Will Jewel be Changi's game-changer?

Last week, Changi Airport's shiny new Jewel offered a sneak peek to excited visitors who came in floods to shop, eat and see the sights under the distinctive dome. While the S$1.7 billion project started out in 2013 as a means of capacity expansion, airport operator Changi Airport Group took it further, planning and developing a huge retail and tourist destination with attractions under the same roof. The aim was to strengthen Changi's position as a leading regional air hub amid intensifying competition, and enhance its appeal as a stopover destination for travellers, while at the same time creating an appealing new go-to spot for local residents.

To that end, the joint venture between CAG and property developer CapitaLand built up not just retail and dining space but also attractions, a Yotel hotel as well as aviation facilities across 135,700 square metres of space.

As an attraction - or perhaps a distraction - for travellers landing at Changi, Jewel could go a long way in exciting the senses or soothing the nerves of those passing through.

Hung Jean, chief executive officer of Jewel Changi Airport Development, says: "Jewel will be Singapore's newest tourist destination that will enhance the travel experience for the millions of passengers passing through Changi Airport."

The International Air Transport Association's (Iata) regional director (airports and external relations) for the Asia Pacific, Vinoop Goel, believes that Jewel is unique. "While there are many airports around the world which have commercial facilities in the vicinity of the airport, none are of the scale and level of integration with the passenger terminal buildings that we see with Jewel."

While many factors go into the making of travel plans - such as the cost of the ticket, the airline, flight timing and airport facilities - Jewel could potentially tip the scale in Changi's favour when all else is equal, he points out. And a more attractive Singapore hub is a win for airlines too.

According to a Singapore Airlines spokesperson, CAG engaged airlines during the development of Jewel. The spokesperson adds: "We will, of course, continue to work together to improve the experience once Jewel opens."

Transport specialist Professor Terence Fan from Singapore Management University reckons that Jewel will provide one more reason for passengers to travel via Singapore.

Prof Fan says: "Changi is trying to make transiting through it a delightful and memorable experience, rather than a perfunctorily efficient one."

The dome-shaped Jewel - built on the site of what used to be Terminal 1's open-air car park - is right by Terminal 1 and connected to Terminals 2 and 3 by air-conditioned travelators. The walk from Terminals 2 and 3 takes about five to ten minutes.

Passengers likely to visit Jewel include travellers who have time to spare but aren't keen to leave the terminal, children and the elderly, passengers looking to stretch their legs and those with delayed flights, he adds.

Yet another mall?

Designed by the architect behind the Marina Bay Sands, Moshe Safdie, Jewel houses shops and food & beverage (F&B) outlets filling 53,600 sq m of retail space, including New York burger joint Shake Shack and fast-food chain A&W.

Key attractions include a 40m-tall indoor waterfall and an indoor garden dubbed Forest Valley, with one of Singapore's largest indoor collections of plants.

At the topmost level, the 14,000 sq m foliage-filled Canopy Park, cleverly targeted at the young and/or the restless, will feature attractions such as giant slides, bouncing nets and mazes, all of which will open on June 10. Visitors can also dine in the Park.

Ngee Ann Polytechnic senior lecturer in tourism Michael Chiam says that Jewel could be a game changer. Most airports are built for functionality - namely to provide commercial services to airlines and their passengers, he notes.

"With Jewel, Changi Airport is attempting to provide visitors recreation and entertainment experiences within the airport vicinity," Mr Chiam says. "For those transiting through Singapore, it will give them good reasons to venture out of the transit area to explore Jewel and to have a glimpse of Singapore. Hopefully, they will come back and visit Singapore again."

Even as CAG estimates that about 40-50 million visitors will throng Jewel each year, it is betting that 60 per cent of those visitors will be Singapore residents.

"Will (Jewel) likely be successful? For any attraction to be successful, it must have the support of its local residents as well as tourists from overseas," Mr Chiam says, adding that Jewel gives Singaporeans more reasons to visit the airport too.

Nearly a quarter of the 280 or so retail and dining options in Jewel are new-to-market brands, including Läderach Chocolatier Suisse, US ice cream chain Emack & Bolio's, Norwegian restaurant chain Pink Fish, Malaysian bakery Lavender, Spanish retailer OYSHO and a Pokémon Center retail store.

Local brands constitute around half the total number of stores and outlets in Jewel; among them are souvenir store Supermama, local confectioner Bengawan Solo, and a retail/F&B concept by Tiger Beer called Tiger Street Lab.

A so-called Duplex Boulevard houses large-format stores, while Jewel's retail mix will combine both premium brands and high street retailers such as Zara.

Analysts say that the dearth of big, new malls in the East will likely have locals making a beeline to Jewel to shop and dine, especially in the early months of its launch. Anecdotally, many Singaporeans - especially those with young children - already make regular trips to spend time at the airport.

Wendy Low, head of retail at Knight Frank Singapore, says: "We believe that this will be a game changer for the international retail scene. The success of Jewel will likely spur similar developments in other countries as well."

Knight Frank believes that many malls, especially those located in the eastern region, will see their footfall drop, at least for the first six months before stabilising.

