Singapore.

Capital: Singapore

Population: 4,185,200 (2003)

Climate: Uniform temperature and pressure, high humidity and abundant rainfall. The climate of Singapore is divided into two main seasons, the Northeast Monsoon and the Southwest Monsoon season, separated by two comparatively short inter-monsoon periods.

Language: Chinese, Malay, Tamil and English

Total area: 697.1 sq km (2003)

Ethnic groups: 77% Chinese, 14% Malay, 8% Indian and 1% other

Religion: 51% Buddhism/Taoism, 15% Islam, 15% Christian, 15% no religion, 4% Hindu and 1% other.

Currency: Singapore dollar

Total tourist arrivals: 8,328,118 (2004)

Total international S$5,425.8 million tourism receipts:

GDP per capita: 2004 S$42,581 (US$25,191)

Inflation rate: 1.7% (2004)

Unemployment rate: 5.3% (2004)

Major airports: Changi International Airport

Major ports and Singapore harbours:

Exchange rate: S$1 = US$1.6890 or 3.0948 [pounds sterling] (2004)

Summary

Singapore is a major tourism hub for Southeast Asia. It is like no other city in the region, with its hi-tech tower blocks dominating the clean and orderly streets below. Beginning life as a swampy trading post the small island's economy has developed rapidly over the last four decades through hi-tech manufacturing. Tourism is also an important contributor to the economy, but prior to 2004 the industry saw a steady decline in tourism volume. However, 2004 was a record year for tourism, with arrivals exceeding the eight million mark. The Singapore Tourism Board now aims for tourism to become a key driver for the economy and has its sights on tourism arrivals more than doubling to 17 million by 2015. To encourage this they are developing new sectors, such as entertainment and casinos', encouraging investment in the Orchard Road, the most visited tourism attraction, and providing a holistic and co-ordinated approach to promotion with the new Uniquely Singapore brand.

Introduction

Tourism to Singapore has been thwarted over the last few years with a global economic slowdown, the events of 9/11 and in 2003 the affects of SARS, which saw its already declining visitor volumes fall by a further 19%. All this has contributed to Singapore failing to reach its true tourism potential. However, in 2004 the small city state exceeded all expectations and saw tourism arrivals reach a new peak of 8.3 million. The government intends for this growth to continue and expects tourism to become a key contributor to the economy. By 2015 it expects the industry to bring in S$30 billion in tourism receipts, a 200% increase on 2004. The infrastructure is already in place and the Singapore Tourism Board expects to reach its target by increasing on existing market segments as well as developing some new ones.

Data Sources

The Singapore Tourist Board publishes tourism data on a monthly basis, as well as in their Annual Report on Tourism Statistics. The source of STB's Visitor Arrival Statistics is the Disembarkation/Embarkation Card by the Immigration and Checkpoints Authority.

Visitor arrivals include those who go through immigration clearance, regardless of their length of stay. It excludes:

* all Malaysian citizens arriving by land

* returning Singapore citizens residing abroad

* non-resident air and sea crew (except for sea crew flying in to join a ship)

* all visitors arriving and leaving Singapore on the same ship/vessel, staying in Singapore for less than 24 hours and who are not required to complete the Disembarkation/Embarkation Card, if a passenger manifest is submitted

* all organised tour groups leaving Singapore for Johor Bahru, Batam and Bintan that are returning on the same day and are not required to fill up another Disembarkation/Embarkation card, if a passenger manifest is submitted

* air transit passengers.

Brief History

Singapore is a small island at the tip of the Malay Peninsula. Due to its geographical positioning, its success is founded on its history as a trading post for Eastern and Western traders. Today it is still a major crossroads for travellers and traders alike, providing a varied tourism product based on its history, cultural, places of interest, shopping and cuisine.

The island gained great importance during the late 18th century as China began opening up trade with the west. In 1818, Thomas Raffles was authorised to establish a British Colony at the Southern Tip of the Malay Peninsular. Although largely swampland, the deep water harbour provided potential and a treaty was struck, establishing it as a British trading station. The outpost expanded rapidly, encouraged by the lack of customs duties and its geographical positioning. Under the Straits Settlement of 1867 the state, united with Penang and Melaka, became a British Crown colony. The Raffles Hotel opened in 1887.

