Singapore Tourism: Riding out the storm

In the weeks leading up to Budget 2020, the Singapore Government made no secret of the sudden rush to incorporate stability measures for sectors affected by the ongoing COVID-19 outbreak across Asia.

With Chinese visitor numbers decimated over the Lunar New Year period, the hospitality sector saw a significant drop in tourists, business travellers and MICE visitors – a situation worsened by the fact that Singaporeans were also staying at home to avoid crowded places. Hotels, restaurants, transport operators and retail outlets have all been suffering whether in the city centre, the heartlands or even at Changi Airport.

The Government’s response – in the form of corporate and property tax rebates, wage offsets, temporary bridging loans and reskilling programs for businesses in the aviation, tourism, retail, food and beverage and point-to-point transport sectors – will definitely help alleviate pressing concerns in the short-term.

Whilst it is too early to tell yet how long the travel bans and general unease may last, the latest infection rates give hope in many quarters that the outbreak may have peaked.

If that is the case and ‘normal business’ is resumed by perhaps mid-March, the proposed measures should be enough to help Singaporean businesses ride out the storm. Local spending on transport, retail and food and beverage would quickly pick up again, as would business travel and domestic MICE, and the impact on international MICE – which is often very long-term in event planning – should also be minimal.

The experience of SARS, albeit 17 years ago now, was that the economy recovered very rapidly after two quarters of slowdown, and that the tourism sector bounced back in style.

After Singapore was declared SARS-free in May 2003, visitor arrivals leapt by nearly 50% in the second half of the year and by the first half of 2004 they had reached pre-SARS levels again. In particular, visitors from Mainland China – which has been such a key contributor of our tourism inflows in recent years – rebounded very rapidly. In 2004, the visitor numbers were already 31% up on 2002, which was a quicker return than any of our other key tourism markets.

Hotel occupancy statistics from the same period show a similar trend – occupancy rates exceed pre-SARS levels by October 2003; whilst the retail and food and beverage sectors also rebounded rapidly thanks to domestic consumption as much as international.

So what are the lessons we can draw from the response to SARS? Our tourism sector has shown that it can quickly return to pre-crisis levels and stronger – and that visitors from Mainland China will definitely return in numbers once they are cleared to do so. Our status as an international business, tourism and transit destination, based on innovative experiences, world-class service, top quality cuisine and international accessibility will keep Singapore top-of-mind.

The Singapore Tourism Board (STB) already announced several short-term measures to help the sector by waiving license fees for hotels, travel agents and tour operators and defraying cleaning costs for hotels.

However, STB will have an even bigger role to play in the coming months to help the five sectors recover. Their track record in targeted promotion is exemplary – their campaigns aimed at specific markets, demographics or to promote particular aspects of Singapore invariably hit their mark and drive great results and we can expect a big push in the second half of 2020 to encourage both domestic and international tourism and MICE.

With the Singapore Government, STB and the various industry associations working together with the key players in the industry, I am confident that we will see the shoots of recovery in a matter of months and these key economic sectors will be back to, and even above, their recent growth levels within the year.