Tourism spillover from Mice restart will be minimal: analysts

Singapore

SINGAPORE will allow meetings, incentives, conventions and exhibitions (Mice) events from October, with the attendance cap raised to 250, from the previous limit of 50 people.

The reopening of the Mice sector, which contributed close to 1 per cent of gross domestic product before the coronavirus crisis, was pitched by policy-makers on Monday as critical to Singapore's economic well-being.

Resuming business events "will help maintain Singapore's position as a leading Mice hub and retain critical capabilities, while safeguarding jobs and livelihoods", the Singapore Tourism Board (STB) said in a statement.

But, even while analysts welcomed the move, they warned that the economic spillover to industries such as food and beverage (F&B) services could be negligible for now, as international travel remains limited.

Reopening the Mice sector "essentially allows that segment of the market to at least emerge from a very dark hole, but there are still significant constraints in place", said CIMB economist Song Seng Wun, who described the decision as a baby step.

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Similarly, Maybank Kim Eng senior economist Chua Hak Bin warned that "the multiplier impact from Mice activities to the hospitality, F&B and recreation sectors will be limited, as most participants will be online".

Fewer than 2.7 million travellers arrived in Singapore in the first half this year - barely a quarter of the 9.3 million visitors in the year-ago period.

A pick-up in arrivals could make for a quarter-on-quarter rebound, Mr Song said.

But "for the rest of this year... even though we may see headline visitor arrivals improving, the spillover in terms of tourism receipts will be fairly minimal in the traditional areas" such as F&B spending.

Selena Ling, chief economist at OCBC, told The Business Times that business tourism "may precede the mass-market tourism recovery", but added that the Mice restart will yield only "very muted economic spin-offs for Singapore in the near term".

Speaking at an event held at integrated resort Marina Bay Sands, Minister for Trade and Industry Chan Chun Sing made the point that "we want to continue to strengthen our position as the Mice location of choice".

He added that Singapore will study other markets, as it grows event sizes "from the hundreds to the thousands" safely and sustainably.

Singapore's tourism receipts totalled S$27.7 billion last year. The STB deems business travellers "high-yield visitors", as they spend close to twice as much as leisure tourists.

Meanwhile, Manpower Minister Josephine Teo said new job opportunities have come up in the last six months, "although the hiring demand in tourism was lower than before".

Under the SGUnited Jobs and Skills Package, more than 2,400 roles have been made available in the tourism sector since April, with two-fifths being vacancies for professionals, managers, executives and technicians.

Part of the hiring involves replacing work pass holders, such as Malaysians who left Singapore when their home country enacted movement curbs earlier this year, said Mrs Teo.

"But there is also a very healthy number of job opportunities that are being created because the businesses are having to pivot," she added.

These include digital jobs, such as digital events managers, on the back of a shift to hybrid events that mix virtual and physical activities.

Still, Ms Ling said: "Any sensible policymaker will scale up the physical participation of Mice and tourism events gradually and cautiously; so a multi-month - if not multi-year - transition period is plausible."

UOB economist Barnabas Gan noted that "recovery is likely to be gradual", adding: "Singapore's tourism outlook will depend on the establishment of green lanes and the eventual lifting of quarantine restrictions."