Singapore on track to hit tourism target

SINGAPORE - Despite recent economic uncertainty, industry watchers expect Singapore to meet this year's visitor arrival targets of 12 million to 13 million as most of Singapore's tourists come from the Asia-Pacific region.

About 80 per cent of Singapore's tourist arrivals are from the Asia-Pacific region and Indian brokerage firm IIFL believes that, over the next five years, tourist arrivals could register 7.8 per cent compound annual growth rate on the back of rising Asian affluence, ease of connectivity with cities across Asia, and Singapore's positioning as a shopping-cum-entertainment hub, as well as Asia's leading meetings, incentives, conventions and exhibitions (MICE) centre. "This puts Singapore in the sweet spot to continue enjoying the fruits of Asia's rapid economic growth," added IIFL.

The Singapore Tourism Board (STB) projects 12 to 13 million visitor arrivals this year, with S$22 billion to S$23 billion in tourism receipts. Last year, Singapore welcomed 11.6 million international visitors and received an estimated S$18.9 billion in tourism receipts - an increase of 20 per cent in visitor arrivals and close to 50 per cent growth in tourism receipts compared to 2009. Even if the Singapore economy has slowed, average room rates for hotels have gone up by 15 per cent from a year ago, to around S$230. Occupancy levels are also at more than 85 per cent.

Mr Derek Tan, equity research analyst at DBS Vickers, said: "I think we're on track to meet STB's target, given that we are still not even into the peak season yet. Typically the second half of the year is a stronger half for hoteliers - that is where we have the holiday season, we have the Formula 1."

On the negative side, there could be a shortage of hotel rooms. Mr Donald Han, vice-chairman at Cushman & Wakefield, said: "This year we'll probably be looking at about 1,900 rooms that will be in supply. I think overall the net demand that will be coming through from the increase in tourist arrivals would be able to absorb that."

Mr Tan of DBS Vickers added: "Indonesia, China, Malaysia, Australia and India are our main markets. So I would be concerned if there is any going to be any economic slowdown from these five countries. At this moment they are still looking fine in terms of their economic outlook." LINETTE LIM