Mr S Iswaran at the Tourism Industry Conference 2013

OPENING SPEECH BY MR S ISWARAN, MINISTER, PRIME MINISTER’S OFFICE, SECOND MINISTER, HOME AFFAIRS AND TRADE & INDUSTRY AT THE TOURISM INDUSTRY CONFERENCE 2013, MONDAY, 22 APRIL 2013, 3PM, MARINA BAY SANDS

“AT THE CROSSROADS OF OPPORTUNITY AND GROWTH”

Chairman Mr Chew Choon Seng and members of the Singapore Tourism Board

Partners and friends from the tourism industry

Distinguished Guests

Ladies and gentlemen

Good afternoon

It is my pleasure to join all of you at this year’s edition of the Tourism Industry Conference.  Over the past five years or so, I have witnessed the steady evolution of this Conference where it has become a significant event in the local tourism industry calendar. It is not just a networking activity but also an occasion for the diverse stakeholders in the tourism industry to collectively reflect on the state of the industry, and some of the trends and developments that have a material impact on the way the industry will be influenced moving forward. 

Looking back, much has transpired in Singapore’s tourism scene in the last five years. In 2008, there is the hosting of the world’s first Formula 1 night race in Singapore. In 2009, we were in the depths of the global financial crisis. But the rebound was swift in 2010, and that was further catalysed by the advent of the Integrated Resorts as well as other attractions and new facilities in our tourism landscape.  With the rise of the Asian travellers, we have experienced unprecedented rates of growth in visitor arrivals and tourism revenue. It certainly has been an eventful period for our tourism industry.

Tourism Industry at a Crossroads

The path that lies ahead of us is equally promising, and also no less challenging. It is timely and imperative that we take stock of our current and future operating environments and consider possible growth trajectories for the industry.

Externally, the growth opportunities in the tourism industry are clearly in Asia.  The UN World Tourism Organisation expects Asia to lead the growth in global tourism arrivals at 5-6 per cent for 2013 compared to the global average of 3-4 per cent.  The World Travel and Tourism Council expects Asia to do the same over the next decade on the back of rising wealth among its middle classes.  This presents a clear window of opportunity for Singapore to attract discerning travellers who seek out and are willing to pay a premium for differentiated experiences.

Domestically, we have made some important investments in tourism assets with their intended programming content. These include the Marina Bay Cruise Centre, Gardens by the Bay, Sports Hub, Gillman Barracks and the Mandai nature cluster, just to name a few.  Our events calendar is ever more colourful as well. We also have a nimble, adaptable Singaporean workforce that has helped us to sharpen our edge as a premier tourist destination.  

Making Tough Choices for Quality Growth

But, this window of opportunity will not remain open indefinitely. The opportunity for us is in a finite timeframe and is one that we must move to seize.  Many industry leaders have observed and shared with me that they are already feeling the impact of keen regional competition for the same tourism pie, and this cuts across various verticals of the tourism sector.  This challenge is accentuated by our internal labour constraints. This means that the recent strong growth in visitor arrivals is not sustainable. In other words, the growth model that is based solely on sheer quantitative growth is no longer viable.  At this juncture of our growth, we need to agree collectively and move decisively, as an industry and as individual businesses, towards quality yield-driven tourism and consequently devise and execute the strategies that will take us towards that goal.

The Singapore Tourism Board (STB) and the Ministry of Trade and Industry have been meeting various industry groups to exchange ideas in order to chart a shared path forward.  There is a general consensus that we need to reposition ourselves for more sustainable quality growth, of which the focus is on deriving yield from each visitor to Singapore. There is also broad agreement that even as we bring in new ideas and concepts from abroad, we must also focus our energy on creating our own distinctive content and programming that will continue to differentiate Singapore and set us apart from our regional competition. There is also the question of how we can help our workers acquire new capabilities, enhance their productivity and take on higher value jobs that support the industry’s and your own companies’ growth.

These are fundamental issues that challenge and will continue to challenge the way we do things now. They will entail choices that will be difficult at times and they require an ongoing conversation between the public and the private sectors so that we can converge and decide on the best path forward.  I am therefore very glad that STB is facilitating this conversation and framing the key issues in the discussion paper for this conference. 