In February 1942 Singapore fell to the Japanese, but in 1945 the state passed back to the British following the atomic bombing of Hiroshima and Nagasaki. In 1946, Singapore became a Crown colony in its own right, growing ever closer to independence as time progressed. In 1963, Singapore combined with Malaya, Sarawak and British North Borneo to form the Federation of Malaysia. After two years, Singapore declared itself independent. The economy increased four-fold between 1965 and 1977 as business opportunities were maximised. By 1980, Singapore became a newly industrialised economy, but development was achieved by draconian leadership with heavy censorship and a lack of political opposition.

Over the last four decades, Singapore' s progress has been remarkable given its lack of natural resources. Its growth is based on the hi-tech manufacturing; it has the second largest port after Rotterdam, minimal unemployment and a super-efficient infrastructure. Residents have been moved from slums into new apartments and the country boasts one of the highest per capita incomes in the world. Many claim that the island has sold its soul for prosperity. Nevertheless, the low crime rate, squeaky clean streets and excellent amenities all adds to the appeal for visitors.

Attractions

Singapore is now an important Asian gateway for tourists, a popular stopover destination and a shopping mecca. The island has been through a massive social and geographic change over the last few centuries and has become a diverse metropolis where ancient and modern cultures sit side by side. Due to its small size, 42 kilometres from east to west and 23 kilometres from north to south, an impression of the island can be gained in just a few hours. However, the average stay is a little longer at just over three days.

The downtown area is filled with towering skyscrapers and shopping malls while new towns sprawl the outer rim. Tucked between it all are older buildings, values and traditions as well as parks and nature reserves filled with lush tropical vegetation.

Shopping is one of the main attractions of Singapore. So much so that many top hotels also have an attached shopping arcade with boutiques specialising in designer fashion, accessories, jewellery and watches. The infamous Orchard Road, one of the most visited tourist attractions, can be found within the central shopping belt themed with designer boutiques, local and international department stores, speciality shops and bargain counters compete with cafes and restaurants. Outside the city centre the Riverside area by River Valley Road is home to both some of the newest as well as the oldest shops in Singapore.

Outside of the downtown area cultural enclaves can be found, boasting temples and old colonial buildings, and signs of the diverse ethnic mix of the country. Its multicultural mix is another fascination for visitors. Although dominated by Chinese, the Malay, Indian and old colonial influences are still very prevalent. The Colonial District is in the downtown centre. It hosts many public buildings and a lofty cathedral while Little India, Chinatown and the Arab Quarter all provide their own cultural and architecturally inviting enclaves.

Singapore is also renowned for its 24-hour eating. Its ethnic diversity is a source of multicultural culinary experiences. As well as Cantonese, Indian and other Asian flavours, European and other food from around the world is not uncommon. Food preparations that came to Singapore from India, China and other countries in the region may still bear the original names--but have been transformed by being 'Singaporeanised'. Uncommonly, strict public hygiene and food preparation rules make eating out anywhere on the island a risk-free proposition.

The north of the city are the country's two nature reserves, Bukit Timayh nature Reserve and the Central Catchment area as well as the Singapore Zoological Gardens. The east coast features good seafood restaurants and long stretches of sandy beaches. There are also fifty islands off the coast, many of which can be reached with ease. Sentosa is the main island resort area and is just a ten-minute drive from downtown. The island boasts a range of accommodation from five-star resorts and spas to a campsite, as well as many attractions including the new Carlsberg Sky Tower (an observation tower), golf courses and world-class entertainment. Figure 1 shows that it is the most visited paid attraction in Singapore and in 2002 and 2003 it welcomed some 30% of tourist arrivals.

Many of the attractions shown in Figure 1 experienced a decline in the proportion of visitors in 2003 with Boat Quay/Clark Quay experiencing the largest decline at 15 percentage points. The Orchard Road is the only attraction to increase its proportion of visitors in 2003.

Tourism and the Economy

Singapore's economy is based on banking, tourism, trade, shipping and hi-tech light industry. Overall it can be seen in Figure 2 that Singapore's gross domestic product (GDP) grew by 15% between 1999 and 2003. However, in 2001, the economy experienced a recession, with GDP falling by 3.6% compared with 2000. This was the first decline since the pan-Asian economic crisis in 1997. The 2001 slowdown was blamed on the weak global demand for hi-tech equipment. Manufacturing, half of which is hi-tech, accounts for a quarter of Singaporean GDP. Singapore is also particularly vulnerable to changes in the global economy, as over two thirds of its industrial production is exported. GDP has since returned to growth, increasing by 17% between 2001 and 2004.

