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ANALYSIS: SINGAPORE TOURISM in 2011 and 32% in 2010, DBS data show. Combined, China and Indonesia will have made up 30% of Singapore’s predicted 14.2 million total annual visitors in 2012. Fewer MICE events Visitors continue to flock to Singapore for either business or leisure because of its status as a prime financial hub in Asia that also offers world-class hotels, casinos, malls, and theme parks. But business visitors might beg off temporarily in 2013. Business trips to Singapore will likely decline in 2013, an oddnumbered year, which analysts say sees fewer MICE events (meetings, incentives, conferencing, and exhibitions). A notable number of MICE events are held biennially and mostly on even-numbered years, according to an OCBC

research report by analysts Sarah Ong and Carey Wong. Weaker hotel bookings Along with the anticipated drop in MICE events, OCBC expresses a dim outlook for hotel bookings. “Our channel checks indicate that hotel bookings up to Chinese New Year (February 10) are still weak, and we believe that 2013 will see fewer MICE events,” the report says. “With no immediate catalysts to boost tourism numbers dramatically in the near-term, we are cautious in our outlook for 1H13. Corporates have also been tighter with their travel budgets. Luxury and upscale hotels will most likely perform best based on the most recent data trends. “For the first 10 months of 2012, the higher the hotel tier, the stronger the y-o-y growth in the Average Room Rate (ARR)

Visitor Europe & Top 5 Arrivals markets* USA ('m)Visitor Top 5 Europe & Other Year Arrivals markets* USA 7.69 41% 20% regions 2000 ('m) 7.52 7.69 44% 41% 20%20% 39% 2001 2000 7.52 44% 20% 36% 2001 7.57 47% 19% 2002 7.57 47% 19% 35% 2002 6.13 50% 18% 2003 6.13 50% 18% 32% 2003 8.33 8.33 51% 51% 17%17% 33% 2004 2004 50% 17%17% 33% 2005 8.94 8.94 50% 2005 9.75 51% 16% 33% 2006 9.7510.28 51% 16% 2006 51% 16% 33% 2007 51% 50% 17%16% 33% 2008 10.2810.10 2007 52% 18%17% 31% 2009 10.10 9.68 50% 2008 11.63 54% 16% 31% 2010 9.6813.16 52% 2009 54% 15%18% 31% 2011 7.10 54% 14%16% 32% 11.63 54% 1H12 2010 * Top 5 countries are: Indonesia, Ch ina, Malaysia, India and Australia 13.16 54% 15% 2011 7.10 54% 14% Source: STB, DBS Vickers 1H12

Market share by major markets (%) Year

Other regions 39% 36% 35% 32% 33% 33% 33% 33% 33% 31% 31% 31% 32%

* Top 5 countries Indonesia, Ch Malaysia, India Australia Growthare:Indonesia Chinaina, Malaysia Indiaand Australia (Y-o-Y)

Visitor arrivals 6%11% y-o-y 21% in 1H12 10% 2006 grew by Growth (Y-o-Y) 2006 2007 2008 2009 2010 2011 YTD 2012

2007 2% -11% 2008 Indonesia -1% 2009 32% 2010 6% 12% 2011 YTD 2% 12% 2012

-11% -1% 32% 12% 12%

7% -4% China -13% 25% 21% 35% 29% 7%

-4% -13% 25% 35% 29%

Source: STB, DBS Vickers

24 SINGAPORE BUSINESS REVIEW | FEBRUARY 2012

13% 2% 14% -1% 3% Malaysia 19% -6% 36% 19% 10% 10% 1% 11%2% 7%

-1% 19% 36% 10% 11%

12% 11% 8% India 0% 3% 13% 11% 14% -2%

3% -6% 19% 1% 7%

Australia 12% 11% 8% 0% 3% 11% -2%

Singapore’s position as a compelling tourism destination is reinforced by the opening of large-scale attractions such as the Marine Life Park and iconic Gardens by the Bay.

and revenue per available room (RevPAR). For example, luxury hotels registered ARR and RevPAR growth of 8.8% y-o-y and 11.8% y-o-y respectively, while economy hotels registered ARR and RevPAR growth of only 0.6% and 1.1%,” OCBC says. “We think this is attributable to more favourable supply and demand dynamics for the luxury and upscale tiers. The number of affluent visitors coming to Singapore is increasing with the general growth in arrivals, and supply is more stable for the higher-end hotel tiers,” it adds. New tourist attractions While business travel is seen to dip in 2013, leisure travel is all set to boom. An array of mustsee tourist attractions opened in 2012 with several more opening in the next couple of years, further differentiating Singapore as a leisure travel hub. “Singapore’s position as a compelling tourism destination is reinforced by the opening of large-scale attractions such as the Marine Life Park and iconic Gardens by the Bay. We have also hosted another successful F1 Singapore Grand Prix in 2012, as well as announced the extension of the race till 2017,” says STB’s Koh. The DBS report, meanwhile, is optimistic about the opening of new major attractions like the aforementioned Marine Life Park, River Safari, and the International Cruise Terminal in “anchoring Singapore as a regional holiday destination.” Existing attractions are also attempting to draw in more visitors with lavish expansion plans. The Universal Studios, for example, will be increasing its number of rides to 24, 18 of which are unique to Singapore. The Universal Studios theme park says the ride improvements will help it hit its target of 4.5 to 5 million visitors annually. Other attractions estimated to be completed by 2014 include the Kallang Sports Hub, Jurong Lake District, and National Art Gallery.

Singapore Business Review  
Singapore Business Review  

February-March 2013 issue

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