Growth Opportunities in Tourism Software

One area with clear opportunities for sustainable high value growth is in the creation of programming and content, or “software”, especially in lifestyle offerings and business events. STB is keen to partner you to explore such opportunities, like in the Singapore Pinacotheque de Paris project.  STB and NParks are exploring with the Art Heritage Singapore consortium the possibility of customising the existing Fort Canning Centre "hardware” into a purpose-built museum with modern art from outstanding private collections, curated for an Asian audience.  These are still early days for the project, as the stakeholders are undertaking construction feasibility studies before proceeding.  However, if it takes off, it will be a first for Singapore and the region, and will help catalyse our arts tourism landscape alongside existing strong offerings like Art Stage Singapore and Art Week. More importantly, it is an example of how public-private collaboration can occur in practice in order to curate new ideas and tourism offerings.

As a global-Asia economic hub, we are also in a good position to deliver globally-relevant business event content, especially for strategic industry clusters that Singapore is seeking to build a competitive advantage. STB is thus giving even greater emphasis to business event programming, as strong content will build greater mindshare for Singapore and drive MICE spend in these domains.  For example, in the sustainable development space, STB partnered the Waste Management and Recycling Association of Singapore, NEA and Singex Ventures to introduce the WasteMET Asia exhibition and Clean Enviro Summit Singapore last year.  Together with the World Cities Summit and the Singapore International Water Week, Singapore attracted a total of 8,000 buyers, 19,000 global leaders and delegates from 70 countries in 2012. This is a testament to the thought leadership role in urban solutions that Singapore plays on the regional stage and our ability to leverage on that to create compelling tourism content.

These are just some examples of how we can work together to innovate and unlock more growth opportunities. There is significant scope for more innovation and we are keen to work with you to explore these.  Not just large-scale offerings like the ones I have described, but also smaller scale innovations which we hope to seed through STB’s new Kickstart Fund.  With an initial budget of $5 million and access to business advice from experienced hands in the industry, STB is keen to work with you to catalyse the development of compelling lifestyle concepts with strong tourism potential, adding to the software that will enliven our city. 

Making Growth Count for Singaporeans

If we shift towards yield-driven growth and more software-intensive activities, STB estimates that we can bring in 4-6 per cent more tourism receipts (TR) on an annual compounded basis over the next decade. Visitor arrivals in the meantime should moderate to 3-4 per cent CAGR over the same period.  This is quality growth that is sustainable.

We need companies to partner us in translating such growth into more diverse and higher value job opportunities for Singaporeans. Capability upgrading and productivity enhancements will be central to such efforts. STB will support you through targeted programmes that facilitate more flexible deployment of workers across job functions, technology adoption and business process enhancements.  These, coupled with broad-based assistance like the Wage Credit Scheme, will help our companies thrive and improve the career progression and wage growth prospects of Singaporeans. 

Some industry players have already embarked on this effort to raise their capabilities and productivity.  Park Hotel Group is an example who has successfully piloted a job-redesign scheme to enhance the value of its jobs and the group’s operational performance.  Through this “Hotel Operations Specialist Team” (HOST) scheme, Park Hotel trains and cross-deploys its staff across core functions within each property like the front office, housekeeping and F&B.  The hotels are able to optimise their limited manpower during peak periods, and the cross-trained specialists enjoy higher wages¹ as a result of the expansion in job scope – mutually beneficial outcome for both company and workers that we can all aspire to.

STB is also committed to helping industries grow their top-line by exploring new, higher value business opportunities and business models. The advanced skills that we are equipping Singaporeans with should help position companies to capitalise on such growth. Chief Executive of STB, Lionel will elaborate on the specific programmes which STB is implementing under the second tranche of the Tourism Development Fund totalling $905 million, and how we are already beginning to see changes on the ground.

Conclusion

So ladies and gentlemen, certainly there are hard choices to be made, but equally, there are also good growth opportunities to be had if we make a determined and concerted effort to make the necessary changes and move up the value chain.  I want to assure you that we do not underestimate the difficulties that we might face in this endeavour, but I am convinced that all of us will find the journey and outcomes worthwhile and rewarding, as we try new ideas in content creation, driving productivity and working towards upgrading our workforce in order to deliver new and differentiated solutions in the tourism space.

On this note, let me wish everyone a productive time at this conference and I want to thank you for inviting me.  

¹ Up to 50% more per month.