Minister Lim Hng Kiang at the STB Tourism Industry Night

SPEECH BY MR LIM HNG KIANG, MINISTER FOR TRADE AND INDUSTRY, AT THE STB TOURISM INDUSTRY NIGHT ON THURSDAY 8 FEBRUARY 2007, 7:30PM AT THE NATIONALMUSEUM

Distinguished guests, ladies and gentlemen, good evening.

Introduction

I am pleased to join you this evening to celebrate the achievements over the past year and to share with you some of the exciting developments ahead.

Tourism Sector Performance in 2006

The tourism sector performed very well in 2006. It generated an estimated $12.4 billion in tourism receipts, setting a new record for the tourism industry. We also welcomed 9.7 million visitors, crossing the nine million mark for the first time.

2006 saw strong performance from our key markets, driven in part by our increased marketing and promotional efforts, and through enhanced air connectivity and affordability of air travel. Singapore became the first destination outside Hong Kong and Macau to welcome more than one million Chinese visitors, reflecting our growing destination appeal for the China market. All our top ten markets posted growth over the past year, with eight out of these ten markets registering record high arrivals.

Our hospitality industry also performed well in 2006, with Average Occupancy Rate reaching 85% and an Average Room Rate of $164. These are historical highs for Singapore. 2006 also saw a record high room rate of $190 in the month of September, the highest achieved for any month since 1995. On the whole, 2006 was a banner year for the tourism industry.

Tourism Sector Milestones

Looking back, we crossed several key milestones in 2006. Together with the enablers that have been put in place, I am confident that we are on track to meet the targets of $30 billion in tourism receipts and 17 million visitor arrivals by 2015.

First, we awarded the two Integrated Resorts (IRs) at Marina Bay and Sentosa to Las Vegas Sands and Genting International respectively, following the successful Request for Proposals exercise which attracted high quality bids from world class players. The two projects combined will add more than $10 billion in investments to Singapore. Each of the IRs is also estimated to contribute some $2.7 billion or 0.8% annually to Singapore's Gross Domestic Product (GDP), as well as generate approximately 30,000 jobs throughout the economy by 2015.

STB gave the MICE industry a boost last year with the launch of the “BE in Singapore” or “Business Events in Singapore” incentive scheme. The scheme will help spur the development of business events over the next five years. Through this initiative, we hope to raise the tourism receipts contribution of the BTMICE sector from 30% to at least 35% or S$10.5 billion by 2015. The successful staging of IMF-World Bank Annual Meetings also demonstrated our capability to host a major business event and re-affirmed Singapore’s strategic positioning as a top MICE destination.

The MICE industry was not the only one that received a boost. To grow our share of the cruise industry, a $10 million Fly-Cruise Development Fund was established in 2006. The Fund will help us ride on the wave of growth of
 the cruise industry in the Asia-Pacific region. I understand that two cruise operators, Royal Caribbean International and Costa Cruises, have already tied up with STB on a series of marketing initiatives under this Fund. On the retail front, the upcoming developments at Orchard Turn, Somerset and Somerset Central will also introduce new and exciting lifestyle concepts along Orchard Road, complementing other efforts to rejuvenate Singapore’s most famous shopping street.

Challenges for the Tourism Sector

While it is encouraging to see the tourism sector growing strongly, several challenges lie ahead.

With the healthy hotel occupancy and room rates, some of you may have been experiencing difficulties in securing sufficient hotel rooms for your clients. To facilitate an adequate supply of rooms and the right mix of accommodation for our visitors, the Government will continue to make available more sites for hotel developments. Over the next two years, we will see about 1,000 rooms added to our inventory each year, and another 4,300 new rooms when the two Integrated Resorts are completed by early 2010.

Manpower is another area that we will have to address. With the positive outlook for the tourism and hospitality sector, we will need to focus our efforts on developing a skilled tourism workforce to fill the additional jobs created in the tourism industry. STB has been working with educational institutions to offer more tourism and hospitality-related courses at all levels and this will help ensure a steady source of trained manpower for the industry. At the same time, the collective efforts of agencies such as the WDA, NTUC and SNEF will also help upgrade the skills of existing workers through retraining.

As members of the industry, you too have a part to play in raising the skills and competencies of your employees by investing in their training. There is also room for employers to be more open and flexible to employ mature workers as well as workers who are making mid-career changes. This includes workers who have been displaced from other industries but have gained the necessary new skills to work in the tourism sector.

While the Government will continue to review our foreign worker policy to ease the shortage of trained tourism workers, employers must also take pro-active steps to redesign existing jobs so that they will command higher wages, and become more appealing to locals.

Having sufficient trained workers will not be enough. The tourism industry needs to continue raise its service standards. In the World Economic Forum’s annual competitiveness survey on customer service last year, Singapore was ranked 26th, down from 17th position a year ago. This is a timely reminder that we have to raise our service standards if we want to remain competitive and attractive as a destination. While much has been achieved with the “Go the Extra Mile for Service” or GEMS movement, this is a road without end. We must maintain this momentum and continue to enhance our service standards. Only by a relentless pursuit of excellence could we ensure that visitors will leave Singapore with a memorable experience.

Looking Ahead to 2007

In the coming year, STB aims to achieve $13.6 billion in tourism receipts and 10.2 million in visitor arrivals. These aggressive targets are testimony of our confidence that the strong tourism performance could be sustained going forward. To this end, STB is building a pipeline of tourism projects that will capitalize on the heightened interest in Singapore as a tourism destination, following the award of the two IRs.

We have started 2007 on a high note. Messe Berlin, the company behind ITB Berlin, the world’s largest tourism trade show, has recently agreed to launch an Asian edition of ITB in Singapore come 2008. The decision to anchor ITB Asia here demonstrates Messe Berlin’s confidence in Singapore as a staging venue as well as the company’s optimistic outlook of the growth potential for tourism in the region.

ITB Asia is projected to grow from strength to strength over the next few years. I am confident that it will attract tourism exhibitors and trade visitors from all over the world, including tour operators, airlines and hotels, giving a boost to our MICE industry.

On the international front, STB will also be stepping up its efforts to tap on emerging markets showing strong outbound potential, such as the Middle East and Russia. STB will also be expanding its global presence with the opening of an office in Moscow in the first half of this year, bringing the number of STB offices worldwide to 23.

Just this morning, Marina Bay Sands held its ground-breaking ceremony. The ceremony signifies an important milestone of this project. I wish the Marina Bay Sands team well.

As we look forward to an exciting year, I would like to take this opportunity to thank you all again for your efforts and contributions in 2006. Let us continue to work together in making Singapore a compelling destination for all our visitors.

On this note, I would like wish you a pleasant evening. Thank you.