Singapore - Singapore‘s visitor arrivals fell 4.1 percent in June, the steepest monthly decline since the SARS outbreak five years ago, as rising hotel charges deter tourists from Indonesia and Malaysia
The city-state recorded 816,000 visitors last month, from 851,000 in June 2007, the Singapore Tourism Board said in a statement yesterday. Arrivals plunged 8.2 percent in October 2003, when business and leisure travelers shunned the island because of an outbreak of severe acute respiratory syndrome.
Now inflation, a weaker global economic outlook and a stronger local currency are curbing travel plans, putting at risk the government‘s target for a 5 percent increase to 10.8 million tourist arrivals in 2008. Singapore hotel room rates rose 20 percent the past year, ratcheting up costs for travelers from Indonesia, who comprise more than one in six visitors.
“Even those cheap hotels are no longer cheap, especially if you‘re coming from countries where the exchange rate is weaker,‘‘ said Song Seng-Wun, an economist at CIMB-GK Research Pte in Singapore.
Visitor arrivals during the second half of the year may struggle to match the 5.1 million recorded in the first six months because of global economic uncertainty, he said.
The city, scheduled to host its first Formula One Grand Prix on Sept. 28, expects the number of visitors to rise to 17 million, generating S$30 billion ($22 billion) in tourism receipts, by 2015 with new attractions including two casino-resorts.
“While the sector‘s performance may ease now, businesses should take the opportunity to regroup, rethink and prepare for the coming surge of visitors expected in 2010,” Lim Neo Chian, the board‘s chief executive and deputy chairman, said in the statement.
Tourism Slowdown
“The slowdown in the tourism industry may potentially continue into the next few months,” Lim said. “We will continue to monitor the situation closely and where necessary, adjust our strategies or review our targets.”
Singapore‘s dollar has strengthened by about 11 percent against the Indonesian rupiah and 5 percent against Malaysia‘s ringgit during the past 12 months.
The number of visitors from neighboring Indonesia, where inflation reached 11 percent in June, dropped to 153,000 last month, 15 percent fewer than a year earlier, Tourism Board data shows. Arrivals crossing the border from Malaysia, where inflation accelerated to 7.7 percent in June, dropped 11 percent to 53,000.
“Inflationary pressure may be taking its toll on discretionary spending on leisure,” Song said.
Hotel Rates
Hotel room rates in Singapore averaged S$251 last month, up from S$210 in June 2007. The increase helped spur a 7.5 percent gain in hotel room revenue to S$177 million over the same period, the Tourism Board said. The average occupancy rate decreased to 82 percent in June, from 87 percent a year earlier.
Empty hotel rooms will weigh on accommodation rates, making it difficult for hotels to sell rooms for as much as S$1,000 a night during the Grand Prix period, Song said.
“The huge windfall that the hoteliers may have been expecting a year ago may have to be trimmed down,” he said. By Jason Gale
Source: http://www.bloomberg.com/apps/news?pid=20601080&sid=aTjDktEThB3U&refer=asia (July 26, 2008)