday, we reiterated our OVERWEIGHT rating on the REITs space, but would like to highlight that the hospitality sector remains the most challenged sector fundamentally. 
  • Despite this, some valuations look attractive and we encourage investors to buy on dips. Within the hospitality sector, Ascott Residence Trust [BUY; FV: S$1.24] and CDL Hospitality Trust [BUY; FV: S$1.53] are our top picks




Deborah Ong OCBC Securities | http://www.ocbcresearch.com/ 2016-08-24
OCBC Securities Analyst Report BUY Maintain BUY 1.24 Same 1.24
BUY Maintain BUY 1.53 Same 1.53


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