S’pore tourism slumps as regional events take a toll

SINGAPORE — Tourism spending and arrivals here were hit in a second quarter dogged by regional events such as political unrest in Thailand, the disappearance of Malaysia Airlines flight MH370 and the abduction of Chinese tourists in Sabah.

Visitor arrivals numbered 3.6 million from April to June, a drop of 6 per cent from the previous year and the steepest year-on-year decrease in five years. Tourism receipts fell by 3 per cent to S$5.6 billion.

Notably, the number of tourists from China — who ranked second in tourism spending after Indonesians — slumped by 47 per cent in the second quarter, while their spending dipped by 24 per cent.

The latest figures were published by the Singapore Tourism Board yesterday in its Tourism Sector Performance Q2 2014 report. Spending by visitors from eight of Singapore’s top 10 markets took a tumble in the second quarter, with only Hong Kong bucking the trend, because of a boost in business and Meetings, Incentives, Conferences and Exhibitions travellers, and Australia showing no change in tourism spending.

Expenditure on transportation, food, accommodation and shopping fell, with tourist spending on shopping registering the starkest drop of 19 per cent from the previous year. However, this was partially offset by spending on sightseeing, entertainment and gaming, which grew 12 per cent, courtesy of strong gaming revenues reported by the two integrated resorts.

Apart from a strong Singapore dollar, said CIMB economist Song Seng Wun, the retail landscape has become more competitive, with more choices available in countries such as China and Indonesia as their populations grow wealthier. “Shopping options (in Singapore) aren’t as strong a pull as they once were,” he said.

Dynasty Travel marketing communications director Alicia Seah said tourists from China are leaning towards Seoul, South Korea, as well as Europe, with the euro at attractive levels, for their shopping fix.

Political turmoil in Thailand and the March 8 disappearance of flight MH370 — with a majority of Chinese passengers on board — led to many travellers from China avoiding the South-east Asian region, she said.

Boosted by a stronger first-quarter performance, overall tourism receipts for the first half of this year grew 2 per cent to S$11.8 billion and visitor arrivals dipped by 3 per cent to 7.5 million, compared with the same period last year. These results are in line with STB’s yield-driven strategy as it pursues quality tourism, the board said.

Mr Song expects visitor arrivals for the year to be about 1 per cent lower than last year, which saw 15.6 million visitors. Tourism receipts could end up marginally lower, he said.

“The best we can hope for is (that it remains) unchanged,” he said. “This year should be the toughest for the hospitality sector since 2003. The plus side is, we think the second quarter should be the trough of a bad year. The second half should be less bad.”

While 2003 was the year that the Severe Acute Respiratory Syndrome hit, Mr Song said a combination of factors outside Singapore’s control were to blame this year, including the anti-corruption drive in China.

UOB economist Francis Tan felt there were still untapped opportunities in the Chinese market, but Singapore tourism players might need to tweak their strategies and offer new products. Instead of the traditional itinerary combining Singapore with Malaysia and Thailand, cruise tourism could be promoted more, or Singapore could be linked with other nearby destinations such as Bali, said Mr Tan.

Ms Shameem Mustaffa, STB’s research director, said demand for travel appears to remain strong for the next few quarters, particularly among regional markets. “We expect growth in the tourism numbers to continue on the back of major projects such as the recent opening of the Sports Hub, compelling events like Formula One, Women’s Tennis Association Finals, TravelRave and more,” she said.

The National Gallery Singapore and Singapore Pinacotheque de Paris museum are opening next year, she added.

The STB is also encouraging local players to try out new concepts with tourism potential, said Ms Shameem.

Indeed, not all is gloom on the tourism front. Chan Brothers Travel, for instance, has bucked the decline seen in visitors from China with a 20 per cent increase this year, said marketing communications manager Jeremiah Wong.

The bulk of its clients from China are MICE travellers or students on excursions, who spend a longer time here than other transient travellers, he said. They tend to visit Orchard Road, attractions under Wildlife Reserves Singapore and Resorts World Sentosa, and their spending power is consistently high, he added.