Singapore: Asia’s entertainment destination
- Coldplay’s and Taylor Swift’s six-show line-ups at the Singapore National Stadium to draw 300,000 attendees each, rivaling the 2022 F1 Grand Prix.
- Concerts could raise FY24F RevPAR by 1.5-1.9%, translating into FY24F DPU upsides of 0.2%-1.5% for CLAS, CDLHT and FEHT.
- Positive newsflow of several artists adding and selling out additional shows should create a virtuous cycle for
Singapore poised to be Asia’s leading entertainment destination
Coldplay’s and Taylor Swift’s six-show line-ups at the Singapore National Stadium should draw 300,000 attendees each, rivaling the 2022 F1 Grand Prix. With more shows in Singapore compared to any other Asian destination for both artists’ respective world tours, Singapore is reinforcing its position as an unmissable destination for entertainers. According to The Straits Times, in the three days after Coldplay tickets went on sale, digital travel platform, Agoda, observed an 8.7x search increase for accommodations in Singapore during Coldplay’s concert series in Jan 24, driven mainly by searches originating from Malaysia and Indonesia. Singapore is also likely to see concertgoers from HK, Thailand, Vietnam, India, the Philippines and Australia, among others. Live Nation’s growing presence in Singapore (it leased 100% of LREIT’s Grange Road development) and Universal Music Group setting up its Southeast Asia headquarters in Singapore in 2019 are evidence that music juggernauts are recognising Singapore as the top entertainment destination within the region, in our view.
Potential 0.2%-1.5% upsides to our FY24F DPUs
More than 300,000 tickets sold for Coldplay’s six-day concert puts it on par with the record 302,000 attendance at the 2022 Singapore Grand Prix. According to Singapore’s Ministry of Trade and Industry, foreigners accounted for 49% of attendees at the 2022 F1 Singapore Grand Prix. Assuming foreigners account for 30% of concertgoers for the upcoming concerts and that 50% of foreigners will book at least one night’s stay, we estimate that this could boost hotel occupancy during concert days by 5-8% pts and FY24F RevPAR by 1.5-1.9%. According to our forecasts, Singapore accounts for 19%, 62% and 100% of CLAS, CDREIT and FEHT’s FY24F gross profit, respectively. Based on our sensitivity analysis, the two concerts could translate into potential FY24F DPU upsides for CLAS, CDLHT and FEHT of 0.2%-0.3%, 0.8%-1.0%, and 1.1%-1.5%, respectively.
An exciting line-up of events for FY24F; positive on hospitality
Positive newsflow of several world-renowned artists adding and selling out additional shows in their Singapore concert series should create a virtuous cycle and reinforce Singapore as an entertainment destination for tourists, in our view. We think our FY23F estimates may be in line, but we may see tailwinds in 2024F, despite a slower macro outlook. Potential re-rating catalysts include more artists announcing upcoming concerts in Singapore. Downside risks include weaker-than-forecast leisure/corporate travel, which could crimp hotel occupancy and earnings. Reiterate Overweight sector rating. Hospitality is our third preferred sector. Our picks for the sector in order of preference are CLAS, FEHT and CDREIT.
Highlighted Companies
CapitaLand Ascott Trust
ADD, TP S$1.27, S$1.09 close
Our top sector pick. CapitaLand Ascott Trust’s (CLAS) geographically diversified portfolio of serviced residences (SRs), business hotels and extended stay assets strikes a balance between stable and growth income, with long-stay demand providing stability, while shorter-stay accommodations allow it to drive rates.
CDL Hospitality Trust
ADD, TP S$1.55, S$1.20 close
With 66% of its AUM in Singapore, CDL Hospitality Trust (CDREIT) is a proxy for the recovery of Singapore’s hospitality sector. AEIs at several of its properties and strong demand across key markets
should support further RevPAR growth.
Far East Hospitality Trust
ADD, TP S$0.79, S$0.615 close
Far East Hospitality Trust (FEHT) is a Singapore pure play. Strong corporate demand for SRs has pushed occupancies and RevPAR above 2019’s levels, while its newly revamped hotel offerings are expected to drive room rates. Including capital gain distributions from the divestment of Central Square, FEHT
offers a 6.7% FY23F dividend yield.
Singapore fans competing with tourists for tickets
Singapore will be the seventh out of eight stops for British rock band Coldplay’s Music Of The Spheres world tour (2023-24). The band will perform 10 shows in Asia — in Japan (2), Taiwan (2), Jakarta (1), Australia (2), Malaysia (1), and the Philippines (2) — before the Singapore stop, which will be held at the Singapore National Stadium, the nation’s largest venue. Despite the 10 shows lined up in Asia before the Singapore leg, demand for tickets to Coldplay’s Singapore tour was overwhelming, resulting in the band adding two additional shows to their original 4 Singapore shows, bringing the total number of shows to six — all of which were sold out.
Coldplay fans in Singapore had to contend with fans from neighbouring countries for tickets. According to The Straits Times, in the three days after Coldplay tickets went on sale, digital travel platform, Agoda, observed an 8.7x search increase for accommodation in Singapore during Coldplay’s concert series in Jan 24, driven mainly by searches originating from Malaysia and Indonesia. Singapore is also likely to see concertgoers from HK, Thailand, Vietnam, India, the Philippines and Australia, among others.
Could more shows be added for Taylor Swift’s upcoming concert in Singapore?
With only two stops in Asia — Singapore and Japan — competition for tickets to American singer-songwriter Taylor Swift’s The Eras world tour could be even fiercer than that of Coldplay’s. Swift will perform two shows in Japan before the Australia and Singapore legs of her tour. She had added three Singapore shows to the earlier announced three, for six total shows in Singapore on 2-9 Mar 2024. With her last show in Sydney, Australia, slated for 25 Feb 2024 (six days before the start of her Singapore tour), we are optimistic that Swift could add up to three additional shows in Singapore, giving “Swifties” in the region more opportunities to catch her live.
Expect an exceptionally strong 1Q24F
1Q24F is likely to be a record 1Q for the Singapore hotel industry, in our view. Major events in 1Q24F include Coldplay’s concerts (23, 24, 26, 27, 30 and 31 Jan 2024), the biennial Singapore Airshow (20-25 Feb) and Taylor Swift’s concerts (2, 3, 4, 7, 8, 9 Mar). Historically, Singapore’s 1Q numbers have been supported by Chinese travellers looking to escape the Chinese New Year festivities back home. As China’s flight capacity normalises, we could see this trend returning, further supporting 1Q24F numbers.
