Aug 3, 2020
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Far East Hospitality Trust saw revenue and net property income (NPI) for the first half of 2020 drop 20.6% year-on-year and 23.1% year-on-year, respectively.

Distribution per unit (DPU) also declined 43.4% year-on-year as it retained $5.5 million to provide rental rebates and deferrals to commercial tenants.

And while revenue per available room (RevPAR) were weak, its decline was less compared to its peers “as occupancies at its hotels and serviced residences (SRs) were bolstered by lower-priced demand substitutes originating from travel and border restrictions”, revealed Maybank Kim Eng in a report.

The trust’s hotel revenues dropped 25.6% year-on-year and 31.5% half-on-half, as occupancy which was affected during the start of the pandemic began to pick up from March.

“This was driven by demand from government agencies as dedicated facilities for isolation purposes and accommodation for Malaysian workers affected by border closures,” said the report.

Maybank Kim Eng noted that occupancy was lower by 11.1 percentage points year-on-year at 77.6% in 1H 2020, while RevPAR declined 42.9% year-on-year to $79.

The drop in RevPAR comes as average daily rate fell 34.7% to $102 as the trust “relied more on its alternative lower revenue sources”.

Meanwhile, revenue from serviced residences fell 9.4% year-on-year and 13.4% half-on-half, “as a steady base of long leases from its corporate contracts helped support occupancy”.

But while occupancy improved 1.7 percentage points year-on-year to 82.7%, revenue per available unit (RevPAU) dipped 4.7% year-on-year to $166 in 1H 2020 as ADR slid 6.6% year-on-year to $200.

Looking ahead, May Bank Kim Eng expects to see a weaker 2H 2020 “as gains from the earlier growth in shorter-term stay bookings at higher rates that contributed about 20% of its serviced residences demand, is likely to taper off”.

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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email

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