Singaporean staycations can’t fill $20b tourism gap

Bloomberg

In Indonesia, locals can soon fly from Jakarta to the beaches of Bali for a domestic vacation. Tokyo residents can escape the pandemic stress with a hike in the mountains, and New Yorkers can head to the Hamptons on Long Island.
Residents of Singapore, a city-state smaller than New York City, have few such options, presenting a massive problem for its battered tourism industry. With borders closed to foreigners, hotels and tourist attractions need to count on ‘staycationers’ to plug the gap in an industry that brought in almost $20 billion in revenue last year. It’s a tall order.
“Unless we have a return to international business, the hotel industry is going to be decimated as up to 90% of our bookings come from international travelers,” said Michael Issenberg, CEO of Accor SA’s Asia Pacific unit, the largest hotel operator in Singapore.
While tourism everywhere has been hammered by the pandemic, the gradual opening of some domestic travel has given a shot in the arm to airlines and hotels in places like Australia and Vietnam. Rosewood Hotel Group has seen occupancy rates as high as 70% at some of its China properties as leisure travel picks up, said CEO Sonia Cheng.
Singapore’s tourism sector faces a tougher challenge, as the hotels were just given a green light last week to request approval to welcome domestic tourists. Many locals like teacher Najeer Yusof prefer to save their money and wait for travel to resume in nearby hotspots like Thailand and Malaysia rather than spend it on a hotel down the street.
“There’s more to see and experience overseas at a cheaper cost,” said Yusof. There’s also the “awe factor — getting to see or experience something I won’t otherwise be able to in Singapore, like the mountains and national parks in Indonesia and activities like diving and surfing.”
Though the country of 5.7 million people has reopened its economy after a lockdown of more than two months, its borders are still closed. It recorded a historic low of just 750 foreign visitors in April, down from 1.6 million in the same month last year. May’s numbers weren’t much better, at 880.
“In the short-term, hotels, eateries and attractions can re-orientate to draw interest to staycations, attractions or food discounts,” said Selena Ling, head of treasury research and strategy at Oversea-Chinese Banking.
Tourism has been an increasingly important industry for Singapore, helping to diversify the economy from its traditional strengths of finance, oil refining and shipping.
Singapore’s tourism sector, which employs about 65,000 people, contributes about 4% to gross domestic product.