Ms Low adds: "Notwithstanding, the trade-mix will not be the same and visitors to the regional malls are likely to have different motivations from those visiting Jewel."

While there have been criticisms from some quarters that Singapore doesn't need yet another new mall, Jewel fulfils many of the airport's practical needs.

With the average transfer time for passengers at Changi at about three hours, passengers need a place to occupy their time until they board. Jewel will help decant passenger flows away from the operational terminals, freeing up space in the existing terminals for other travellers who need to check in and catch flights, especially during peak hours.

Early check-in counters and kiosks at Jewel also make things easier for passengers who arrive at the airport more than three hours ahead of their flight. For passengers flying into Singapore and continuing their journey on a cruise ship or ferry, Jewel will facilitate baggage transfers and ground-transportation to the maritime terminals. A lounge on Level 1 will give these passengers a place to relax, shower, grab a bite or nap before the next leg of their journey.

"Travellers are becoming savvier and are planning their own itinerary in the aspect of flight connections," says Jewel Changi Airport Development's Ms Hung.

"These passengers tend to have longer layover periods at airports to ensure that they have sufficient time to collect their baggage and check in to their next flight. As a result, they are also more discerning when selecting airports that they wish to transfer or transit in."

Staying ahead, not standing still

According to Corrine Png, AIA Group's regional head of equities research, the boost in non-aeronautical revenue and profit margin that Changi will derive from Jewel will enable it to keep its long-term aeronautical charges - such as take-off and landing fees - competitive vis-a-vis other airports in the region.

"However, Jewel is not a magic pill," says Ms Png. "For Singapore's air hub to remain competitive for both transit and origin & destination traffic, Singapore needs to continue to work on expanding trade and transport links with other countries, attract more foreign investments and support local enterprises to go global (and) increase the operating efficiency of the airport ground operations."

Still, Ms Png reckons that Jewel has managed to up the ante with its "wow" factor, thanks to its state-of-the-art architecture and features such as the world's tallest indoor waterfall, and this may prompt other airports to try and beat Changi at its own game.

"Jewel... is expected to attract a significant number of transit passengers and tourists thanks to its strategic location and easy accessibility from the main airport terminals," she says.

Iata's Mr Goel too expresses hopes that the increased revenues will allow CAG to lower charges for airlines, given the hyper-competitive environment that airlines operate in and the "razor-thin" profits they earn. Reduced airline costs, he points out, allow airlines to grow the Singapore hub by adding destinations and bumping up frequencies.

The sharpened focus on retail isn't exclusive to Changi either, SMU's Prof Fan notes, pointing out that many airports worldwide have been ramping up their retail offerings.

He says: "In Asia, Seoul Incheon Airport and Hong Kong International Airport have plans or already (have) existing retail outlets in the vicinity of the airport. Dubai and Doha have built new airports altogether with more retail space. Even smaller airports like Helsinki are demolishing existing facilities to make way for more retail experience."

Hong Kong's Sky City, which is positioned as an integrated destination with retail, F&B, entertainment, hotels and offices, will be opened in phases over 2023 to 2027.

Competition in the region, it goes without saying, is heating up. Traditionally, airports in Hong Kong, Bangkok, Dubai and South Korea are seen as Changi's biggest competitors. But that is changing too, with Chinese airports increasingly posing a bigger threat, such as the new Guangzhou Baiyun Airport and Beijing's mammoth second international airport, Daxing International.

Daxing Airport is due to open its doors later this year and is gunning to be one of the world's largest, with at least seven runways and a capacity of 100 million passengers.

The airport could also serve as an attractive hub for a number of routes, including the so-called Kangaroo route which links Australia and the United Kingdom, and could potentially poach passenger traffic away from hubs such as Singapore and Dubai.

Another potential threat includes the introduction of non-stop services as next-generation aircraft make it more feasible to operate such ultra-long-haul routes profitably.

For instance, Australia's flag carrier Qantas is eyeing non-stop flights out of Sydney and Melbourne to London and New York by 2022 in an ambitious programme known as Project Sunrise. Currently, Qantas operates its daily Sydney-London flight through Singapore.

Perhaps on its own, Jewel may not be enough of a reason to draw passengers to Singapore, says Mr Chiam. "(But Jewel) should be taken in a broader context, such as the efficiency of the airport, its connectivity and other tourism offerings in Singapore," he emphasises.

With an eye on expansion and easing traffic congestion, Changi is already developing a third runway, due to come onstream in the early 2020s, as well as its biggest terminal yet, Terminal 5.

The behemoth project will allow Changi to handle an initial capacity of 50 million more passengers per year when it opens its doors in around 2030, boosting the airport's total passenger capacity to at least 135 million passengers annually.

At the same time, it is upgrading its existing terminals such as Terminal 2, which will undergo renovations starting year end and add additional capacity.

This aggressive expansion comes on the back of expectations that Changi's passenger traffic will grow at a clip of 3-4 per cent per annum over the next two decades, after a record 65.6 million passengers breezed through the airport in 2018.

As airline boss and entrepreneur Richard Branson put it, to stand still is to go backwards.

Widely acknowledged as one of the world's best airports, Changi is not standing still, and Jewel is part of its broader efforts to keep the flag flying high in the years to come.