Singapore expects to see 15 million to 16 million visitors in 2024, below pre-Covid levels

SINGAPORE’S tourism performance in 2024 is forecast to remain below pre-Covid levels, despite better-than-expected tourist spending in 2023, the Singapore Tourism Board (STB) said in its year in review on Thursday (Feb 1).

In 2024, Singapore is expected to see 15 million to 16 million international visitors, bringing in S$26 billion to S$27.5 billion.

This continued recovery should be driven by improved global flight connectivity and capacity, as well as the mutual 30-day visa exemption between Singapore and China, noted STB.

Yet, the 2024 prediction remains lower than pre-pandemic 2019, which saw a record 19.1 million visitor arrivals and S$27.7 billion in tourism receipts.

It also marks a contrast to STB’s expectations a year ago: that barring unexpected circumstances, tourism activity would recover to pre-pandemic levels by 2024.

Asked about this difference, STB said: “Geopolitical and economic uncertainties have influenced travel sentiment and slowed down global travel recovery. However, 2023’s performance has been encouraging.”

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In 2023, tourist arrivals rose to 13.6 million. This was about 71 per cent of pre-pandemic 2019 levels, and close to the upper bound of STB’s 12 million to 14 million prediction.

The top source markets were Indonesia (2.3 million), China (1.4 million) and Malaysia (1.1 million), with visitor numbers from Australia, South Korea and the United States also recording “buoyant recovery”.

In the final month of the year, international visitor arrivals reversed from four straight months of declines to reach 1.2 million, data from STB showed. This was 12.7 per cent higher than in November, and up 33.1 per cent from December 2022.

Indonesia was the top source market for the month, with 244,340 tourists hailing from the country. It was followed by China (130,206), Australia (112,310), Malaysia (102,688) and India (92,634).

Tourism receipts, meanwhile, are expected to reach S$24.5 billion to S$26 billion for 2023. This is about 90 per cent of 2019 levels, and significantly in excess of STB’s S$18 billion to S$21 billion target.

STB added that for the first nine months of 2023, tourism receipts across all categories of spending have either exceeded or recovered close to pre-pandemic levels.

For the first nine months, the top sources of tourism receipts were visitors from China (S$2.3 billion), Indonesia (S$2.2 billion) and Australia (S$1.5 billion). This excludes receipts from the sightseeing, entertainment and gaming category, which is traditionally left out due to commercial sensitivities.

Bigger spenders

Industry observers agreed that per capita spending picked up in 2023, contributing to the better-than-expected tourism receipts.

“We see that quality of travellers, in terms of per-head spending, improved last year,” said Angela Hanlee, Bloomberg Intelligence senior analyst for gaming and hospitality. Higher air ticket prices might have resulted in fewer low-budget travellers, she added.

Benjamin Cassim, senior lecturer at Temasek Polytechnic, also noted the changed visitor profile. Singapore’s image as an entertainment-and-business destination attracts those with higher per capita spend, while its cost structure has gone up over the past three years, he said.

Singapore could focus on attracting tourists who are prepared to spend more and stay longer, for at least four nights, he added. “This would tie in very well with what Singapore has to offer in terms of high value-added visitor experiences.”

The average length of stay also rose to 3.8 days in 2023, higher than 3.4 in pre-Covid 2019. These longer stays “translates to added opportunities to spend money”, said Cassim.

UOB Private Bank investment strategist Francis Tan highlighted that STB’s projections for tourism receipts in 2024 assume a higher per capita expenditure than its projections a year ago, as well as actual spending in 2019.

Actual per capita spending in 2023 would be between about S$1,801 to about S$1,912, derived from dividing the range of predicted tourism receipts over the number of tourist arrivals.

“I expect us to be at the tail end of revenge spending. Thus, the 2024 per capita expenditure assumption of S$1,625 to S$1,833 is quite a fair value,” he said, also noting China’s slowing economy.

Hotels, Mice and cruises

Singapore’s tourism performance in 2023 was supported by an “encouraging” hotel industry performance driven by stronger demand, Mice (meetings, incentives, conferences and exhibitions) and leisure events, as well as better cruise industry performance, STB said.

In 2023, hotels’ average room rate (ARR) and revenue per available room (RevPAR) surpassed 2019 levels, at S$282 and S$226 respectively. This was even though the average occupancy rate was lower than in the corresponding 2019 period.

Some 3,210 hotel rooms were added last year. The rise in both room rates and supply “automatically pushes up tourism receipts”, Cassim said.

December hotel industry data from STB showed that ARR grew to a three-month high of S$286.41, while RevPAR slipped slightly from the preceding month to S$214.35. The month’s average occupancy rate slid to about 75 per cent – the second lowest this year, behind January’s 70 per cent.

All three measures were down compared with the year-ago period.

ARRs in December were up on month for luxury and upscale categories, but down slightly for mid-tier and economy.

STB also pointed out the steady return of business travel, with Singapore hosting several business events for the first time, and the “robust leisure and sporting events calendar” in 2023.

For cruises, Singapore posted a record 2 million passenger throughput with more than 340 ship calls in 2023.

Manpower has also recovered, reaching 88 per cent of 2019 levels. The total tourism workforce rose to around 72,000 as at September 2023, up from 65,000 in September 2022.

New attractions and enhanced experiences in 2023 also made Singapore more attractive to tourists, said STB, citing Bird Paradise and Sentosa’s electric go-kart course HyperDrive.

For 2024, STB highlighted upcoming hotel openings and new experiences at the two integrated resorts. It also named leisure events such as the Anime Festival Asia 2024, the 2024 Formula 1 Grand Prix, and the Singapore Food Festival. Major Mice events this year include the Rotary International Convention and the Singapore Airshow.