Mr S Iswaran at the Singapore Tourism Board (STB) Tourism Industry Conference (TIC), 5 Mar 2010

OPENING ADDRESS BY MR S ISWARAN, SENIOR MINISTER OF STATE FOR TRADE & INDUSTRY AND EDUCATION, AT THE SINGAPORE TOURISM BOARD (STB) TOURISM INDUSTRY CONFERENCE (TIC) AT RESORTS WORLD SENTOSA, COMPASS BALLROOM EAST ON FRIDAY, 5 MARCH 2010, 0935HRS

Ladies and Gentlemen,

Good morning

Introduction

I am pleased to join you at this year’s Tourism Industry Conference.This annual forum is an occasion for tourism industry stakeholders to take stock of the past year and look ahead to the challenges and opportunities that lie ahead.

Resilience Amidst Challenges

Global Economic Downturn

It would not be an overstatement to say that 2009 was an exceptionally challenging year. The deepest global economic recession since the Great Depression and the outbreak of the H1N1 virus soon after, made for challenging times in the tourism industry. The forecasts were dismal.The World Bank projected that global GDP would contract by 1.7 per cent in 2009.International tourist arrivals and global tourism receipts were expected to decline by 4 and 6 per cent respectively. STB anticipated that visitor arrivals to Singapore in 2009 would fall to between 9 and 9.5 million, and tourism receipts to be in the range of $12 to $12.5 million.

Industry has held up better than expected

Despite that downbeat backdrop, our tourism sector proved to be resilient and delivered a creditable performance.Visitor arrivals last year exceeded STB’s forecast (9 to 9.5 million) to reach 9.7 million. At $12.4 billion, our tourism receipts also reached the upper end of the expected range ($12 to $12.5 billion). Employment growth in the hotel and retail sectors started to pick up in the third quarter of 2009, in contrast to the previous downward trend.

Improvement in growth, led by Asia

Looking ahead, there are good reasons to be optimistic about the opportunities that lie ahead for our tourism industry.The UN World Tourism Organisation says that international tourism arrivals will grow by 3 to 4 per cent this year. Asia is expected to lead this trend with a growth of at least 5 per cent – symptomatic of the broader economic shifts that are taking place.

This bodes well for Singapore, and there are early indications of dividends from this macro trend. Visitor arrivals registered overall positive growth in the last quarter of 2009 and this momentum continued into 2010 with a record 908,000 visitors in January.

Singapore: Well-Positioned to Ride the Recovery

As the global economy led by Asia embarks on the recovery path, Singapore is well-positioned to ride this growth trajectory. Our key enabling attributes are connectivity, the ability to capture mindshare and create memorable experiences. Let me elaborate.

Improved Connectivity

Our lattice of connections to Asia has made us a key node in the region, and the network continues to grow.Last year, ChangiAirport established 14 new city links including destinations in Asia such as Ipoh, Kuantan and Shantou. Six airlines, like India’s Kingfisher Airlines and Malaysia’s Firefly, have also commenced operations at Changi. Jetstar Asia has committed to make Singapore its largest air hub in Asia for both short and long haul operations.

Capturing Asian Mindshare

Our efforts over the past few years to transform our tourism landscape, coupled with our branding initiatives, are also starting to pay off. In 2009, FutureBrand ranked Singapore as the Fourth Top Country Brand for tourism travel in the Asia Pacific region. We also enjoy a large market share of outbound traffic from regional markets such as India and China. According to PATA (Pacific Asia Travel Association) Tourism Forecasts[1], we are the top destination of choice for outbound travellers from India with a projected number of over 840,000 outbound visitors to Singapore in 2010. Singapore was also highlighted as one of the top eight countries[2] that Chinese travellers identified as a planned destination according to the 2009 Nielson China Outbound Travel Monitor. This leave us well poised to drive Visitor Arrivals and Tourism Receipts growth in the coming years.

Creating Memorable Experiences: A Diverse Tourism Scene and Vibrant Global City

Today, Singapore offers a compelling value proposition to travellers. Many initiatives undertaken in recent years have contributed towards a more vibrant and diverse tourism landscape. Last year, the makeover of Orchard Road was completed with three new retail malls opening in quick succession – ION Orchard, 313@Somerset and Orchard Central – adding some 100,000 square metres of exciting retail space. Our hotel room inventory was boosted by 2,700 rooms offering visitors a wider choice.