Tourism is an important contributor to Singapore's economy and in 2004, 150,000 were employed in the tourism sector. However, tourism receipts have not enjoyed the same level of growth as GDP and between 1999 and 2003 receipts decreased by 29%. The global tourism industry has been thwarted by the events of 9/11, further acts of terrorism and war, as well as intensifying competition. For Singapore this led to a gradual decline in tourism receipts. In 2003, the industry was further challenged as the region was struck by the Severe Acute Respiratory Syndrome (SARS). Singapore was on the World Health Organization's list of affected countries and in April and May 2003 visitor numbers were down as much as 71%. However, the overall arrivals figures for 2003 dropped by just 19% during the year--much less than the 30% decline which was originally projected, leading to a fall in receipts of 22%.

After a difficult period, the future is now looking brighter for the economy and tourism. GDP grew by 12% between 2003 and 2004, its best performance since 2000. Singapore's economy contracted over the summer of 2004, weighed down by soaring oil prices. However, the economy' s poor performance in the July to September period followed four consecutive quarters of double-digit growth, as Singapore bounced back strongly from the effects of SARS in 2003. Tourism receipts exceeded all expectations in 2004 and increased by 39% compared to 2003, reaching similar levels to that of 1999.

Total Expenditure of Visitors (TEV) is one of the key performance indicators of Singapore's Tourism Sector. TEV measures the total revenue received by Singapore from tourism activity. It includes all payments and prepayments for goods and services made by visitors, as well as high-yield shopping expenditure.

TEV, which accounts for about 62% of receipts, also decreased in 2003--by 20%--also as a result of the SARS outbreak, although expenditure had been declining steadily since 2001. Over the total period shown in Figure 3, expenditure decreased by a total of 41%.

Expenditure breakdown

As already stated, shopping is one of the major attractions of Singapore and in 2003 expenditure on this activity accounted for 55% of TEV.

Accommodation made up the second largest proportion of spend, at 21%, while food and beverages (F&B) was 13%. Sightseeing/entertainment only accounted for 2% of spend, while medical spend was higher at 4%. Some 5% of total spend was on local transport.

Of those shopping, apparel was the most popular spend in 2003, with 28% of visitors spending on clothing. Edibles were the next most popular spend at 20%, while 14% spent money on electrical/electronic goods.

In terms of actual spend on these items the proportions are different again, as illustrated in Figure 5.

While the majority of spend is still apparel, at 24%, spend on electronic/electrical goods comes a close second in 2003 at 23%. Jewellery and cosmetics/perfumes spend both account for 8% while edibles were 5%, handbags/wallets 5%, souvenir/handicrafts 4% and watches 4%.

Arrivals

Tourist arrivals to Singapore over the last decade, not surprisingly, follow a similar pattern to that of expenditure. Arrivals dropped in 1997 and 1998, mainly as the result of the pan-Asian economic crisis, which resulted in the slowdown of regional visitors. The years 1999 and 2000 saw visitor numbers increase again, with 2000 proving to be a record year. However, the market dropped in 2001 as tourism was affected by the slowdown in the global economy and the tragic events of 9/11.

The year 2003 saw visitor numbers fall by 19% as a result of the SARS outbreak. However, the quick response of the Singapore Tourist Board (STB) to negate the impact of the virus on the tourism industry reduced the fall in numbers from the originally forecast 30%. After a difficult few years, the tourism industry performed well in 2004, with arrivals reaching an all time high of 8.3 million, representing an increase of 34% on 2003.

Major source markets

Arrivals from Asia take the lion's share of tourists to Singapore and in 2004 accounted for 73% of the total. Over the period shown, Asian arrivals increased by 16%. However, much of this growth occurred between 2003 and 2004 when the market increased by an incredible 38%. Indonesia is the largest source market and one that has increased by 68% over the last decade. Overall Indonesian arrivals account for 21% of total arrivals.

The most prolific growth of Asian arrivals has occurred within the Chinese market, which has increased by 336% since 1995. Between 2003 and 2004 alone, Chinese visitors increased by 55%. India has also seen a significant increase in arrivals from 188,000 in 1995 to 471,000 in 2004, representing an increase of 150%.

European visitors accounted for 13% of visitors in 2004, representing an increase of 11% on 1995, although a lower number arrivals than that of 2001. Nevertheless, the European market has improved considerably since 2003. The UK is by far the largest source market from Europe, with 457,000 arrivals in 2004, an increase of 58% since 1995.

Arrivals from Oceania have increased by 60% over the period shown, with Australia being the fourth largest source market, providing 561,000 visitors.

The Americas have seen a decline in visitors of almost 1% over the last decade, with much of this decline coming from the US market, which has retracted by 4%. The growth potential of the US market has been thwarted by the events of 9/11.

