Singapore notches record Q3 tourist arrivals of 4.9m

Singapore

SINGAPORE tourist arrivals rose to an all-time quarterly high for the July to September period this year, driven by higher Chinese demand. However, local tour agencies have yet to see corresponding gains in their businesses from the influx, in part due to changing consumer preferences.

According to data available on the Singapore Tourism Board (STB) website, Singapore welcomed the highest number of international visitors for a quarter in 3Q2019, at 4.9 million. This was a 7.8 per cent increase over 2Q2019's figure of 4.6 million arrivals, and a 3.5 per cent gain on the 4.8 million in the same quarter last year.

"The continued good growth might also be a reflection of STB's sustained efforts in mainland China," says Ms Juliana Kua, regional director for Greater China at STB in a statement to The Business Times. "This year, we have partnered with over 40 traditional travel agencies to reach out to potential consumers in our target 22 cities, as well as launched strategic partnerships with key online travel agencies and platforms like Ctrip, Alibaba's Fliggy, Tuniu and China's travel platform Mafengwo."

Top source market

The previous high was recorded in 3Q2018, at 4.8 million arrivals, based on available STB data dating from as far back as 2008. Travellers from the Middle Kingdom accounted for slightly over 1 million arrivals this quarter, or 20 per cent of total tourist arrivals, making it the top source market for Singapore tourism. Indonesia trails behind at 759,560 arrivals, accounting for 15 per cent of total tourist arrivals during the quarter.

STB's data shows that despite having more tourist arrivals; the average length of stay this quarter remains the same as last year's 3.4 days.

"Chinese tourists are eager to visit metropolitan cities, as their rising affluence brings about opportunities to see the world," says Dr Alfred Wu, Associate Professor in the Lee Kuan Yew School of Public Policy at the National University of Singapore. "The US-China trade war has resulted in their tourists choosing Asean countries over Western destinations. Singapore is a natural choice for them, as we share a common language."

Breaking it down month by month, July was the best month of the quarter, posting 1.8 million in total arrivals. This was followed by August's 1.7 million and September's 1.5 million.

However, local tour operators have not experienced an equal rise in bookings, as Chinese tourists take to the Internet to plan their holidays, allowing for individuals to bypass tour groups altogether.

"With their rising affluence and tech savviness, Chinese tourists are seeking alternatives to Singapore-based tour groups, preferring to travel free and easy," says Alicia Seah, director of public relations and communications at Dynasty Travel, which saw a 10 per cent fall in Chinese inbound volume in Q3. "The greater flexibility in arranging their own itinerary allows for travellers to choose accommodation and attractions as per their preferences," elaborates Ms Seah, "Tour groups mostly appeal to first-time Singapore visitors, from the tier 2 or 3 cities."

As it is, expectations of a boom in October due to the Golden Week holiday in China did not seem to have materialised for inbound tour companies.

Local rival travel agency Chan Brothers Travel reports that although bookings made through their agency has increased 10 per cent from last year, the Chinese demand over the October National Day Golden Week holiday to Singapore remains constant compared to the same period last year.

Dynasty Travel notes a 10 to 15 per cent decline in leisure group tour bookings in October this year, following a 10 per cent booking decline trend seen throughout 2019. Business travel bookings have reportedly increased by 5 per cent this year, backed by STB's initiatives.

Ms Seah states that this decline is also due to competitive destinations such as Thailand, Indonesia, Cambodia, Vietnam and Laos which are relatively more affordable options in South-east Asia, compared to Singapore.

CTrip, an online tour aggregator based in China, notes that Chinese tourists are opting for tour packages that also include Malaysia and Thailand, as add-on destinations account for almost 60 per cent of Ctrip's bookings with Singapore as a destination, with the remaining tour bookings having Singapore as the only destination.

Declining volumes

SingExpress is another local tour group operator that has seen leisure tour group volumes decline.

"Group sizes are becoming smaller on less demand. It used to be 30 to 40 in a group, but that has shrunk to 25 to 30 at most," says Mr Bernard Yu, head of SingExpress Travel's inbound Asia department. "Some reasons are the currency weakness of the RMB, and with Singapore's status as a premium destination, makes it too expensive for some of the travellers."

Rather than rely on windfalls from the peak Chinese tour seasons, SingExpress diversifies across travel segments to maintain bookings over the course of the year. The tour group operates several segments, notably family tours which account for 60 per cent, with the remaining 40 per cent split evenly between business and student travel.

"Business and student travel are evergreen throughout the year, and not tied to peak holiday periods in summer or winter," adds Mr Yu. "The holiday periods are short in China. We see these segments as good potential to tap."

This is in line with STB's strategy to promote Singapore as a top travel destination. Says STB's Ms Kua: "To ensure we have a good spread of Chinese visitors throughout the year, we are creating more reasons for Chinese travellers to visit Singapore. While we continue to promote Singapore as a choice destination for family travel, we are also tapping other consumer segments such as the post-1990s generation."

Other initiatives launched by the STB include tie ups with AliPay and ICBC, the largest bank in China, to encourage post-arrival spending by offering a range of spending privileges and discounts.