Tourists are back, but staycations are here to stay

SINGAPORE hotels do not expect to bid farewell to demand from local guests post-pandemic – despite the pick-up in international arrivals, and the recovering popularity of overseas holidays.

Even as borders reopen, Marcus Hanna, managing director of the adjacent Swissôtel The Stamford and Fairmont Singapore hotels, told The Business Times (BT) that staycations are expected to remain important and “we’re still seeing good demand for daycations as well”.

While international guests made up 85 per cent of the properties’ reservations pre-pandemic, “the local demand has always been important to us, even pre-Covid”, Hanna said.

Sashi Rajan, executive vice-president of advisory and asset management for Asia at JLL, noted that industry trends have been normalising, pushing down staycation demand as more locals travel.

But the recovery in international arrivals remains slow, on the back of limited airline capacities and the high premiums on ticket prices. “Local demand is still present, and benefits certain hotels that can better cater to the leisure market,” he added.

Granted, Conrad Centennial Singapore general manager Mike Williamson told BT that “we do see an increase in the number of international business travellers compared to domestic staycation”, with the hotel specifically targeting business travellers in the Marina Bay area.

Ngee Ann Polytechnic senior tourism lecturer Michael Chiam also said that “local hotels no longer need to depend on just staycation revenue”.

“More hotels are moving away from staycation packages and gearing themselves up for the increase in international arrivals,” he added.

The proportion of international guests at Pan Pacific Hotels Group (PPHG) hotels is reportedly up from 10 per cent to as high as 60 per cent.

Similarly, the share of international guests at Millennium Hotels and Resorts (MHR) rose from less than 40 per cent in the first 3 months, to 60 per cent in April. Paul Er, vice-president of sales and marketing for Asia, expects the figure to settle at 70 per cent for the rest of 2022.

And international bookings now make up about 70 per cent of accommodation packages here booked through Trip.com, up from around 40 per cent the previous year, a spokesman said.

Still, June holiday promotions continue to feature deals such as a “pawcation” for pet owners, a children’s entertainment-themed “CoCoMelon family staycation”, and a “shopaholic staycation” with CapitaLand mall vouchers, all at the Fairmont Singapore.

Over at PPHG, deals include a “Tea-cation Relaxation” bundling a room night with an afternoon tea experience. The group launched the package last year to drive staycations, but it was popular enough that PPHG “extended this offer into this year to capture international demand”, according to vice-president of brand marketing and communications Sirinate Meenakul.

Meenakul said: “Notably, although international travel is gradually returning, we also continue to see good local demand for staycations. Hence, the domestic market remains crucial for us and we maintain our domestic appeal by promoting experiential concepts and dining offers.”

The main difference over the past year has been the return of bigger social gatherings, MHR’s Er said, adding that “we have pushed out celebratory and family-oriented packages” to meet this demand. MHR’s latest promotions have included family glamping-themed stays at Grand Copthorne Waterfront and a package with a yacht cruise and dining at Orchard Hotel Singapore.

“Whether domestic or international guests, our packages are targeted at those experiencing pandemic fatigue and really ‘just want to get away’,” Er told BT.

Similarly, a spokesperson for Resorts World Sentosa (RWS) described the resort’s strategy as “inspiring domestic guests to revisit RWS with our new offerings, as well as to compel international guests to stay longer with us” to enjoy “new and differentiated experiences”.

Upcoming product offerings at RWS include a day camp for children at the S.E.A. Aquarium during the June school holidays, as well as tie-in attractions for the Minions 2: The Rise of Gru movie at Universal Studios Singapore, said the spokesperson.

Some 2 years after Singapore’s borders were slammed shut by the pandemic, Changi Airport passenger traffic has already crossed the 50 per cent mark against of pre-pandemic volumes – much earlier than expected – while international visitor arrivals swelled to 294,300 in April.

But the tourism industry still faces headwinds – especially with continued curbs on outbound restriction in mainland China, which was Singapore’s biggest source market for visitors pre-pandemic. For now, other markets are doing the heavy lifting.

“As travel borders around the world become more porous, we are stepping up efforts through our global offices and overseas partners to capture building demand in key markets, including Australia, Malaysia, Vietnam, and the United Kingdom,” PPHG’s Meenakul told BT, while adding that the group has worked with the STB to promote Singapore in overseas trade shows.

Ananth Ramchandran, head of advisory and strategic transactions for Asia hotels and hospitality at CBRE, said that inbound travel has been dominated in the year to date by arrivals from regional markets such as India, Indonesia and Malaysia.

But “our discussions with operators suggests that other Asia-Pacific markets such as Australia are making strong comebacks, as are the UK and selected European markets,” he added.

Williamson of Conrad Centennial Singapore said that most international bookings are coming from the United States, the United Kingdom, and Australia, while Hanna at Fairmont SIngapore is seeing “great demand” from Indonesia, India, and Australia and expects interest to pick up further as Indonesia eases testing rules for returning travellers.

Rajan from JLL also pointed to the scope for recovery once mid- to large-scale events resume more fully and Chinese and Japanese spenders return – which he said was grounds for optimism and will ultimately support “a balanced recovery” of the tourism industry.