Purpose of visit

Holiday visitors represent the majority arrivals at 44% in 2003, showing a decline of 24% due to SARS (and a drop of three percentage points) on 2002. The largest decline came from Japan (-48%), Australia (-34%), India (-33%) and South Korea (-31%).

Business travel, which made up a fifth of arrivals in 2003, made less of an annual decline at 17%. The largest declines came from South Korea, the US, Malaysia and Japan.

Length of stay

In 2002, the average length of stay dipped to 3.08 days, which was due to an increase in the number of in-transit arrivals who stayed for less than a day (+2.8%). However, there was an increase in the number of holidaymakers (15%) mainly from China, the UK and the US, staying 11-14 days.

In 2003, the average length of stay increased marginally to 3.18 days, with the average hotel length of stay being lower at 2.7 days.

Seasonality

Figure 9 demonstrates the seasonality of arrivals by the various source markets. Due to the dominance of Asian arrivals, the total monthly arrivals data very much mirrors the trend of Asian arrivals, peaking in July and December.

[FIGURE 9 OMITTED]

Although February and March may be low season for Asian arrivals, it is the peak period for European arrivals, with both months achieving over 102,000 European arrivals. A second peak in European arrivals occurs in July and August. Oceanian arrivals also peak in July at nearly 71,000, while arrivals from the Americas peak in July and December.

Seasonal arrivals data for 2003 clearly demonstrates the affects of SARs on arrivals.

Transport

The main mode of arrival in Singapore is by air. In 2003, some 69% of tourist arrivals flew into the country, down just two percentage points on 2002.

Sea arrivals increased by one percentage point in 2003 to account for almost 17% of tourist visitors, while land arrivals also increased to 14%.

According to Minters Air Travel--Asia, July 2004 report, Singapore's Changi Airport is the sixth largest in the region in terms of passengers carryings, after Tokyo, Bangkok, Hong Kong and Sydney. In 2003, Changi saw 24.7 million passengers pass through its doors. Numbers for 2004 are expected to rise significantly in line with the increase in visitor numbers. A third terminal is currently in progress at the airport and is due to open in 2006. This will see its capacity rise to 64 million passengers, a limit it is forecast to reach by 2030.

Singapore Airlines 

International arrivals are dominated by Singapore Airlines, and its regional subsidiary Silk Air, which has been operating out of Changi since 1989. Throughout its existence, Singapore Airlines has been an industry leader, not only in terms of profits but also in innovation and passenger comfort. The airline runs a fleet of more than 100 aircraft covering 40 countries. The airline was the first to operate the new Airbus A345, a long-range aircraft for non-stop long-haul services. It introduced the first non-stop Singapore-Los Angeles service in December 2003, the longest non-stop trans-Pacific flight removing the need to stop in Taipei or Tokyo. In 2004 it also added a non-stop 18-hour Singapore-New York route. The airline also has ten Rolls-Royce A380-800s on firm order with Airbus and holds options on 15 more. It will be the first airline to operate the new type when the aircraft enters service in the first half of 2006 on high traffic routes.

In June 2005, Singapore Airlines is to be the first on transoceanic flights to add four channels of live English-language television programming to its Connexion by Boeing high-speed Internet service.

Emergence of a low-cost sector

Within the region, competition has been intensifying due to the proliferation of low-cost airlines, particularly in Singapore, India, Thailand and Malaysia. In 2003, Air Asia opened a new hub at Senai Airport at the bottom of the Malay Peninsula near to Singapore, operating six round trips to other Malaysian cities daily.

Singapore's first low-cost airline ValuAir received approval from the Civil Aviation Authority of Singapore in April 2004 to fly to other cities such as Bangkok, Jakarta and Hong Kong. Also in 2004, Singapore Airlines launched its own low-cost subsidiary, Tiger Airways, which has rapidly expanded its routes in the region. The low-cost carrier has adopted an aggressive pricing strategy by slashing operating costs and creating stringent cost controls. Similar to other budget carriers, Tiger Airways is focusing on the Internet as a marketing, sales and revenue tool, with the hope that it will eventually sell 80% of its tickets online. The airline is already the largest low-cost cartier flying between Singapore and Thailand. It has the highest frequency of flights to Bangkok, Phuket, Hatyai and Chiang Mai. In March 2005, Tiger Airways announced it had won approval from Vietnamese aviation authorities to operate flights between Vietnam to Singapore, starting in April 2005. The carrier is also expected to launch services to Indonesia and the Philippines during 2005.

