Regional markets tipped to lead recovery in 2010

The opening of the two Integrated Resorts, an economy on the mend and pent-up corporate and leisure demand augur well for tourism in Singapore and its ASEAN neighbours.

Things could be looking up for Singapore in the new year with its two Integrated Resorts opening, a development that Tiger Airways' CEO Mr Tony Davis says cannot be underestimated in their ability to attract visitors.

This coupled with an economy on the mend, as well as pent-up demand from the corporate and leisure sector, could augur well not only for Singapore, but the rest of the ASEAN countries in 2010.

Growing travel demand in the region

The ASEAN Tourism Forum, ASEAN's largest travel trade fair, to be held in Brunei from 21 to 28 January, should prove to be a good test bed to gauge business prospects for the year.

There is most optimism over the intra-regional markets, which are seeing a quicker pace of recovery than the long haul segment.

Ms Judy Lum, Vice President of Sales and Marketing for Tour East, says that for one, the impending opening of the two Integrated Resorts has stirred excitement in the regional markets, which could very likely lead to "a good recovery from regional markets."

She says that while long haul tour operators are upbeat, they are also cautious. Ms Lum explains that they are concerned about "over-zealous hoteliers, who are looking at bringing back their glory days of 2007 and 2008 rates' levels. In fact, a slow recovery is expected but for us, it is at least a recovery."

Kevin Croley, Senior Vice President of Sales and Marketing for the Pan Pacific Hotels Group, sees a pick-up in visitor arrivals with the fruition of pent-up demand in both the corporate and leisure sector. "With our four hotels, we anticipate the same, especially with the great value deals such as 'SuperSaver' and 'Give Me A Break' promotions that we launched in December 2009."

IRs to increase travel within the region

Moreover, Mr Croley believes that the headlining events and openings of new attractions such as Marina Bay Sands® and Universal Studios® in 2010 will definitely fuel incremental visitor arrivals both from the region and long haul markets, adding, "We anticipate that the region will benefit greatly from Intra-Asia Pacific travel flows as well as that from long haul markets, particularly North America and Europe."

In the past years, Ms Lum has been working hard to diversify Tour East's markets from long haul and has been chipping away at India and China. "From the look of things, the Indian market may just outperform China for Singapore for 2010.  Nevertheless, the strongest regional market to contribute to the arrivals to Singapore will be Malaysia and Indonesia for 2010."

Mr Croley also agrees that regional tourists are expected to make up the bulk of new demand, particularly those within the 5-hour air-travel zone, such as ASEAN, China, India and Australia.

Competing with neighbours

In the long haul segment, ASEAN's biggest competitors in 2010 will be the Middle East - countries such as Abu Dhabi, Qatar, Oman and Iraq, which exhibited at the World Travel Market. "Even I want to visit Iraq," says Ms Lum.

Air fares on Middle Eastern carriers are relatively competitive. "They have a great new product and many long haul travellers do not mind spending a short holiday as the airlines fly via these cities.  Additionally, with Dubai in such a precarious state, I am sure there will be huge plans in store to attract tourism to these regions to ensure Dubai recovers, thus expediting a tourism boom in these regions," she adds.

Mr Croley also observes that "While intra-Asia Pacific travel will greatly boost tourism and tourist numbers for ASEAN, growing domestic tourism, in particular for countries like China, Japan, India and Australia - also ASEAN's biggest competitors for long haul travellers - has been growing steadily.

"These countries have seen domestic tourists outnumbering tourist arrivals - For China and India, domestic tourism has been growing at more than double the rate of their international arrivals. The challenge for ASEAN tourism therefore is how to capture these domestic flows - i.e make it more attractive and cost-competitive for these travellers to travel out of, instead of within their countries," he adds.

2010 holds long-term promise for the industry

Ms Lum also emphasises that it is important that suppliers, especially hoteliers, understand where the recovery is coming from and " if they want to go for the short kill or the long term.  As DMCs we need to manage this change cautiously in order not to let good long term business slip away from Singapore like they did in 2007 and 2008."

Mr Croley believes that the two IRs will bring more benefits than competition, as they are likely to draw new visitors and demand to Singapore, who would otherwise not have considered the country as a convention or leisure destination.

"While the hotels at Marina Bay Sands could potentially compete with hotels in the Marina Bay area for the convention business, the competition will be in the corporate business space, and thus the impact on our other hotels, such as Pan Pacific Orchard, PARKROYAL on Beach Road and PARKROYAL on Kitchener Road, is likely to be limited," he explains.