SINGAPORE'S inherent frailties in mass tourism were displayed vividly in 2003, when the Sars outbreak made a ghost town of the city centre. Those bleak days brought unheard-of fare discounting by Singapore Airlines (SIA) to fill seats. Snooty hotels cut room rates and went 'common' in packaging deals with airlines. Top-end Chinese restaurants advertised table-of-10 dinners at giveaway prices to tempt locals, to fill the slack in missing tour groups. But fear of disease made the tourist trade impervious to price blandishments. It was not until the world was assured that Singapore had defeated the Sars contagion, about four months later, that leisure and business travellers began returning.
Now the adversary is the global financial upheaval which will cut deeply into discretionary personal spending. The scenario facing the hospitality trade in the next year or so is not whether price cuts will enable tourist-dependent businesses to get over the slump without too much damage, but what else could be done. Singapore's vulnerabilities as a tour destination - not having natural advantages of history and architecture, landscape beauty and great beach resorts - require smart marketing by the trade to compensate for these shortcomings, more so in difficult times.
Figures from the Singapore Tourism Board (STB) just out confirm that a dip has begun. September arrivals fell, making it a fourth straight month of year-on-year declines. Hotel room occupancy is at its lowest in two years. Most tellingly, SIA's passenger traffic declined for the first time in three years. How bad it could all get can partly be glimpsed in the fact that the two casino resorts in Marina Bay and Sentosa are facing construction setbacks. Bold revenue and visitor projections have been made for them but their openings could be delayed, despite assurances that schedules were being kept. Delays would affect bookings for exhibitions and conventions which the STB is counting on as a counter-cyclical move to compensate for the fall in leisure travel.
Making themselves competitive with sensible pricing, relative to the regional competition, is what hotels and airlines need to do now, not 'wait and see'. Analysts and inbound tour operators are agreed room rates have not been realistic. The retail and restaurant trades and entertainment outlets cannot just hope to muddle through the recession either. Untold numbers of jobs could be at risk if a tourism famine strikes. Not only hotels but also downstream jobs in retail, tour services, transport and firms supplying hotels, airlines and restaurants are vulnerable. The STB reckons the 'challenging environment' will persist until next year. From the look of things, the trade would be prudent to assume a lean patch running into 2010.
This article was first published in The Straits Times on Nov 1, 2008.
