THE lone business traveler has a typically sad routine: finish with meetings, head back to the hotel, fire up the laptop, and work while ordering room service. The tourism chief of Lonely Planet’s number one destination says the challenge is getting them out to spend more.
“How do we entice them to think about some kind of program after the work is done, restaurants to go to, or places of attraction to visit,” said Lionel Yeo, Chief Executive Officer of the Singapore Tourism Board. “We have to see what the touch points are.”
That effort is getting some help: Singapore will become the first Southeast Asian city to get its own Michelin guide in 2016. Celebrity chef Gordon Ramsay this year opened a restaurant at Marina Bay Sands, which houses a casino, hotel and a convention center. The island nation has been seeking international events, and will in February bring back the Singapore Airshow, which attracted more than 146,000 visitors from 125 countries and regions in 2014.
As tepid global economic growth prompts more companies to tighten their travel budgets, Singapore is looking for new ways to boost arrivals and spending. The number of visitors peaked in 2013, following several years of growth spurred by the opening of two casino-resorts in 2010, and the city-state trimmed its 2015 growth forecast last month.
Spending by travelers in Singapore probably won’t match the S$23.6 billion ($16.7 billion) in 2014 because of lower spending from business visitors and gaming receipts at the island’s two casinos, Yeo said in a Nov. 27 interview. The number of arrivals to the island city this year will remain flat at 15 million, he said.
Gloomy World
Singapore’s tourism receipts fell 12% from a year earlier to S$10.5 billion in the first half, as the average occupancy rate at luxury hotels slipped almost 4%, government data showed. The government in March cut its target of 17 million visitors and S$30 billion in tourism receipts for 2015, citing competition from rival destinations.
“When the world isn’t growing as fast, when incomes aren’t growing as fast or the outlook for the world becomes a little bit more gloomy, the headwinds for tourist spending will always be there,” said Wai Ho Leong, an economist at Barclays Plc. “You can offset it with promotions but you should expect some loss of ground.”
Still, business travel spending in the Asia-Pacific region is expected to grow four times as fast as in North America and more than double the rate in Europe between 2014 and 2018, according to a McKinsey & Co. report in October commissioned by the Singapore Tourism Board. The region’s business visitor spend hit $459 billion in 2014, the biggest share globally at 39%, according to the Global Business Travel Association.
Incentive Travel
The Southeast Asian nation is promoting itself as a destination for corporate incentive travel, with companies such as Los Angeles-based nutrition company Herbalife Ltd. bringing about 20,000 of its sales agents to Singapore next year, said Yeo, a career government official who’s been with the elite administrative service since 1996.
Corporate travelers in Singapore and those in town for conferences and exhibitions tend to spend twice as much as holidaymakers, and on average they represent about a third of tourist spending, according to the city-state’s tourism authority, which Yeo has led since 2012.
The government is also seeking new sporting events and concerts it could host in venues such as the National Stadium, completed in June 2014 with a maximum capacity of 55,000. Singapore is hosting the two-day Rugby Sevens tournament in April.
Casino-Spurred Growth
While the city-state has given exclusive licenses to Las Vegas Sands Corp. and Genting Singapore Plc to operate casinos until 2017, the government is keeping all options on the table, Yeo said without elaborating.
Singapore could potentially permit a third casino or more to be built, or allow the existing resorts to be expanded.
The island’s economy surged by a record 15% in 2010, the year it opened the doors to two multi-billion-dollar casino resorts, which spurred a 20% jump in visitor arrivals. Las Vegas Sands’s Marina Bay Sands houses the country’s biggest hotel and convention center, while Genting’s Resorts World Sentosa operates Southeast Asia’s only Universal Studios theme park.
Asian casino operators have seen their takings hurt amid economic weakness in the region, while China’s anti-corruption campaign prompted high-rollers from the country to lay low. In Singapore, Resorts World Sentosa’s gaming revenue fell 5% in the three months ended September, partially offset by a 10% rise in non-gaming contributions, while sales at Marina Bay Sands rose 2%.
“Gaming revenues in the short term may have come down a little bit from their initial years but I would say they are still at good levels,” said Yeo, referring to the two Singapore casino resorts. “What’s encouraging is that their non-gaming revenues continue to grow quite well.” — Bloomberg
