Travel & Tourism: Singapore to ease further once omicron subsides

Hotel S-REITs

The onset of VTL travel lanes back in 4Q21 has shown that monthly inbound travel could increase up to fivefold m/m. With other international demand streams more visible as we go into 2Q22, hoteliers will likely see a pick-up in occupancy and room rates ahead of the market’s expectations.

Asia’s reopening should benefit hotel S-REITs, such as Ascott Residence Trust, CDL Hospitality Trusts, Far East Hospitality Trust, and Frasers Hospitality Trust, as the region is its largest revenue market.

Aviation

We should finally see air travel in Asia trending higher as more countries relax border controls. Airline passenger yields should be supportive, given significant pent-up travel demand.

Hangar activity levels for maintenance, repair and overhaul operators like ST Engineering will rise as airlines return more aircraft into service. SATS will also benefit from higher traffic at Changi Airport and in the region.

Healthcare

Simplified Covid-19 rules could hasten the return of elective procedures and recovery to “business as usual” for healthcare service providers, while further relaxation of travel restrictions could revive medical tourism. Furthermore, there will still be demand for Covid-19-related services in the short term.

Raffles Medical is poised to benefit from the return of elective procedures and potential pent-up demand for medical tourism. It could also still retain its Covid-19-related services for inbound tourists by providing supervised ART tests.