Amid changing customer trends, STB to invest $110m in events, plans Rewards scheme

ON the Grab ride I took to attend the Singapore Tourism Board (STB) media briefing this morning – to unveil its 2022 tourism results – the driver told me he used to run one of Singapore’s top limousine transfer services which had, among his partners, Booking.com and Klook.

He shut down the service during the pandemic, pivoted to driving for Grab, leasing out school buses and opening a hotpot restaurant. He restarted the limousine service last year and was curious about how the STB was viewing the tourism sector, so that he could plan his future.

Well, there’s good news for him and other tourism players in Singapore – the country’s tourism is well on the road to recovery. International visitor arrivals totalled 6.3m in 2022 (beating forecasts of 4-6m and reaching 33% of 2019 level) and tourism receipts are estimated to reach S$13.8b to $14.3b (50-52% of 2019).

Between April and December 2022, average length of stay was recorded at 4.81 days compared to 3.36 days in 2019, consistent with the global trend towards longer stays as most travellers in the region took trips for the first time last year. Average hotel occupancy stood at 79.1% (87% in 2019).

Its top three visitor markets were Indonesia, India and Malaysia (which were among the top five in 2019) and its top three tourism receipt generating markets were Indonesia, India and Australia.

For 2023, STB is projecting between 12m and 14m visitors, bringing in an estimated $18b-$21b tourism receipts, around two-thirds to three quarters of 2019 levels. “This is almost double 2022 numbers and is of course subject to headwinds as well as the pace of China’s reopening and health situation,” said the STB at the media briefing.

In 2019, China contributed 3.6m visitors, the number one market. Its pace of recovery will depend on how quickly air capacity returns – as of January 2023, there were 38 weekly flights between Singapore and China, which is less than 10% of pre-Covid capacity – as well as how the Chinese government manages outbound travel which it has signalled it will do in a “calibrated, careful manner”, according to Juliana Kua, assistant CEO, international group.

Singapore is fairly confident of its appeal in the Chinese market, said Kua, and the destination will play well into two emerging trends – smaller group travel with customised itineraries and the quest for deeper experiences. Among new initiatives – it is partnering with Chinese sporting brand, Li-Ning, and China’s top OTA, Trip.com whose partnership now extends beyond China to South-east Asian markets.

Keith Tan, chief executive officer of STB, is confident of continuing robust demand from South-east Asia markets. He said recovery would happen in waves – “Chinese travellers will be at the beginning of the revenge travel phase while for other markets, we will see a resumption of normalcy and therefore we must expect to see average length of stay declining to 3.3 or 3.4 by year end.”

Keith Tan, chief executive officer of STB, and his leadership team at the media event. He is confident of continuing robust demand from South-east Asia markets.

The rate of recovery will also be dependent on the supply situation. “We may need to moderate expectations, flight capacity is still not fully back, we’ll see how things will improve but the supply side will reach normalcy by end of 2023”, said Tan.

Listen to Keith Tan, CEO, Singapore Tourism Board talk about China’s reopening, Singapore’s soft power, and moving forward in endemicity on the latest episode of The WiT Podcast here

In terms of manpower, tourism jobs now total 65,000, 78% of workforce employed in 2019. There are 3,000 vacancies at the moment and the STB remains optimistic those vacancies will be filled, with new strategies around wellness and sustainability being rolled out.

While there is much to do to get Singapore tourism back on top, Tan said it would focus on three pillars – securing high quality investments into the sector to create fresh new products, hotels, experiences and events, building the right capabilities for example, AR, VR, AI and sustainability, and securing high quality partnerships to reach broader audiences.

It is investing S$110m over the next two years to attract high profile events – last weekend’s SailGP race being one of those events in question. Known as the Formula 1 of sailing, it was held over the weekend and is the first race of a three-year deal. “If it works, we will sweeten the deal over the longer term,” said Tan.

New Zealand won the Singapore leg of SailGP, their third win of the season. Photo credit: SailGP

He said in frontloading these events, “we also expect partners to put in their investments over the mid to long term”.

He said it was interested in sustainable sports events such as cycling, and “we want to do more with women sporting events”.

It is also developing a SingapoRewards programme, whose funding comes from a “separate bucket of money”. Described as “a project to bring across unknown experiences in Singapore to tourists” by Kua, it offers visitors complimentary experiences on their arrival. It was launched as a pilot in key markets from October and remains in pilot mode.

So how will all these investments impact the livelihoods of the man-on-the-ground like the limo service provider-turned-Grab-driver/hot pot restauranteur?

“I think things have changed,” said my driver. “My customers were the middle-aged Westerners who wanted private transport services as well as the business traveller and conference delegates. I am not sure those longhaul customers will return in 2023 and the younger travellers these days all want to DIY – they are used to on-demand ride hailing, food delivery, ride sharing. I think I will have to change my business model.”

The numbers and trends shared by the STB, if you delve deep enough, will reveal those changes in customer preferences so that even as travel recovers, whichever destination you are in, each of us must also figure out how to move with the times.

On STB’s part, Tan also reminded the media that competition is back. “Hong Kong, for example, is back in business, we are glad Hong Kong is back, we welcome the competition, but it also means we have to work harder.”

So, no resting on laurels for anyone, STB included, but at least it has a glowing report card on which to build on and a far stronger outlook than it did this time last year.