Singapore's Tourism Sector : A Comparison with Previous Downturns and Its Future Prospects

Singapore’s tourism sector was hit by several shocks in the last two decades, such as the 1997/98 Asian Financial Crisis, the 2001 recession coupled with 911 terrorist attacks, the SARS crisis in 2003 and the 2008/09 global financial crisis. This box article examines the trends in visitor arrivals and hotel industry during the recent financial crisis, and how they fared compared to previous tourism downturns.

The impact of the 2008/09 recession on visitor arrivals has been less severe andprotracted compared to the 1997/98 recession...

Exhibit 1 shows the index of visitor arrivals during past recessionary episodes. On a peak-to-trough basis, the SARS crisis had the deepest, but also the most short-lived, impact on visitor arrivals. While the recessions of 1997/98, 2001 and 2008/09 resulted in less steep declines in visitor arrivals, the recovery to pre-crisis levels also took longer. Comparing the impact of the various economic shocks on visitor arrivals, the following observations can be made:

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