H1 visitor arrivals to Singapore grow by more than 7 per cent

Singapore

SINGAPORE continued to attract more arrivals in the first half of this year, as 9.19 million visitors came to Singapore's shores, up 7.6 per cent from a year ago.

Preliminary estimates from the Singapore Tourism Board (STB) showed that China, Indonesia and India remained key feeder markets, with volumes from China rising 11.4 per cent to 1.73 million.

Flows from Indonesia clocked growth of 4.8 per cent to 1.54 million, and India, 16.5 per cent to around 768,620.

The hotel sector benefited from rising tourism numbers, with hotel room revenue for the six-month period gaining around nine per cent to S$1.94 billion.

Revenue per available room (RevPAR) clocked a near four per cent increase to around S$187 as both the average room rate (ARR) and average occupancy rate (AOR) increased.

ARR climbed 2.2 per cent to about S$218, while the AOR was up 1.6 percentage points to 85.5 per cent.

Of the different hotel categories, economy hotels posted the biggest jump in RevPAR, up 8.7 per cent to nearly S$89; luxury hotels saw the smallest growth of 1.1 per cent to about S$377.

In the hotel industry, the growth in room supply is finally expected to slow down after the boom in recent years, affording hoteliers some relief.

According to industry data, the supply pipeline is expected to clock 2.5 per cent growth this year, before easing further to 0.8 per cent next year and 0.6 per cent in the year after.

The STB also released its report card on the first quarter, which showed that visitor arrivals grew 7.3 per cent in the first three months to 4.6 million visitors, although tourism spend slipped slightly, edging down half a per cent to S$6.7 billion. STB said: "This was due to lower expenditure across some components including shopping, accommodation and food & beverages."

Spend on shopping, accommodation and food & beverages fell by 9 per cent, 13 per cent and 16 per cent respectively.

This was partly offset by increases in sightseeing, entertainment & gaming (SEG), which rose six per cent, and other tourism receipt components (22 per cent), which cover areas such as airfare on local airlines, local transportation and medical tourism.

Excluding SEG, China emerged as the biggest spender in Q1, contributing S$1 billion; Indonesia (S$0.7 billion) and India (S$0.3 billion) followed in second and third place. The STB strips out SEG due to the "commercial sensitivity of information", it said. Together, these three countries generated 39 per cent of tourism receipts.

On the hotel front, hotel room revenue in the first quarter jumped 8.5 per cent to S$1 billion, wile RevPAR rose four per cent on the back of higher ARR and AOR.

After chalking up record highs in tourism receipts and arrivals for the second year running last year, the STB has projected visitor arrivals to rise by one to four per cent, and tourism spend by between one and three per cent this year.

Last year, Singapore welcomed 17.4 million visitors, who spent some S$26.8 billion. Industry watchers say that the tourism industry should benefit this year from a strong pipeline of MICE (Meetings, Incentives, Conferences and Exhibitions) events. Examples include Industrial Transformation Asia-Pacific and the Amway India Annual Leadership Summit, which are slated for the fourth quarter.

Other factors helping bolster growth this year include a pick up in corporate demand for hotels as well as the STB's ongoing efforts to woo visitors from secondary cities in China and India.

But potential downside risks linger, including softening consumer confidence if geopolitical tensions heighten, as well as any weakening in key regional currencies.