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Tourist arrivals in Singapore rose marginally by 0.9 percent to 15.2 million in 2015, while visitor spending declined 6.8 percent to S$22 billion on an annual basis according to data from the Tourism Board as cited in media reports.
The lower visitor revenue is attributed to the sluggish global economy and the strengthening of the Singapore dollar versus other regional currencies, like the Malaysia ringgit, Indonesian rupiah and Australian dollar. Another factor is the stiffer competition for tourist dollars by Singapore and its neighbours.
All of these will make 2016 a challenging year for the industry, said the Singapore Tourism Board (STB).
This year, the agency projects that visitor arrivals could remain unchanged or inch up by 3 percent to 15.7 million, while tourist spending may register a growth of 0 to 2 percent to S$22 billion to S$22.4 billion.
Given the challenging market conditions and lacklustre forecast, coupled with the anticipated oversupply of hotel rooms, analysts say most hospitality players have turned cautious.
Most have adopted a vigilant stance despite the fact that visitor arrivals increased for eight consecutive months from May to December 2015 as compared to the same period in the previous year.
Nevertheless, OCBC expressed preference for Ascott Residence Trust for its resilient extended-stay business model, while the bank chose CDL Hospitality Trusts for its cheap valuations.
According to experts, the problems being faced by Singapore’s tourism market are not new, but there should be a joint effort to tackle these issues.
Aside from exploring new sources of tourists, like secondary cities in India and China, the republic should also focus on how it can showcase its culture and local heritage to attract repeat visitors, said Michael Chiam, a senior tourism lecturer at Ngee Ann Polytechnic.
Local industry players should also review their pricing structures to retain their competitive edge, added Kevin Cheong, Chairman of the Association of Singapore Attractions. This is because other hospitality markets in the region, like that in Malaysia, Thailand and Australia, have cheaper offerings due to their relatively weaker currencies.
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