Recovery relies on border restrictions easing

Outlook for the tourism and food and beverage sectors do not look promising for the remainder of 2021.

Over a year into the COVID-19 pandemic, the recovery of Singapore’s hotel and tourism and hotel industries still has a long way to go due to the uneven situations in different parts of the world, hindering international travel, and the relaxation of border restrictions.

The tourism and hospitality sectors have been some of the hardest hit ever since the implementation of the circuit breaker period in Singapore in 2020, as almost all incoming travel to the island state was prohibited. Whilst some businesses managed to continue operating under strict safety measures, others had to shut down for a period of time.

Data from the Singapore Tourism Board (STB) revealed that in 2020, the country saw an 85.7% decrease in visitor arrivals to reach just 2.7 million visitors, with nearly all coming from the first two months of the year when Covid-19 was still yet to take hold. Meanwhile, tourism receipts fell 78.4% to $4.4b over the first three quarters of 2020.

“Singapore’s tourism sector has had to fight for survival in 2020. Our tourism businesses have displayed immense resilience and adaptability throughout this difficult period, reinventing their business models and leveraging technology to find solutions in a COVID-19 world,” STB CEO Keith Tan said.

As of the end of the first quarter this year, at least 45 attractions and 1,686 tour itineraries had received approval to resume their operations.

With domestic travel starting to resume and international travel pending talks between Singapore and other countries, recovery is starting to become more evident, albeit slowly.

According to the Civil Aviation Authority of Singapore (CAAS), travel to Singapore may resume as early as next month for passengers with clear digital health certificates. Through the International Air Transport Association (IATA) travel pass, passengers can obtain and store their COVID-19 test results from accredited laboratories; the app will also help facilitate check-in and on-arrival processes.

CAAS mentioned the collaboration with IATA demonstrated the organisations’ shared commitment to driving the adoption of digital health certificates and restoring international air travel.

"We will continue to explore other solutions that can provide similarly secure and verifiable means of sharing health certificates for safe international travel," CAAS Director-General Kevin Shum said.

The IATA travel pass is undergoing trials in 20 separate airlines and was set to be available for download in the second half of the year. Future developments to the IATA travel pass are likely to include QR code scanning and the inclusion of digital vaccination certificate information.

"Ongoing trials put us on track for IATA travel pass to be a critical tool for the industry’s restart by delivering verified travel health credentials to governments," IATA Director-General Willie Walsh said.

Moreover, Minister for Trade and Industry Chan Chun Sing recently revealed in STB’s Tourism Industry Conference that Singapore planned to top-up the city-state’s Tourism Development Fund by an additional $65.8m, as support for the sector amidst near-term headwinds.

“We remain committed to supporting our tourism sector, to help our businesses and workers build new capabilities, and break new ground,” Chan said.

However, the Ministry of Health continues to assess the status of vaccination both in Singapore and in other countries, noting that more data is needed before they can recommend further easing of border measures.

“Data on the duration of the vaccine’s protection and its effectiveness in preventing transmission has been encouraging thus far. More data is needed to assess if changes to border measures such as testing and stay-home notice requirements can be made for vaccinated individuals," Senior Minister of State for Health Janil Puthucheary said.

Puthucheary added that whilst the agency is in discussions with international counterparts on the mutual recognition of vaccine certificates, most countries have just started their vaccination programmes.

"Border measures will also take into account other factors such as the number of COVID-19 cases and the infection control measures implemented in the source countries. Hence, progress on cross-border recognition of vaccine certification may take some time," he said.

Travel bubbles in the works

Singapore has been discussing the implementation of “travel bubbles” with several countries that are also well on their way to recovery from the COVID-19 pandemic. But while several confirmations were made in March, none have yet had a formal start implemented, due in part to Singapore’s own troubles with the resurging Delta variant.

Transport Minister Ong Ye Kung confirmed that the Singapore government received a new proposal from Hong Kong to implement a travel bubble between the two cities. He noted that Hong Kong's capability to keep the pandemic under good control was a positive development.

