'So much relief': Sales trickle in for hard-hit travel retailers as more VTLs open

SINGAPORE: Business is trickling in for pandemic-battered stores selling travel necessities such as luggage and winter wear, providing retailers with some relief after a year-and-a-half of dismal sales.

Most stores CNA spoke to said sales have risen between 10 and 15 per cent, following recent announcements about quarantine-free travel under the vaccinated travel lane (VTL) scheme.

“It was the best news we’ve had since 2020,” said Ms Joyce Lim, director of wholesaler and retailer The Travel Store, which has seen sales at some of its stores rising by 15 per cent.

Some department stores have already contacted the company in the hopes of organising travel fairs in the middle of November, she said.

At lifestyle travel retailer The Planet Traveller, where sales have grown about 10 per cent, customers are mostly buying luggage in larger sizes and accessories such as travel adapters and organisers, said Ms Aw Yang Chen Lin, a marketing executive at its parent company Seager.

Luggage is also the top-selling item at Winter Time, followed by coats for cold weather, its marketing manager Rebecca Poon told CNA. Sales there have improved by 10 to 15 per cent.

Moneychangers such as Mr Mohamed Rafeeq, who owns Clifford Gems & Money Exchange in Raffles City, are also seeing a pick up in their business.

“Before the announcements, in one day we would have three to five customers, or zero sometimes.

“Last week, I saw maybe 10 to 13 customers a day. From zero to 13, something is better,” he said, noting that customers have mostly been looking to buy Korean won and euros.

“(There's) so much relief … I’m very happy,” said Mr Rafeeq.

BADLY HIT BY COVID-19

The green shoots of recovery come after gruelling months of cost-cutting, despite several rounds of wage offsets and rental rebates for the industry.

Sales at the Travel Store plummeted by as much as 95 per cent, leading the brand to shut two of its five stores in Singapore.

Winter Time now has three stores, down from the 10 it had in 2019. Like other brands, it had to pivot to selling other items such as sportswear, lifestyle products, backpacks and gifts.

At The Planet Traveller, falling sales during the pandemic drove it to double down on its online sales channels.

Businesses also had to cut costs significantly to stay afloat.

For Mr Rafeeq, that meant the painful decision of letting go 10 of his 17 employees, most of whom had worked for him for more than a decade.

To survive, the company bought some currencies and waited for rates to go up before selling them, though this did not always guarantee a profit, said Mr Rafeeq.

“Every month we had a deficit, losing in rent and salaries, so we were taking money from our own savings. I was very worried.”

NOT OUT OF THE WOODS YET

Though things are looking up, businesses are not out of the woods yet.

Winter Time’s Ms Poon said sales have improved but are “still far from pre-COVID” numbers.

“We need to give very aggressive promotions to attract sales. So even though sales are coming in, the margin is not as good as previous times,” she told CNA.

Online store Luggage Outlet said sales rose rather substantially after the news about VTLs – but it added that this was likely because it coincided with major e-commerce campaigns during the same period.

“Based on the purchase patterns, we have yet to see a clear return of leisure travellers,” said its owner Tan Wei Li.

“Most people are still buying luggage of the largest sizes in multiple quantities. We think that most of them seem to be foreigners (domestic helpers, expatriates) returning to their home countries, or locals relocating overseas.”

One moneychanger, Regent Money Changer, also has not benefited from the increase in travel – simply because its outlets have remained shut, as they are in hotels serving quarantined travellers.

In any case, its business relies heavily on those travelling to and from nearby countries such as China, Thailand or India, for which quarantine-free travel is not an option yet, said Mr Abdul Mu’id, who used to help his father run the business.

And they are not betting on a quick recovery in tourism. “Even though borders opened and you can travel, going back to the original form – I think it won’t be for now, maybe after five years,” he said.

WILL IT IMPROVE FURTHER?

Moving forward, stores hope the sales momentum will continue to grow.

This is because the end of the year is traditionally a peak sales period, given the holiday season, said The Planet Traveller’s Mr Aw Yang.

Luggage Outlet’s Mr Tan added that the upcoming 11.11 and 12.12 sales should also give retailers a boost.

Winter Time also said it expects sales to increase another 15 to 20 per cent in the next two months, especially if more VTLs are announced.

More leisure travellers are likely to return to the market in the next few months, the businesses said.

“Travel, after all, is one of Singaporeans' favourite past times and VTLs definitely offer a respite from the pandemic-enforced day-to-day grind at work,” said Mr Tan.

The Travel Store’s Ms Lim added: "I think most Singaporeans are still very conservative, they will want to monitor and see … So maybe next year (sales) will improve more.

“I’m not sure (how much sales will increase), but at least it’s up, then I’m very happy already … So as long as it goes up, we see the light.”