Singapore’s visitor arrivals at new high in September, but tourism recovery is slowing

THE momentum of international visitor arrivals in Singapore appears to have slowed down in recent months, but analysts believe the city-state is on track to receive some 6 million visitors this year, within the upper band of the official forecast.

Visitor arrivals in September hit 778,141, from 728,744 in August, recording eight straight months of growth, according to data from the Singapore Tourism Board (STB). August logged a more modest increase of 2,142 arrivals, compared with July. (*see amendment note)

September’s figure represents a new high in the Republic’s post-pandemic recovery, even if it is about half the 1.46 million visitors recorded in September 2019, before Covid-19 hit.

It is also fairly modest, analysts told The Business Times, considering the slew of high-profile international events held in September, such as the Formula One race.

Calvin Li, head of transaction advisory at JLL Hotels & Hospitality Group, said: “Despite the F1 Singapore Grand Prix having a record-breaking 302,000 attendees, most of which may have been driven locally, the low number of visitor arrivals in September 2022 relative to September 2019 continues to indicate how this recovery still has significant room to grow.”

He added that it also reflects the impact of global and regional macroeconomic challenges, and that the recovery of visitor arrivals may remain “muted” until these are eased.

Govinda Singh, executive director for Asia hotels and leisure at Colliers, said that other mitigating circumstances may also have contributed to the performance.

“It is likely that visitors who had previously looked to visit Singapore were unable to do so due to the price of airlift and hotel rooms, especially with the build-up to the F1 and other events around it, which led to the spike towards the end of the month,” he said.

Still, visitors to the F1 race likely brought a lift to visitor numbers in September, which is traditionally a lull period for tourist arrivals to the Republic, noted Wong Xian Yang, Singapore head of research at Cushman & Wakefield.

Geraldine Wong, a property analyst from DBS, said that the impact of the event may spill over into October’s numbers, since the F1 was held on a weekend that straddled two months.

STB in July said that it was expecting 4 to 6 million arrivals this year; 3.7 million visitors entered the country in the first nine months of the year.

Analysts believe that the current trajectory suggests full-year numbers could land in the upper end of STB’s forecast, but added that it would be challenging for arrivals to exceed 6 million this year.

Colliers’ Singh said: “It is unlikely that Singapore will exceed the target of 6 million visitors this year, given that more destinations have re-opened or are re-opening, as well as the uncertainty in the recovery for business travel, given the negative business sentiment.”

One reason is that China, which accounted for nearly 20 per cent of total visitor arrivals in 2019, remains closed.

More tourists are also likely to head to Japan, especially with the draw of a weak yen. Some watchers believe that the reopening of East Asia, which includes Taiwan and, to a limited extent, Hong Kong, would slow the pace of recovery by Singapore’s tourism.

“We expect Singapore to still reap some benefits from Hong Kong even as it re-opens, as the ‘0+3’ policy is likely to attract more outbound visitation,” Singh said. “We can expect to see a further slowdown in Singapore’s growth in visitation when Hong Kong eventually implements a ‘0+0’ policy.”

Wong from Cushman & Wakefield also expects East Asia’s reopening to weigh on Singapore’s tourism recovery, as tourists would have more destinations to choose from in Asia.

“That said, Singapore remains a safe and comfortable option for tourists, and has largely returned to pre-Covid normalcy, with mask wearing no longer mandatory in most public settings,” he said.

On the other hand, DBS’ Wong believes that the increase in inbound travellers from Singapore’s top source markets would outweigh international travellers choosing to travel to the newly opened markets.

JLL’s Li noted that Singapore’s tourism hotel recovery has been driven primarily by corporate travellers, adding that he is expecting this segment to continue growing in the last quarter.

“The business on the books for most hotels remains healthy in the last quarter, which we consider to be reflective of the overall recovery trend in Singapore,” he said.

*Amendment note: An earlier version of this story stated that there were 752,305 international visitor arrivals in September, based on data provided by Singapore Tourism Board (STB). STB has since clarified that the correct figure should be 778,141.