Mr S Iswaran at the Tourism Industry Conference 2012, 23 Mar 2012

SPEECH BY MR S ISWARAN, MINISTER, PRIME MINISTER’S OFFICE AND SECOND MINISTER FOR HOME AFFAIRS AND TRADE & INDUSTRY AT THE TOURISM INDUSTRY CONFERENCE 2012 ON FRIDAY, 23 MAR 2012, AT 0930 HRS AT MAX ATRIA @ SINGAPORE EXPO

NEW OPPORTUNITIES IN TOURISM

Chairman Mr Chew Choon Seng

Board members and colleagues from STB

Ladies and gentlemen

Good morning

Introduction

Last year was another good year for Singapore’s tourism sector, which has rebounded strongly from the economic downturn two years ago.  Our tourism receipts have almost doubled from $12.6 billion in 2009 to $22.2 billion in 2011.

There is still room to grow, but it will not be business as usual.  With a sluggish global economy, the United Nations World Tourism Organisation (UNWTO) estimates that tourism growth will moderate from 6.6 per cent (in 2010/11) to about 3 per cent over the next few years.  For Singapore, STB is projecting visitor arrivals to be between 13.5 – 14.5 million this year - an increase that is slower than the 13.8 per cent achieved in 2011, given a more challenging external environment and our domestic constraints such as labour.

Notwithstanding that, tourism continues to offer opportunities even in a constrained economic environment.  The rise of Asia is one important impetus for tourism growth which the UNWTO expects to be centred in Asia in 2012.  Against this backdrop, STB has projected tourism receipts to reach $23 – 24 billion in 2012, an increase of up to 8 per cent from 2011.  This is a conservative forecast premised on global economic uncertainty and moderate growth forecasts.

Looking ahead, we need to grow our share of tourism pie by increasing foreign spend rather than just visitor arrivals. There is significant scope to foster such yield-driven growth and create good jobs for Singaporeans - if we work together to re-engineer our tourism landscape, move up the value chain and seize growth opportunities.

New Opportunities Externally

It starts with knowing our markets.  STB has been studying the profile and needs of our visitors, especially those from our key source markets.  The trend is towards free and independent travellers, who are looking for varied, “modular” offerings, which they can experience at their own pace and are willing to pay more for.

In this regard, Singapore’s appeal as a lifestyle destination - with diverse shopping, dining, entertainment and heritage offerings - is an asset.  Nevertheless, there is scope for us to enhance the visitor experience and deliver better value across all segments in the tourism spectrum. 

China

One example is China - one of our top source markets with tourism receipts reaching $1.64 billion in 2010, a 22 per cent year-on-year increase.  Increasingly, Chinese travellers want personalised itineraries that allow them to experience Singapore in greater depth.  STB aims to meet that need with its “New Discoveries” campaign which was launched last year.  Under that banner, STB is pursuing win-win partnerships with major travel agencies in China, such as GZL International Travel Service, CYTS and Ctrip, to customise itineraries for Chinese visitors.

India

Similarly, STB recently launched “The Holiday You Take Home with You” campaign for the burgeoning India market - another key source market, with tourism receipts hitting $911 million in 2010, a 19 per cent year-on-year increase.  STB is partnering industry players to create bespoke experiences that appeal to the Indian tourists’ desire for unique and enriching learning experiences, which they can then share with their family and friends back home.  For example, STB is working with Thomas Cook (India) to offer thematic travel packages for families.  Mercury Travel has also come on board to co-create experiential learning culinary programmes, and romantic getaways popular with Indian travellers.

ASEAN

Nearer home, STB continues to explore measures to reinforce Singapore’s appeal in traditionally strong source markets like Indonesia and Malaysia. I urge all of you industry players to share your insights and ideas with STB so that we can capture the growth opportunities in these and other markets.

