A decline in business travel and MICE activity led to a significant drop in Singapore’s tourism revenues last year.
According to the full-year data from the Singapore Tourism Board (STB), the country generated tourism receipts of SG$22.0 billion (US$15.6bn) in 2015, down 6.8% year-on-year. Visitor arrivals actually increased 0.9% to 15.2 million, but the arrivals from the high-spending business travel and MICE (BTMICE) sectors fell 6%, leading to the drop in revenues.
“We are encouraged by the upturn in visitor arrivals from May onwards that led to a positive growth for the whole of 2015. Of particular note is the 2% growth in leisure visitor arrivals in 2015, which helped offset the decline in BTMICE visitor arrivals. This shows that Singapore remains attractive as a leisure destination,” said STB chief executive, Lionel Yeo.
“As the average BTMICE visitor spends about two times more than the average leisure visitor, the fall in BTMICE visitor arrivals and spending due to companies cutting back on both travel and trip budgets has had a significant impact on our tourism receipts,” he added.
In terms of visitor arrivals, the STB’s efforts in attracting more Chinese visitors appear to be paying off, with a 22% jump in Chinese arrivals last year. Arrivals from India (+7%), South Korea (+7%) and Taiwan (+12%) also showed strong growth, but visitation from neighbouring Indonesia (-10%) and Malaysia (-5%) declined.
In terms of visitor spending, receipts from Japan (+6%) increased, but these gains were again offset by falling expenditure from Indonesia (-21%) and Malaysia (-26%).
“These markets had faced economic challenges and seen their currencies depreciated against the Singapore dollar. Consequently, there were fewer visitor arrivals and less spending from these markets,” the STB noted.
Looking ahead to 2016, STB forecast another year of slow growth, with visitor arrivals expected to rise 0-3% to between 15.2m and 15.7m, and tourism receipts to grow 0-2% to between SG$22.0bn and $22.4bn.
“Global economic growth may be hampered by the slower growth momentum of the Chinese and US economies as well as uncertainties such as ongoing reforms in China and the impact of the normalisation of the US monetary conditions. Increasing regional competition will also pose challenges to Singapore’s tourism sector,” STB warned.
It added however, that the country’s business events pipeline “continues to be strong” and that it will “continue to intensify its marketing efforts by expanding into more secondary cities in Singapore’s top source markets”.