A third low-cost carrier, Jetstar Asia, also operates out of Singapore.

Accommodation

The majority of arrivals to Singapore stay in hotels. In 2003, some 57% of arrivals stayed in a hotel compared to 59% in 2002. Some 13% stayed with friends or relatives. A total of 7% stayed elsewhere while 14% did not state the type of accommodation that they used. A total of 9% did not require accommodation.

Considering the dominance of hotel stays, a relatively small proportion were booked as part of a package. In 2003, statistics from the Singapore Tourism Board suggest that 16.4% of total arrivals booked a group package, which would have included their hotel. Some 25.3% arranged a non-group package, ie made their hotel booking independently. Just under a third did not state their travel arrangements while 27% used other arrangements. These figures, although slightly unclear, suggest a high level of independent travel into Singapore.

According to the STB in 2003 there were 99 gazetted hotels in Singapore, two less than in 2002, providing 29,971 rooms (1.6% less than in 2002). Total gazetted hotel room revenue declined by 24% to reach $752 million, contributed by both the drop in average occupancy rate (AOR) (-7 percentage points) and average room rate (ARR) (-8%).

Over the period shown in Figure 13, AOR has declined by eight percentage points, and from its peak in 2000, has fallen by 16.3 percentage points in 2003. ARR follows a similar trend, declining by 3.8% between 1999 and 2003 and by a higher 13.4% between its peak (this time in 2001) and 2003. Revpar also peaked in 2000 and has declined gradually to 2002 but fell more dramatically in 2003, the year of the SARS crisis.

While there has been little development in terms of new hotels, several have added rooms, refurbished or extended. The Grand Mercure Roxy Hotel, on Singapore's east side, has added 38 more rooms, bringing its inventory to 520 rooms. Highlighting the hi-tech nature of Singapore's hotels, the Orchard Hotel is offering the services of an IT butler who will visit your room to help with IT issues.

Leading convention & Exhibition City

The STB are also keen to enhance business travel within the city and are working on strengthening Singapore's position as a leading convention and exhibition centre within a strong and dynamic business environment. The conference facilities within Singapore are already second to none.

The Waterfront Conference Centre, which launched in August 2003, managed by Millennium and Copthorne International, is one of Singapore's largest and newest conference facilities and offers three levels of dedicated conference and meeting space. It hosts 34 meeting rooms featuring wireless, audiovisual, intelligent light and sound facilities. Many rooms also boast views of the historic river. The Grand Ballroom can accommodate up to 900 guests (theatre-style) and provides an elegant venue for gala dinners, banquets and corporate parties and features a six-metre column and a glass wall revealing a garden of natural pine trees.

Singapore's most centrally located convention centre is the Raffles City Convention Centre, situated next to the Raffles Plaza, the Raffles group's popular business hotel. The Convention Centre boasts cutting edge technology within its 70,000 square feet of function space comprising of 18 meeting rooms, located four stories above the Raffles City shopping complex. There are three types of function rooms: big ballrooms, which accommodate up to 3,200 delegates (theatre-style); small meeting rooms; and the one-year-old, decidedly hi-tech executive conference centre.

This new state-of-the-art wing of the convention centre is able to handle 40 to 160 people in its eight function rooms. The most technically advanced are the two customised function rooms--The Wilberforce and The Bailey. They include the latest audio, visual and video-conferencing equipment and an AMX touch pad that gives users control over motorised speakers, projectors, lights and sound. The Viracon Privacy Glass turns clear or frosted on command.

Organisation of Tourism

Singapore Tourist Board (STB)

As tourism is an important contributor to the Singapore economy, it is an activity very much encouraged by the government. The Singapore Tourist Promotion Board was first established by the government in 1964 in order to promote Singapore as a tourist destination and co-ordinate the efforts of airlines, hotels and travel agents. Today the STB remains the key government agency responsible for the long-term development and growth of the tourism industry.

The STB not only markets Singapore as a destination but it also plans, regulates and facilitates the development of the industry. In its 2003/04 annual report the STB states that it aims to take a more holistic approach and build the sector as a key driver for the economy. As such the STB works closely with other public agencies and the private sector in order to encourage growth. The STB supports, incentivises and catalyses the private sector to take the lead in investing for sector growth. The areas of facilitation include investment promotion, product and industry development, financial grants and tax incentives. These aim to encourage companies to develop new ideas and market Singapore as a tourism destination.

The STB's international operations cover the key markets in Asia, Oceania, Europe and the Americas, with expanded resources to capitalise on growth markets such as China and India.

