HEADWINDS on several fronts pushed Singapore's 2014 visitor arrivals down 3.1 per cent to 15.1 million, the first decline since 2009 and off the mark set by the Singapore Tourism Board (STB).
The consolation was that STB's quest for higher yield tourists could be paying off - tourism receipts were flat at S$23.5 billion as per capita spending rose.
Expectations were for 16.3-16.8 million visitors and tourism receipts of S$23.8-24.6 billion in 2014, both of which failed to materialise as arrivals from markets such as China took a tumble and certain regional currencies depreciated against the Singapore dollar.
This also suggests that an earlier target - set in 2004 - of 17 million visitors by 2015 would not be met.
At a press conference on Wednesday, STB chief Lionel Yeo highlighted that Singapore's tourism industry has grown by leaps and bounds over the last 10 years. "If we look at what has been achieved so far, we have been able to double visitor arrivals since 2004 (and) increase tourism receipts by two and a half times. To me, these are excellent results and testament to the efforts that have gone into growing the tourism scene over the last 10 years."
Unexpected events, such as the global financial crisis over 2008-2009, also threw Singapore off its growth trajectory along the way.
Last year, visitor arrivals from Singapore's second-biggest source market, China, plunged 24 per cent to 1.72 million as the disappearance of Malaysia Airlines' flight MH370 dampened travel demand to South-east Asia. China's clamping down on the sale of "zero-dollar" tours - cheap tour packages with surprise fees - via stricter laws in late 2013 has also had a significant impact on travel to the region.
Meanwhile, visitor volumes from Singapore's largest source of tourists, Indonesia, dipped 2 per cent to some 3.02 million on the back of the weaker rupiah, while traffic from Malaysia slipped 4 per cent to 1.23 million as the Superstar Virgo shifted its homeport to Hong Kong and the ringgit depreciated. Tourist volumes from Australia dropped 5 per cent to 1.07 million due to lower "twinning" traffic with Singapore's neighbouring countries and the UK.
On the other hand, arrivals from markets such as Hong Kong (17 per cent), South Korea (14 per cent) and Vietnam (11 per cent) all grew at a double-digit clip.
The data also showed that tourists from some key markets are also staying longer and spending more per person. In the case of China for instance, per capita expenditure - stripping out sightseeing, entertainment and gaming - for January-September 2014 climbed 29 per cent to S$1,600 while average length of stay was up 56 per cent to 4.4 days.
This year, CBRE Hotels expects a slight recovery, with visitor arrivals for 2015 to clock 15.7-16 million. The STB is expected to release its own targets in the coming weeks.
In the hotel industry, performance was largely flat last year, with average occupancy declining slightly by nearly one percentage point to 85 per cent, while average room rate was steady at S$258. This resulted in revenue per available room (RevPAR) sliding 1.1 per cent to S$220. Still, overall hotel revenue grew by 7.2 per cent to S$3.1 billion as room stock expanded 3.9 per cent to 57,172 rooms.
Citing URA data, the STB estimates that some 5,000 new rooms will be injected into the market this year from hotels such as Park Hotel Alexandra and The Patina.
According to CBRE Hotels, new supply coming into the market will have an impact on the industry, although many of the hotels will not be completed until later in the year.
Occupancy is expected to drop slightly "by a couple of percentage points at most", said CBRE executive director Robert McIntosh.
Looking forward, the STB acknowledges that the uncertain global economy and currency volatility will continue to have an impact on tourism, while competition from regional markets is also on the rise as some countries relax visa requirements to attract the tourist dollar.
To combat this, the STB will ramp up marketing efforts in major tourism markets - such as by targeting secondary cities in China and Indonesia - to drive demand. There are also plans to market Singapore more as a mono-destination, so there is less dependence on travellers who visit Singapore as part of a multi-tour destination.
As for business travel and MICE (meetings, incentive travel, conferences & exhibitions), the STB is trying to attract more attendees by focusing on 10 key markets in the Asia-Pacific region. For the first three quarters of 2014, BTMICE visitors dropped 13 per cent year on year to 2.3 million and spend by these visitors fell 5 per cent to S$3.89 billion.
And while 2014 wasn't the best year for the cruise industry, the STB projects that throughput will grow 10-15 per cent this year to take it closer to 2013 levels. Ship calls fell from 391 in 2013 to 372 in 2014, while cruise throughput dropped from 1.03 million to 890,000.
Chin Ying Duan, communications manager for Royal Caribbean Cruises, said that the group is basing more ships in Singapore this year in a nod to its bullishness on Asia's growth prospects for the cruise industry.
"This year, we're looking forward to stronger interest," she said, adding that some six different cruise ships will be deploying from Singapore over the course of this year. And from H2 2015, the cruise company will have one cruise ship with a year-long deployment out of Singapore.