New Opportunities Through Innovation

STB is also keen to work with you on new ideas that can shape/re-shape our tourism landscape and deliver better value to our target audience.  The Formula One Singapore Grand Prix, River Safari and Gardens by the Bay are some examples of major projects that have catalysed the first stage of our development in this direction.  These and other enhancements (like the revamped Max Atria where we are seated) have brought our lifestyle, dining and business offerings to a whole new level.

We need to continually innovate to stay ahead of the curve.  Therefore, the Government is committing $905 million to the Tourism Development Fund as a second tranche – with about two-thirds ($640 mil) allocated for seeding new tourism ventures and projects over the next five years.  Some of these projects may entail investments in physical assets.  But, going forward, we want to place greater emphasis on the “software” aspects like the creation of content and events.  Industry partnership is essential for this effort to succeed and we want to hear from you on how we can make it happen.

I would also like to use three potential growth areas to illustrate the opportunities for such collaboration.

First, cruise tourism.  Our new International Cruise Terminal (ICT) will commence operations later this year.  It will double our berthing capacity and allow us to bring in much larger cruise ships.  This will catalyse the growth of cruise tourism in the region and add value to our economy.

Going forward, industry and government must work together to leverage on our strength as an air hub to develop more fly-cruise itineraries.  Good land-side itineraries are also key to attracting cruise tourists.  I encourage you to explore opportunities in this space with STB and our terminal operators.|

The arts and entertainment sector is another area with good potential.  STB has been working with other government agencies to lay the foundations for a sustainable art eco-system - with supporting infrastructure like the Freeport and Helutrans storage facilities, as well as arts hubs like the new Gillman Barracks.  Through events like last year’s Mnet Asian Music Awards, we have also made opportunistic forays into new entertainment spheres like K-Pop.  In our next phase of development, we want to partner you to co-create and anchor signature content that will attract even more visitors.

STB is also keen to grow the travel agent industry as a key enabler of tourism growth.  In that regard, STB’s strategy is to help local travel agents with established outbound businesses to grow inbound traffic.  STB also wants to attract global companies to set up innovative inbound operations here that draw traffic into Singapore and the region. These efforts will broaden our reach to key source markets and tourist segments whose projected growth may be more resilient.

These ideas are by no means exhaustive. and we look forward to a constructive dialogue with industry to forge partnerships in these and other areas.

New Opportunities Through Enhancing Productivity and Capabilities

Even as we seek to seed new tourism ideas, we must acknowledge and squarely deal with a key domestic challenge - the need for a better balance between local and foreign manpower to avoid over-reliance on foreign workers.  We do not underestimate the difficulty of this transition and must make a concerted effort to help our companies and workers move up the value chain and stay relevant.  The solution lies in building our companies’ capabilities and our workers’ productivity.

It is for this reason that we are investing the other third of our $905 million Tourism Development Fund ($265 mil) in programmes to help companies and workers rise above these constraints.  Broadly, STB will build on WDA and e2i’s basic tourism-related training to support more advanced, specialist training in key areas like conference management and attractions operations. We are exploring the development of tourism-related scholarships, to groom the next generation of managers and leaders for the industry.  We will also continue to support technology development and adoption as a means of improving efficiency and enhancing service delivery.

STB’s initiatives complement broader efforts by the National Productivity and Continuing Education Council (NPCEC) to raise productivity in the hotels, MICE activities, attractions, travel agents, retail and food services sectors.  For example, MOM and STB are studying how we can respond to industry feedback to relax occupational restrictions for foreign workers in the hotel sector.  This will give hotels the flexibility to deploy workers across job functions thereby optimising scarce human resources.  MOM and STB are currently working out the details which will be announced in due course.

Conclusion: Seizing Growth Opportunities Together

These are promising times for our tourism sector.  The challenges are real and we have to do things differently, and do different things, to overcome them and seize growth opportunities.

The Government is committing significant resources to this cause.  I am confident that industry, workers and government working in partnership will continue to be able to create new and exciting tourism products and experiences, while building up a highly skilled and competent workforce.

On this note, let me wish everyone a fruitful time at this conference and a successful year ahead.

Thank you.