For first time in 6 years, number of visitors drops

SINGAORE — After scaling new heights for several years, Singapore’s visitorship figures last year dropped for the first time since 2009 — when the world was mired in the financial crisis — although tourist spending held steady.

The Singapore Tourism Board’s (STB) estimates show a 3.1 per cent decline in tourist volume (15.1 million), dragged down by a sharp fall in the number of Chinese holidaymakers. Those who came, however, spent more, with receipts remaining the same as in 2013, at S$23.5 billion.

The figures, however, did not raise observers’ eyebrows. They cited aviation disasters, such as the disappearance of Malaysia Airlines Flight MH370 last March and the Chinese authorities’ curbs on low-cost shopping tours starting October 2013, as reasons for the softer numbers.

Arrivals from China fell by nearly one-quarter to 1.72 million last year, the sharpest percentage drop among Singapore’s 15 largest source countries. Tourists from Indonesia also fell 2 per cent to about 3 million as the rupiah lost value against the Singapore dollar. But more visitors from Hong Kong, South Korea and Vietnam flocked to Singapore.

Another challenge for Singapore tourism last year was visa liberalisation by nations such as South Korea and Japan for some South-east Asian countries, which may have diverted visitors away from Singapore.

STB chief executive Lionel Yeo declined to provide numbers for visitor arrivals and spending forecasts for this year, saying the figures would be released later. But he said: “We do see some headwinds this year. It’s a mixed picture because we think that there are also other things working in our favour.”

Asked if the authorities’ 2004 target of 17 million visitors this year still applies, Mr Yeo said no. “It’s hard to set a target for 10 years and to expect to land exactly where you said you’d land.”

The STB has, however, achieved its aim of having tourism contribute more to Singapore’s gross domestic product, with tourism receipts growing by nearly 2.5 times since 2004, Mr Yeo said.

CIMB economist Song Seng Wun projected visitor arrivals this year to be 1 per cent higher or lower than last year and tourism receipts to remain flat or increase marginally to about S$24 billion. Singapore’s jubilee celebrations and hosting of the SEA Games could create some buzz, he said. 

This year, the STB aims to drive up cruise passenger numbers, as well as woo business travellers. Its marketing efforts will also be directed at Chinese and Indonesians living in second-tier cities, such as Tianjin, Qingdao and Wuhan in China, and Medan and Surabaya in Indonesia. 

On this strategy, Mr Song said: “I think this is what we have to do. These are very large economies, wealth is growing beyond the main cities and spreading through the country.”

On the hotels front, more rooms were added last year with the opening of Hotel Jen Orchardgateway and Sofitel So, among others. 

Another 5,000 rooms are set to be added this year, with more than 57,000 rooms currently in the market. 

Asked if there may be an oversupply, Mr Allan Chia, head of the Master of Business Administration programme at SIM University’s School of Business, said a glut may not be a bad thing if it results in a price correction in room rates.

“It would encourage travel demand and longer stays because Singapore’s average hotel room rates are one of the highest in Asia and this may ... be less attractive to travellers when comparing with neighbouring destinations.”

Gazetted hotel revenue rose 7.2 per cent last year to hit S$3.1 billion, but average occupancy and room rates dipped. Average occupancy was 0.9 per cent lower at 85 per cent last year, while average room rate was down 0.2 per cent at S$258.