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Singapore tourism could register only tepid growth in 2016
SINGAPORE'S tourism sector could see as little as zero growth this year, if the global economy remains weak and corporates continue to cut back on travel budgets, said the Singapore Tourism Board (STB) on Monday.
This would extend the lacklustre performance of 2015, when tourism receipts fell 6.8 per cent year-on-year to S$22 billion; that was the first decline in six years, and the lowest overall spend since 2010.
Even in the best-case scenario - STB is forecasting visitor arrivals to expand by 0-3 per cent to between 15.2 million and 15.7 million this year - Singapore will not come close to its target of attracting 17 million visitors by 2015, as the gloomy global economy continues to weigh on business travel and sentiment.
STB chief executive officer Lionel Yeo told The Business Times: "That target was set in 2004, and it was an expression of the level of ambition that STB had to grow the tourism sector.
"Since then, I think, we have doubled visitor arrivals and tourism receipts have grown by about 21/2 times. So I would say it's been a very encouraging and strong performance for tourism since the time the target was set."
When asked whether STB will revive that 17 million target anytime soon, he said it is "not likely". For now, projections are being taken on a year-on-year basis.
Last year, tourism receipts growth fell short of earlier expectations. The official forecast was for receipts to amount to between S$23.5 billion and S$24 billion.
The weaker-than-anticipated outcome came even as international visitor arrivals crept up 0.9 per cent to 15.2 million, as a 2 per cent growth in leisure-visitor arrivals helped offset the fall in the BTMICE (business travel and meetings, incentives, conventions and exhibition) segment.
Mr Yeo, speaking at the statutory board's annual Year in Review media briefing, said: "We took heart from the fact that we saw a growth of 2 per cent in our leisure-visitor arrivals - that gives us some confidence that we're still attractive as a leisure destination."
Still, because the average business traveller spends about twice as much as a leisure visitor, the 6 per cent drop in BTMICE visitor arrivals and their 8 per cent decline in per capita expenditure took a significant bite out of overall tourism receipts.
Mr Yeo stressed that the fall in business travel was influenced by broader economic trends - "something which a destination has somewhat less levers over".
Of the 15.2 million visitor arrivals last year, 2.73 million came from Indonesia - the largest market last year, although it registered a year-on-year drop of 10 per cent.
China followed close behind, with 2.11 million visitor arrivals, a 22 per cent jump from 2014. This, STB said, was due to good growth in Tier 1 and 2 cities' visitor arrivals.
Visitor arrivals from Indonesia, Malaysia, Australia and Japan took a hit - down 10 per cent, 5 per cent, 3 per cent and 4 per cent respectively - as a result of macroeconomic factors such as currency depreciation and an uncertain economic outlook.
In terms of where tourist dollars went over the January-to-September period last year, all major components posted year-on-year declines in tourism receipts, save the food & beverage segment. Even so, that cluster registered anaemic growth of just 1 per cent.
The accommodation component was the worst hit, with a 14 per cent decline to S$3.5 billion due to lower average room rates.
There was an 11 per cent drop to S$3.93 billion in the sightseeing, entertainment & gaming segment, as integrated resorts reported lower revenue.
For the whole of 2016, STB is forecasting 0-2 per cent growth in tourism receipts, at S$22 billion to S$22.4 billion.
It said: "Global economic growth may be hampered by the slower growth momentum of the Chinese and US economies, as well as uncertainties such as ongoing reforms in China and the impact of the normalisation of the US monetary conditions.
"Increasing regional competition will also pose challenges to Singapore's tourism sector."
The sector currently contributes 4 per cent to Singapore's gross domestic product (GDP) and supports some 160,000 jobs. A weak showing by this small but important component of the economy would deal another blow to an already-challenging economic outlook.
Still, STB said that Singapore remains poised to benefit from the projected growth in outbound travel in the Asia-Pacific. It added that the pipeline for business events also continues to be strong.