The talks between the parties began in late 2020, but were delayed by a temporary spike of cases in Hong Kong, and then later by a resurgence of cases in Singapore itself.

The Ministry of Foreign Affairs also confirmed that Singapore and Australia will set up an air travel bubble, which will allow residents to travel without the need for quarantine. Singapore Prime Minister Lee met with his Australian counterpart on 11 June and both confirmed the two countries were “committed” to relaxing border restrictions, but no timeline or checklist has yet been proposed. Mutual recognition of vaccination certificates and resumption of travel for students and business travellers were the key talking points.

Meanwhile, Taiwan’s Health Minister Chen Shih-chung recently said Singapore could be the next country that Taiwan may form a travel bubble with, citing ongoing discussions between the two. No proposals have been formally made despite this remark.

In December 2020, Singapore lifted restrictions for travellers entering from Taiwan, exempting them from the mandatory quarantine period.

Opportunities for the hospitality sector

Hotels have been allowed to operate since July 2020, subject to the compliance of safe management measures and other guidelines. STB had approved a total of 277 hotels to resume services as of May this year.

They have implemented different strategies to attract more customers and generate revenue under unique conditions, including “staycation” and “workcation” promotions, as well as virtual events. 

STB’s $320m SingapoRediscover vouchers (SRV) scheme has also provided a boost for hotels, attractions, and tours. The organisation’s latest data revealed that over 300,000 Singaporeans had used the vouchers to make bookings, having spent $35.9m in SRV redemptions and out-of-pocket payments.

The SRV scheme is part of the SingapoRediscover campaign launched in July 2020 by STB, Enterprise Singapore, and Sentosa Development Corporation.

Meanwhile, Singapore has greenlighted operations of its homeported cruise lines—Genting Cruise Lines and Royal Caribbean International—with enhanced safety protocols in November 2020, under the “Cruise to Nowhere” pilot initiative.

STB recently mentioned that the city-state now accounts for one-third of the world’s cruise travellers amidst standard safety protocols.

To date, over 120,000 citizens have taken the “Cruises to Nowhere”. There is also a higher demand for sailings as vaccines begin to roll out and international travel proves to be impractical, with the aforementioned cruise lines extending their sailings to October 2021.

“Royal Caribbean’s 30-plus sailings in Singapore offer a real-life, validated model of how cruising can be a unique, safe vacation beyond what many other travel options can offer," Royal Caribbean International President and CEO Michael Bayley said.

Similarly, STB has begun accepting applications to pilot meetings, incentives, conventions, and exhibitions (MICE) events in October 2020, allowing up to 750 attendees starting 24 April this year.

The agency said MICE and leisure event organisers also had to adapt, innovate, and leverage technology to reimagine what events would look like in a COVID-19 environment.

“Over the past year, we have been encouraged that MICE events continue to pick Singapore as a host destination. This shows that our efforts to progressively resume MICE events in a safe, trusted, and innovative way are paying off. Our industry has shown the way in piloting new solutions that prioritise safety without compromising the event experience,” Tan said.

Repositioning for the future

Recovery for the tourism and hospitality industries in 2021 seems to be unpromising despite the development of vaccines and the gradual resumption of many related businesses. STB forecasts that tourism receipts and visitor arrivals will remain weak this year, as a mass leisure travel and traveller confidence in Singapore take more time to return than had first been anticipated.

Tan noted that whilst international travel is unlikely to resume in a major way in 2021, STB will stand together with industry partners to prepare for recovery and to build a more sustainable future for tourism.

“STB remains confident in Singapore’s position as one of the world’s safest and most attractive leisure and business destinations, and the long-term prospects of Singapore’s tourism sector,” Tan said.

The agency added that it will continue to support tourism businesses to innovate in order to meet evolving consumer needs and emerging travel trends once cross-border travel resumes significantly.