In January 2005, the Minister for Trade and Industry, Mr Lim Hng Kiang, unveiled the STB's longterm targets of tripling tourism receipts to S$30 billion, doubling visitor arrivals to 17 million, and creating an additional 100,000 jobs in the services sector by 2015. These targets will ensure that tourism continues to drive the economy and will be helped by a S$2 billion tourism development fund.

A number of Strategic Tourism Units (STUs) have been established by the STB to reflect the core visitors that come to Singapore. There are STUs in the following areas:

* Business Travel and Mice

* Education and Health

* Food & Beverage

* Lifestyle & Events

* Sightseeing & Cruise

* Tourism Shopping

All segments have been identified as having growth potential within its existing capabilities and infrastructure. The STUs aim to develop these segments further so that they fulfil their potential and contribute fully to Singapore economy.

Singapore Hotel Association (SHA)

The SHA represents the hotel industry in Singapore and accounts for about 90% of the total inventory of gazetted hotel rooms in the country. SHA's associate members represent a cross section of related businesses, including hotel product/equipment and services providers, restaurants, clubs and convention and exhibition organisers.

The Association plays an important role in the development and growth of the tourism and hospitality industries in Singapore. In addition to promoting the business interests of its membership, the SHA works closely with the STB to encourage the continuing tourism growth through marketing and promotions, product development, manpower training, productivity improvements and quality assurance.

The SHA also takes responsibility for the training and manpower needs of the hotel industry and set up the The Singapore Hotel Association Training and Educational Centre (SHATEC) in 1983. As SHATEC has developed its training, it now extends its programmes throughout the region and the Indian Ocean. To reflect the international character of the school today, the name of SHATEC is now changed to stand for the Singapore Hotel and Tourism Education Centre.

SARS

The STB and its partners were challenged by the SARS epidemic and fought to negate the impacts. Once the World Health Organization removed Singapore from its list of affected countries, $2 million was spent of the Step Out! Singapore domestic campaign and $200 million on the Singapore Roars global recovery campaign. The campaigns helped to curb the damaging effects of SARS and drive the recovery of the tourism sector which saw arrivals figures drop dramatically during April, May and June of that year. Although total arrivals for the year were 19% lower than the previous year, the republic still achieved some 6.1 million arrivals during 2003, showing the industries reliance and the successful work of the campaigns.

Regional collaboration

In 2003/04, the STB strengthened its strategic alliances with regional NTOs as a means of attracting more visitors. As part of the Association of Southeast Asian Nations (ASEAN) Tourism Task Force, the STB jointly implemented the action plan for the ASEAN tourism agreement, which particularly focused on joint promotion.

Uniquely Singapore brand

In 2004, the STB unveiled its new destination brand 'Uniquely Singapore' after an eight-month consultation programme involving 400 stakeholders. The aim is to develop Singapore as a leading Asian leisure destination by providing an 'enriching experience' that is uniquely Singapore.

New Indian Office

The Singapore Tourism Board (STB) opened a new regional office in New Delhi at the end of March 2005 as part of its continuing worldwide efforts to strengthen its marketing position as a destination of choice for business and leisure travellers in the Asia-Pacific region. The new office is the STB's 21st worldwide and third in India, and confirms the rising significance of the Indian market to Singapore's tourism arrivals.

In 2004, Singapore welcomed a record high of 471,000 Indian visitors, making India the sixth largest visitor-generating market. This represents a 21% growth over the previous record year in 2002. With the Indian economy forecast to continue its healthy growth, it is expected that Indian arrivals will remain one of the fastest growing markets to Singapore.

New Market Potential

The STB is to continue to enhance the existing tourism experiences by developing new attractions which will cater to specific customer segments, such as a world class entertainment centre, family-themed attractions and enhanced shopping experiences.

Orchard road development and new business incentive schemes

At the end of March 2005, the Minister for Trade and Industry announced plans for the rejuvenation of Orchard Road into one of the world's greatest shopping streets. The project is expected to contribute to the STB's 2015 targets of more than doubling visitor arrivals to 17 million, and tripling tourism receipts to S$30 billion. Some $1.6 billion is expected to be invested in Orchard Road by both the private and public sectors.

Orchard Road already enjoys a reputation as a premier shopping district in the region and has consistently ranked among the top sites by visitors to Singapore. To build upon Orchard Road's attractiveness as a shopping destination, an Orchard Road Rejuvenation Taskforce which includes representatives from STB, Urban Redevelopment Authority (URA) and Land Transport Authority (LTA), was formed in October 2003 to study ways to make Orchard Road an even more compelling destination for locals and visitors to Singapore.

