RTS Link could lead to S$290 million net increase in outbound spend from Singapore annually: study

[SINGAPORE] The upcoming Johor Bahru-Singapore Rapid Transit System (RTS) Link could result in a S$290 million net increase in outflows annually for Singapore, or 0.4 per cent of the country’s total retail and F&B sales in 2025.

Singapore consumers are projected to spend S$1.05 billion more in Johor Bahru (JB) each year, with improved connectivity on the back of the RTS. Visitors from JB, conversely, are expected to contribute an additional S$756 million annually to Singapore’s retail and F&B businesses.

This is according to a study on the impact of the RTS Link on Singapore’s retail and F&B sectors released on Thursday (Jul 16). It was jointly commissioned by the Singapore Business Federation (SBF), Restaurant Association of Singapore (RAS) and Singapore Retailers Association (SRA).

The study estimates that in 2025, S$1.7 billion in outbound spend was offset by S$1.3 billion in inbound spend.

It projects that the RTS Link will add 11.2 million annual round trips from Singapore to JB, and 3.3 million JB-Singapore round trips annually. This is equivalent to an estimated daily ridership of 39,700 trips.

Using current transport modes, pre-RTS, there were about 19.4 million annual Singapore-JB round trips; and vice-versa, 5.9 million.

Competition and opportunity

For Singapore’s retail and F&B businesses already grappling with manpower, cost and rental pressures, the RTS Link is expected to heighten competition, SBF, RAS and SRA said.

The study projects a 51 per cent increase in outbound trips by Singapore consumers seeking value, with groceries accounting for the largest share of outbound spend, followed by drug stores, dining and beauty.

“Regions outside the north are expected to feel a greater net impact, as the north already sees higher outbound spend pre-RTS,” they added.

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But the RTS Link could also result in more inbound visitors from JB, especially for premium retail, entertainment and major lifestyle events.

Some 34 per cent of JB respondents intend to visit Singapore for events post-RTS launch, up from 24 per cent today, the study found. Meanwhile, annual visits by public transport users could increase by 57 per cent on average.

JB visitors indicated they would switch from driving to the RTS, noting a preference for overnight stays and spending on entertainment.

“RTS will also spur more existing public transport users to travel with friends to Singapore for shopping,” SBF, RAS and SRA said. “Recreation spending is also projected to double post-launch, driven mainly by events and entertainment.”

Focus group discussions reinforced concerns that the RTS Link would accentuate competition from JB, the three parties said.

This is especially in price-sensitive segments such as groceries, pharmaceuticals and beauty services, where lower prices across the border are already influencing consumer spending.

The trade associations said businesses agreed that beyond competing on price, they would need to differentiate through service quality, unique customer experiences and locally distinctive offerings.

The participants also flagged persistent manpower, compliance and cost pressures that limit their ability to innovate and scale.

Small and medium-sized enterprises, particularly worried about adapting as quickly as larger operators, called for more support to strengthen competitiveness and capture new opportunities from increased cross-border flows, they said.

Industry, government support needed

Based on the findings, SBF, RAS and SRA identified three priority areas for action, and outlined 10 policy recommendations.

First, the industry and government should stimulate local spend through new and expanded voucher schemes and support for stronger offerings, especially in categories and locations most exposed to cross-border substitution.

Second, they should encourage longer stays and more spending in Singapore from RTS-enabled tourists, by strengthening its destination appeal for experiences, events and higher-value consumption.

This can be done through leveraging mega events, decentralising event infrastructure, reinventing night-time offerings, enabling cross-border offerings and extending tax refunds.

Finally, they should address structural cost pressures and support new operating and business models for retail and F&B operators, to help them adapt and seize new opportunities in a more integrated Singapore-Johor corridor.

This includes supporting asset enhancements such as through targeted incentives, facilitating cross-border optimisation, easing short-term manpower constraints such as reviews of foreign manpower policies, and encouraging sustainable and adaptive rental approaches.

The study also underscores the need for stronger collaboration among trade associations, landlords, tourism stakeholders and government agencies, to help businesses better respond to changing trends and increased connectivity, SBF, RAS and SRA said.

SBF CEO Kok Ping Soon said the RTS Link will reshape travel, shopping and dining across Singapore and JB, adding: “This shift is structural, not incremental.”

RAS president Benjamin Boh said businesses must be empowered with manpower agility and operational flexibility, to capture both local and tourist spending.

SRA president Ernie Koh anticipates “a measurable shift in consumer behaviour” when the RTS connects to Singapore’s MRT network.

He said he looks forward to government mitigation measures such as increased manpower flexibility and support over the next three to five years, even as retailers pivot towards experiential concepts and malls “curate tenant remixes”.

The study, conducted in March, surveyed about 1,700 respondents in Singapore and 400 respondents in Johor. It excludes JB residents who work in Singapore, to capture the behaviour of leisure travellers only. 

It draws on data sources including Mastercard historical transactions, consumer surveys, government statistics, industry consultations and focus group discussions, desktop research, and a modelling framework.