Looking ahead, there are many more tourism product offerings in the pipeline with upcoming projects such as the Universal Studios Singapore here at Resorts World Sentosa, the Marina Bay Sands, the new International Cruise Terminal in Marina South, Gardens by the Bay, the National Arts Gallery, and the launch of exciting events such as the Asian Fashion Exchange. The Formula One race and ‘F1 Rocks’ will continue to add buzz and glitz to the city. Collectively, they will enhance Singapore’s stature as a vibrant global city with a distinctive lifestyle that draws repeat visitors.

Collective Responsibility to Transform Industry

These high profile projects underscore the significant investments that are being made in our hardware infrastructure. But this alone cannot ensure the transformation, success and growth of our tourism industry.We need a concomitant investment in the software to enhance productivity and quality as the basis for sustainable value and employment in the industry.Skills, Service and Innovation underpin this effort.

Skills

First, we need to enhance our workers’ skill level by providing them with regular opportunities to learn, improve and upgrade themselves. In the tourism sector alone, a plethora of CET (Continuing Education and Training) courses already exist in areas ranging from Culinary Arts to Hotel Service. To fully leverage on these opportunities, we need employers who are supportive of their employees going for skills upgrading; and we need employees who have an open mind and are ready to take on new challenges.

Apart from upgrading, endowing our workers with multiple skills (multi-skilling) enhances their prospects for career advancement whilst raising the productivity of the enterprise.For example, Sheraton Towers Hotel restructured and did away with cashiers and waiters at their F&B operations. Instead, they created "Assistant Manager" positions which entailed a wider job scope, with higher compensation. It is a good illustration of how CET training coupled with a re-view/re-design of jobs can bring about benefits for the organization while enriching the job experience for the workforce.

Service

Second, we need a resolute commitment to raise service standards in the industry. Today we compete in the global premier league of the hospitality sector.Visitors to Singapore have the same service standard expectations as they would of other global cities.We need to go beyond the basic niceties such as a smile and cheerful greeting – although these remain important they are no longer sufficient.Neither is it simply a numbers game about having more staff to serve the customers. Rather, the emphasis is on knowledge, communication, customization, attention to detail, and timeliness We need to redefine our service standards, and re-engineer the way we do things to meet these higher expectations.It requires a total response from the enterprise and the individual, and technology can be an enabler.The Holiday Inn Atrium, for example, has installed a digital concierge booth which allows them to cater to the different expectations of guests, and differentiate between those who require personal attention vis-a-vis those who simply require information on the go and prefer a digital interface.

Innovation

This brings me to my third point on innovation. We need creative responses to rising global competition and customer expectations.We need process and product innovations, which harness technology to create new value propositions.I understand that at Crowne Plaza Changi, they are piloting the I-Schedule program.It allows the hotel to deploy manpower resources in accordance to business needs by taking into account factors such as the minimum manning requirement per shift.This enables CrownePlaza to enhance productivity and achieve optimum business effectiveness.

The future competitiveness of our tourism sector rests critically on our software which is underpinned by skills, service and innovation.It is an effort that calls for a response from all levels – the individual worker, the enterprise, and the industry as a whole.It is the collective responsibility of the tourism industry to work on initiatives to transform the sector, with particular focus on productivity and service standards, and take it to a higher level. Companies and employers must foster an environment that is conducive to skills upgrading, talent development and migration to higher value added activities.Employees must embrace these changes with an open mind and commit themselves to continuing education and training.The government and its agencies stand ready to be your partners in this important endeavour.

The Economic Strategies Committee has emphasised the importance of productivity – at the industry, enterprise and individual level – as the basis for Singapore’s future growth.This year’s budget has created the means, through the formation of the National Productivity and Continuing Education Council among other initiatives, and allocated substantial resources towards this purpose.All that remains is for us to apply our collective experience, expertise and energies to transform the industry and position it for the next phase of growth.

Conclusion

Significant opportunities lie ahead of us.But the tourism industry must transform and adapt itself to the emerging competitive challenges in order to seize these opportunities.To succeed, we need to further strengthen collaboration between the government and the industry, enterprises and their workers.Above all, we need creative ideas, clear initiatives and firm action.This forum is well placed to catalyse all three.I wish you all a productive conference.

[1] This refers to the 2007 Pacific Asia Travel Association Tourism Forecasts for 2009- 2011

[2] 2009 Survey by AC Nielson had Singapore ranked 6th, after Hong Kong, Macau, Taiwan, Japan and France.