19
ANNUAL REPORT 2014
SINGAPORE TOURISM MARKET
According to STB, international visitors arrivals to Singapore
in 2014 declined by 3.1% yoy to 15.1 million due to the
sharp drop in China visitors over the period from January to
September 2014. STB attributed the decrease in numbers
to events relating to the disappearance of flight MH370,
abduction of Chinese visitors in Sabah, political unrest in
Thailand and the tightening of tourism law in China which took
effect in October 2013. These factors all had a dampening
effect on Chinese travel to the region. Based on month
on month numbers from STB, the decline in visitor arrivals
seemed to be levelling off as visitors from China returned to
positive yoy growth in the last quarter of 2014.
Based on STB statistics on the geographical breakdown
of annual international visitor arrivals, Indonesians (20.0%)
formed the biggest share followed by the Chinese (11.4%),
the Malaysians (8.2%) and the Australians (7.1%). These four
market segments constitute 46.7% of total market share but
had seen yoy decline in arrival numbers. The drop is most
significant for the Chinese where arrival numbers declined
by 24.2% yoy while the rest of the market segment had seen
decline of not more than 5% yoy. In contrast, visitor arrivals
from Hong Kong, South Korea and Vietnam saw strong
double digit yoy growth rates of 16.8%, 13.7% and 11.5%
respectively but the increase from these markets was not able
to make up for the decrease in the top four market segments.
Singapore received S$23.5 billion in tourism receipts from
15.6 million visitors in 2013. STB’s preliminary estimate
indicated that tourist spending in 2014 could be maintained
at S$23.5 billion notwithstanding visitor arrivals having fall
short of the earlier projection of 16.3 to 16.8 million. STB had
further indicated that the 2015 target of 17 million visitors and
S$30 billion in tourism receipts will not be met.
Nonetheless, STB is optimistic about tourism growth
prospects in the medium term. This is also in line with United
Nations World Tourism Organization’s forecast that the
strongest tourism growth will be seen in Asia and the Pacific
and visitor arrivals to Asia are expected to increase at about
5% per year to 2030. Moving forward, STB expects tourist
spending to grow at 4% to 6% per annum in the next decade
compared to a compound growth rate of 13% between 2003
and 2013.
The growth momentum is attributed in part to the following
reasons. Firstly, the proliferation of low cost airlines in Asia,
resulting in affordable air travel to a wider population.
Secondly, the region growing Asian middle class with
higher disposable income, leading to higher propensity to
travel. Thirdly, the addition of major tourism projects like
the two Integrated Resorts and the hosting of major events
of world-wide appeal such as the Formula One Singapore
Grand Prix and Women Tennis Association Championship
("
WTA
"). Singapore’s appeal has been validated by
international sources. Lonely Planet has named Singapore
as top destination among countries in Best in Travel 2015.
Singapore is also ranked top in Asia and 10th overall in
the World Economic Forum ("
WEF
") Travel and Tourism
Competitiveness ranking for 2013.
Singapore’s tourism landscape will continue to be enhanced
through new additions and soft programmings such as the
Singapore Sports Hub which opened in June 2014 and the
WTA Championship which was held in October 2014. The
WTA event had attracted more than 100,000 attendees to the
event and is expected to net S$15 million from each of the
five instalments.
Apart from leisure and holiday makers, business travellers for
MICE are also drawn to the many state-of-the-art venues that
the city state offers. Singapore has retained its position as the
leading meeting city and country in the world according to
the Union of International Associations ("
UIA
") 2013 Global
Rankings. Named Top International Meeting Country for the
third year running and Top International Meeting City for the
seventh consecutive year, Singapore has once again been
recognised as a choice international meeting destination.
MICE visitors will continue to contribute strongly to the
international visitor arrivals number given the sustained
strong interest on the growing Asia market and Singapore is
poised to capture a slice of this positive trend.
HOTEL MARKET PERFORMANCE
Despite the operating environment becoming more
challenging from declining visitor arrivals and increased
competition, Singapore hotels still saw considerably healthy
demand in 2014. According to STB, the average occupancy
rate ("
AOR
") in 2014 stood at 85.5%, marginally lower than
the 86.3% from a year ago. Average room rates dipped
marginally by 0.2% from a year ago while RevPAR, declined
by 1.1% yoy. Revenue performance is affected by increased
competition due to additional supply of hotel rooms in the
market, uncertain geopolitical tensions, disappearance of
MH370 and strong Singapore Dollar in 2014.
Performances of the ARR for hotels weremixed in 2014. Luxury
and Economy Tier hotels saw higher average ARR while
Upscale and Mid-Tier hotels achieved lower ARR compared
to a year ago. Luxury hotel current occupancy rates stood at
MARKET REVIEW
Singapore Hotel Property Sector as of 1 March 2015
