Long-term growth seen for travel industry despite short-term headwinds: S Iswaran

WHILE ongoing inflationary pressures may dampen the tourism industry’s recovery in the near term, the long-term growth potential of the industry remains as there is a hunger among consumers for travel, said Transport Minister S Iswaran on Monday (May 23).

“There have been cycles in the tourism industry. Historically, economic cycles have (had an impact). But what we have observed time and again is that it is not so much the volume but the pattern of travel that changes,” he said during a panel session at the World Economic Forum annual meeting.

When the economic circumstances become more challenging, people still travel, but opt for more short-haul flights or regional trips, said Iswaran. For instance, he pointed out, many turned to domestic experiences during the pandemic when borders were closed.

“My own sense is the tourism industry — just from observing it over the last decade or so — is resilient (and) is able to come back,” he said.

Right now, Iswaran noted, the pent-up travel demand that the tourism industry is currently seeing has masked some of the inflationary impact on the economy.

In Singapore, passenger traffic at Changi Airport has already picked up to at least 50 per cent of pre-pandemic volumes — much faster than the authorities had anticipated. “We’re going to have to recalibrate (our expectations) because we can see that the growth momentum is much stronger,” he said.

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“But what this also means, though, is that the manpower issues, the resource constraints, they’re also going to bite. Because it’s one thing to say, ‘I’m going to increase capacity by 50 per cent’, but you can’t just flick the switch. You got to bring the people back, you’ve got to get them trained, you’ve got to get your processes running,” said Iswaran.

Still, he is confident that Singapore can overcome these “transition problems” in time.

As Singapore and the global travel industry continue to recover from the pandemic, Iswaran said the government is also taking the opportunity to reflect on the lessons learnt from Covid-19 and incorporate these into future plans.

For instance, Changi Airport’s Terminal 5, which will soon resume works in the next 2 to 3 years, will incorporate “important lessons from the pandemic”, such as making the airport operations more modular so that it can quickly switch between different operating modes if needed. Sustainability will also be taken into account, he added.

“It’s not about sitting and waiting. We need to take action, but I think the action can be oriented both towards recovery but also long term rejuvenation of the sector,” said Iswaran.