CDL Hospitality Trust

CDL Hospitality Trust: OCBC maintains Buy with $2.04 TP. Note that on a worldwide basis, SG commands fairly high hotel room rates. House examine average hotel room rates paid by travelers from different places of origin to destinations worldwide. Travelers from China, India, Australia, HK and the UK, which form half of the top ten places of origin for travelers to Singapore in 2011, are willing to pay 24-61% more for a hotel room in the most expensive destinations vs SG. As SG continues to become a more attractive travel destination, especially for its trio of MICE, gaming and medical tourism, the premium that the most expensive hotel destinations command over it could shrink substantially with time. Additionally, the 9 out of 10 top places of origin for visitors to SG are located in Asia-Pacific. With continued rise of low-cost carriers (LCCs) in this region, intra-Asia travel will increase and people can afford to spend more on hotel rooms. The supply-demand dynamics for Singapore hotels remains positive. House project that hotel room supply will increase by 3.7% p.a. for 2012-2015 while hotel room demand will grow faster at 6.4% p.a.