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The boom years for Singapore’s tourism industry are over, with its pace of growth expected to slow by about half over the next 10 years.
This is because of keen regional competition for the same tourism pie and Singapore’s tight labour market, Second Minister for Home Affairs and Trade and Industry S. Iswaran said yesterday as he unveiled a muted forecast of tourist arrival growth of 3 to 4 per cent year-on-year.
Spending by tourists is also expected to grow at only 4 to 6 per cent over the next 10 years.
This contrasts with the record growth posted between 2002 and last year, when visitor arrivals grew at a compounded annual rate of 6.6 per cent. Tourism receipts also grew at a corresponding 10 per cent in the same period.
But the surge, which coincided with the launch of major projects such as the two integrated resorts and the Formula One Singapore Grand Prix, is “not sustainable”, said Mr Iswaran.
“The growth model that is based solely on sheer quantitative growth is no longer viable,” he told more than 600 people at the Tourism Industry Conference.
“There is a general consensus that we need to reposition ourselves for more sustainable quality growth, of which the focus is on deriving yield from each visitor.”
Last year, Singapore welcomed an estimated 14.4 million visitors, an increase of 9 per cent from 2011. They spent S$23 billion, up 3 per cent from S$22.3 billion in 2011.
This year, tourism receipts are expected to rise moderately, between 2.2 and 6.5 per cent, while the growth in visitor arrivals is forecast to slow to between 2.8 and 7.6 per cent.
The way forward is to attract more big-spending visitors and those who come here regularly, said Mr Iswaran, as he urged the industry to create more content for visitors in the lifestyle and business sectors. One example is the Fort Canning Centre and Black Box Theatre, which the Singapore Tourism Board (STB) and National Parks Board are looking at turning into a museum with modern art, for an Asian audience.
STB’s chief executive Lionel Yeo, who also spoke at the event, said competition is getting tougher. Macau and South Korea have announced new integrated resorts, Bangkok plans to hold an F1 night street race by 2015, and Universal Studios will open in South Korea and Shanghai soon.
“Many of these competitors are going after the same source markets and target segments as Singapore,” Mr Yeo said, adding that the labour crunch will make growth even more challenging.
This is already felt by Chan Brothers Travel. Its chief executive Anthony Chan said the company had to delay plans for a new subsidiary brand targeting private clients because they could not find enough staff to open an office.
There are also worries for the hotels sector, where room inventory is slated to grow by over 20 per cent to 53,000 by 2015.
Said hotelier and restaurateur Loh Lik Peng, 40: “When you have a situation of a larger supply of hotel rooms and a smaller number of tourists coming at the same time, then you are going to have an issue of oversupply of hotel rooms.”
US$1 = S$1.24 ___