SINGAPORE : Tourism in Asia is feeling the heat from rising prices of oil and other goods, and the number of visitors has fallen in recent months.
But the tourism industry in Singapore, which accounts for 3 to 4 per cent of GDP, is expected to remain resilient, thanks to events such as the Formula One (F1) and the opening of the integrated resorts (IRs).
While the number of tourists coming to Singapore may have taken a dip in recent months, hoteliers here are still expecting a healthy occupancy rate of between 80 and 90 percent in September when the F1 race roars into the city.
Industry experts said events such as the Grand Prix will bring cheer to the tourism sector, following the 4.1 per cent drop in tourist arrivals in June compared to last year.
David Cohen, economist at Action Economics, said: "Visitor arrivals will either be flat year-on-year or down a percent or so, which is not a serious collapse by any means, and we are still looking forward to next year with the opening of the IRs.
"So there is still optimism surrounding the tourism sector. We can be confident that the IRs' tourism can contribute an increasing share to the economy going forward. Over the long run, that should work out, but over the short term, the clouds are there."
Close to 50 per cent of Singapore's tourist arrivals comes from four Asian countries - Indonesia, China, India and Malaysia. Although the slowdown in the US may not have directly affected these countries, rising prices have caused the number of visitors to dip.
Industry experts said one way to pick up tourism numbers in difficult times may be to look at growing customer segments such as the middle class population.
Alexander Kai, Associate Professor of Management Practice at National University of Singapore, said: "It's very important to understand the forces at work in a industry... you have to see which segments are growing and which are declining.
"So even if overall numbers from some countries are declining, there might still be some segments that are rising. Right now there is an emerging middle class from China and India.
"This is a very profitable segment and I think Singapore has to do more to target this kind of segment, by offering more affordable hotel accommodation and services for this segment. So even in a downturn, through smart strategies, you can still find a lot of value," he added.
Industry experts said it is important for Singapore to leverage on its strengths such as an orderly society to continue to remain attractive to business travellers. - CNA /ls