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Ms Aw Kah Peng, Chief Executive, Singapore Tourism Board, addressing issues raised during a panel discussion at the Tourism Industry Conference.
The news out there may be bad, but the TIC, organised by the Singapore Tourism Board (STB) last month, was determined to remain focused on “Seizing opportunities, building the future”.
Firing the opening salvo was STB's Chief Executive, Ms Aw Kah Peng, who unveiled a list of initiatives that the Board was rolling out to kickstart demand and support industry members through the tough times.
While the jury is out on the details of those schemes (see related stories) and how they will work, the overall sentiment among the nearly 600 delegates who attended the conference was positive.
The key is action, not inertia, during these challenging times when Singapore's tourism is being battered by the global economic crunch.
There was certainly plenty of action at the one-day event which featured a panel discussion as well as breakout sessions focused on the key markets for Singapore tourism.
Asia bruised, but still standing
In giving a big picture scenario of the global economic picture, Dr Yuwa Hedrick-Wong, Economic Advisor, Asia/Pacific, MasterCard Worldwide, said amidst the bad news – Europe entering its worst recession in 30 years and the US consumer absent in the recovery – the good news was Asia's superior fundamentals would hold the region in good stead.
As such, while Asia was bruised, it was still standing, he said.
“2009 will see global economic growth coming exclusively from emerging markets which are mostly in Asia.”
According to Dr Yuwa, pockets of opportunities existed for Singapore tourism in markets such as Australia, New Zealand and Taiwan. This was based on a MasterCard survey conducted between September and October 2008, which measured personal travel as a spending priority.
However he warned that Singapore could face competition in attracting Chinese and Taiwanese travellers this year due to the opening of direct links between Taiwan and China.
Watch competition and “the real costs to customers”
Indeed, the competitive landscape was one of the issues raised during the panel discussion which featured Ms Aw, Dr Yuwa, Mr Pieter Idenburg, Chief Executive Officer, Suntec Singapore International Convention & Exhibition Centre, and Mr Jonas Ogren, Area Director (Asia), Smith Travel Research (STR) Global.
Ms Aw observed that there were indeed a lot of interesting deals out there. “What we need to do is cut the cost of group travel, offer a better experience and offer a better class of hotel – which we know we have. People are still willing to pay for value.”
Mr Idenburg said it would be difficult for Singapore to compete on price, nor should it. “We need to focus on innovation and drive value in what we offer.”
According to Dr Yuwa Hedrick-Wong, Economic Advisor, Asia/Pacific, MasterCard Worldwide, pockets of opportunities existed for Singapore tourism in markets such as Australia, New Zealand and Taiwan.
Dr Yuwa agreed, “The most innovative period is always after a recession. These are challenging times, we cannot do business as usual.”
Mr Bob Guy, Managing Director, Pacific World, issued a reality check from the floor when he said that while it was well and good to talk about value and innovation, in these times when people had less money in their pockets, customers were focused on asking, “what is the real cost to me of holding an event in Singapore versus Kota Kinabalu or Bangkok?”.
Singapore in strong position despite choppy waters
The good news however is, according to Mr Ogren, “everyone is in the same boat this time – every market is being hurt by this crisis – and the way I see it, Singapore's in a better position than others to ride it out and come out stronger on the other side.”
“Singapore has more to offer a greater number of travellers, both in the leisure and the business/MICE segments. It is a more dynamic destination that keeps adding attraction and improving the quantity and quality of what it has to offer,” said Mr Ogren.
“It is also one of the safest and cleanest cities not only in the region but in the world. We are definitely not the cheapest and that may, in some market segments, work against us in the short term, but from a destination standpoint – Singapore is a great product and at the end of the day, that's what people are buying.”
For the month of December 2008, STR Global, which measures hotel performance across the region, found that Singapore's Revenue Per Available Room (RevPAR) took a dip of over eight per cent versus cities like Bangkok where RevPAR dropped over 48 per cent, Beijing over 41 per cent, Hong Kong over 14 per cent, Mumbai 55 per cent and Shanghai over 36 percent.
“Singapore is near the top of the group in RevPAR for 2008. More importantly, it experienced considerable positive RevPAR growth in 2008 and more recently, in the month of December, saw a comparatively moderate negative growth of 8.6 per cent. Jakarta shines with some great looking growth figures, but comes from a very low base. In local currency, Singapore experienced an ADR (Average Daily Rate) growth of 19.2 per cent in 2008, compared to Jakarta's 14.1 per cent,” said Mr Ogren.
Mr Ogren also observed that one weakness in Singapore's hotel sector – the relative short supply of economy accommodation to cater to regional markets – was being addressed, for example, with the opening of Ibis Bencoolen. “Major brands have expressed an interest in filling that gap.”
Mr Jonas Ogren, Area Director (Asia), Smith Travel Research (STR) Global (left) and Mr Pieter Idenburg, Chief Executive Officer, Suntec Singapore International Convention & Exhibition Centre were panelists at the Tourism Industry Conference discussion session.
Go out and sell Singapore
Mr Ogren also does not believe there will be an oversupply, even with the two integrated resorts, opening.
“The occupancy levels in Singapore will most likely go down, at least in the short to medium term, and will not be in around the 80 mark like we've seen for the past three to four years, but hotels should still be able to operate at reasonable levels. The thought is of course that the IRs will in effect be able to generate their own demand. It will be interesting to see to what extent they are able to accomplish this.”
Mr Idenburg meanwhile said at Suntec business was holding steady and that there were still meetings going on.
“Companies still need to meet, but for different reasons,” he said.
He said BOOST (Building On Opportunities to Strengthen Tourism) was a great initiative in that it showed Singapore as doing something about the crisis.
“We are encouraged by initiatives like BOOST. It's a good opportunity to stimulate the marketplace, but the number one thing we all have to do is go out and sell Singapore, and generate more business.”
To conclude, the panelists were asked to sum up their advice for the tourism sector.
Mr Idenburg called for “patience, transparency and creativity”.
Dr Yuwa said this was the time for “innovation and superior value” while Mr Ogren said “the key is to do it first and do it better than anybody else”.
Ms Aw ended with “Let's BOOST tourism together".