The vision is to turn Orchard Road into a dynamic, vibrant and vital urban centre for overseas visitors and locals, and a stage for exciting events where the best of city life can be found amidst tropical gardens. The new Orchard Road will offer an endless array of shopping, dining and entertainment experiences for visitors. The taskforce has identified three key strategic thrusts for the rejuvenation plans; enhancing the retail experience for visitors to Orchard Road; enhancing the pedestrians' experience on the street; and collaborating closely with stakeholders of orchard road.

The government will work closely with private stakeholders, including the Orchard Road Business Association, in order to co-ordinate the development effectively. The STB has also introduced two new incentive schemes to encourage the development of new businesses, not necessarily within Orchard Road. The Investment Allowance Scheme for Flagship Concepts will be used for new investments in flagship concept stores in the retail, food and beverage and entertainment sectors for projects not yet seen in Southeast Asia that will also enhance the attractiveness of Singapore for visitors. The second incentive is the Concessionary Tax Rate For Approved Mega Events scheme aims to bring in large events.

Casino development

The STB is hoping to develop its client base even further by encouraging the development of casino's within the city-state. Two of the world's largest gaming companies, Las Vegas Sands and MGM Mirage, have submitted plans to independently develop casino-hotel complexes in Singapore. Las Vegas sands has claimed that their plans for a world class entertainment facility will include a culturally significant landmark which will draw tourists from around the world and anchor the luxury resort casino complex.

Outlook

With 2004 being an excellent year for tourism in Singapore, the future is looking brighter, particularly after a very difficult period where the industry failed to fulfil its true potential due to acts of terrorism, war and the SARS virus. The boom in tourist arrivals in 2004, taking visitors over the eight million mark for the first time, bodes well for the government's plan to increase tourist arrivals to 17 million by 2015.

The development of new attractions and market sectors will also encourage this growth. However, Singapore is likely to be severely affected if there is a bird flu pandemic in the region. The disruption to tourism could be much more severe than in the SARS outbreak, as the virus is much more lethal and would result in a greater fall in visitor numbers.

FIGURE 1: ATTRACTIONS VISITED, 2002 AND 2003

                               2002   2003   % point change
                                %      %         2002-03

Paid attractions:
Sentosa                         30     30          --
Singapore cable car             13     12          -1
Night safari                    13     10          -3
Jurong bird park                15      9          -6
Singapore Zoological Gardens     6      8          +2

Free attractions:
Orchard Road                    69     76          +7
Chinatown                       46     41          -4
Little India                    31     27          -4
Boat Quay/Clark Quay            31     16         -15
Merlion Park                    16     12          -4

SOURCE: STB/MINTEL

FIGURE 2: TOURISM AND THE ECONOMY, 1999-2004

                            1999       2000        2001       2002

GDP (S$m)                 139,897    159,596     153,771    158,388
Tourism receipts (S$m)      9,700     10,400       9,432      8,831

                            2003       2004    % change
                                               1999-2004

GDP (S$m)                 160,924    180,554     +29.1
Tourism receipts (S$m)      6,900      9,600      -1.0

Note: receipts include all prepayments for goods and services made
by visitors, transit passengers and foreign air/sea crew

SOURCE: SINGAPORE DEPARTMENT OF STATISTICS/SINGAPORE TOURISM BOARD

FIGURE 3: TOTAL EXPENDITURE OF VISITORS, 1995-2003

        TEV      % point change
        S$ m

1995   7,350.0          --
1996   7,350.0          --
1997   6,207.4        -15.5
1998   5,493.6        -11.5
1999   6,033.3         +9.8
2000   6,292.6         +4.3
2001   5,699.3         -9.4
2002   5,425.8         -4.8
2003   4,315.0        -20.5

SOURCE: STB/MINTEL

FIGURE 4: BREAKDOWN OF TEV BY SECTOR, 2003

Shopping           55%
Accommodation      21%
F&B                13%
Local transport     5%
Medical             4%
Sightseeing/
Entertainment       2%

Note: Table made from pie chart.

SOURCE: 2004 SINGAPORE TOURISM BOARD

FIGURE 5: DISTRIBUTION OF THE EXPENDITURE ON SHOPPING ITEMS, 2003

Apparel        24%
Electronic/
electrical     23%
Jewellery       8%
Cosmetics
perfumes        8%
Edibles         6%
Handbags
wallets         5%
Souveniers
handicrafts     4%
Watches         4%
Others         19%

Note: Table made from pie chart.

FIGURE 6: VISITOR ARRIVALS, 1995-2004

       Arrivals    % change
          000

1995     7,137        --
1996     7,292       +2.2
1997     7,198       -1.3
1998     6,242      -13.3
1999     6,958      +11.5
2000     7,691      +10.5
2001     7,522       -2.2
2002     7,567       +0.6
2003     6,127      -19.0
2004     8,328      +35.9

SOURCE: STB/MINTEL

FIGURE 7: VISITOR ARRIVALS BY SOURCE MARKETS, 1995-2004

                         1995     1997     1999     2001     2003

Asia                    5,231    5,201    4,979    5,224    4,401
--Southeast Asia        2,228    2,351    2,224    2,523    2,307
Indonesia               1,050    1,172    1,210    1,364    1,341
Malaysia                  681      682      509      579      439
Thailand                  257      210      229      261      236

--North Asia            2,583    2,402    2,061    2,118    1,643
PR China                  202      235      372      497      568
Japan                   1,179    1,094      861      756      434
South Korea               351      298      242      359      261

--South Asia              355      386      438      501      412
India                     188      227      288      340      309

Europe                    966      988     1050     1115      877
UK                        289      333      401      460      388
Germany                   190      170      168      167      121
Netherlands                71       63       65       75       55

Oceania                   427      463      564      656      476
Australia                 347      381      466      551      393
New Zealand                66       70       87       94       73

Americas                  426      460      444      434      315
USA                       346      376      351      344      251
Canada                     62       63       73       69       51

Africa                     87       71       90       88       58

Middle East (W Asia)       66       62       74       82       38

Total                   7,137    7,198    6,958    7,522    6,127

                         2004   % change
                                1995-2004

Asia                    6,079     16.2
--Southeast Asia        3,086     38.5
Indonesia               1,765     68.1
Malaysia                  537    -21.1
Thailand                  342     33.1

--North Asia            2,304    -10.8
PR China                  880   +335.6
Japan                     599    -49.2
South Korea               361      2.8

--South Asia              621     74.9
India                     471   +150.5

Europe                  1,071     10.9
UK                        457     58.1
Germany                   142    -25.3
Netherlands                61    -14.1

Oceania                   682     59.7
Australia                 561     61.7
New Zealand               109     65.2

Americas                  422     -0.9
USA                       333     -3.8
Canada                     69     11.3

Africa                     74    -14.9

Middle East (W Asia)       68      3.0

Total                   8,328     16.7

SOURCE: STB/MINTEL

FIGURE 8: PURPOSE OF VISIT, 2003

Other         21%
Education      1%
in-transit     7%
VFR            7%
Holiday       44%
Business      20%

Note: Table made from pie chart.

SOURCE: 2004 SINGAPORE TOURISM BOARD

FIGURE 11: MODES OF ARRIVAL, 2002 AND 2003

       2002    2003    % point change
         %       %        2002-03

Air    71.3    69.1         -2.2
Sea    15.6    16.8         +1.2
Land   13.2    14.2         +1.0

SOURCE: SINGAPORE TOURISM BOARD

FIGURE 12: TYPES OF ACCOMMODATION USED AS PROPORTION OF
TOTAL ARRIVALS, 2002 AND 2003

                                2002   2003

Hotel                           59.3   56.7
Stayed with friends/relatives   11.7   12.9
Others                           6.0    6.7
No accommodation required        8.8    9.4
Not stated                      14.2   14.3

SOURCE: SINGAPORE TOURISM BOARD

FIGURE 13: HOTEL OPERATING PERFORMANCE, 1999-2003

                                        1999     2000      2001

Average occupancy rate (AOR) %          74.88    83.45     76.28
Average room rate (ARR) $ *            120.04   127.81    133.38
Revenue per available room (Revpar)     89.89   106.66    101.74

                                        2002     2003    % change
                                                         1999-2003

Average occupancy rate (AOR) %          74.44    67.19     -7.7 *
Average room rate (ARR) $ *            125.93   115.47     -3.8
Revenue per available room (Revpar)     93.75    77.59    -13.7

Note: * percentage point change

SOURCE: SINGAPORE/MINTEL

FIGURE 14: TARGETS FOR SINGAPORE TOURISM TO 2015

                            2004      2015     % increase

Tourism receipts (S$bn)         10        30       200
Visitor arrivals (m)             8        17       113
Tourism employment         150,000   250,000        67

SOURCE: SINGAPORE/MINTEL