TOURIST ARRIVALS (Measures to arrest declining rate)

Mr Rohan bin Kamis asked the Minister for Trade and Industry what are the reasons for the declining rate of tourist arrivals in Singapore; what is the impact on our industries especially the hotel industry of this declining rate and what steps are being taken by the Singapore Tourist Promotion Board to attract more tourists to Singapore.

Dr Tony Tan Keng Yam: Mr Speaker, Sir, in 1982, the number of tourist arrivals to Singapore increased by 4.5%, less than half the growth achieved in 1981. The growth in our tourist arrivals began to slow down significantly in the middle of 1982. In December 1982 and January 1983, we experienced for the first time in many years declines of 3.3% and 2.9% respectively in tourist arrivals.

There are several reasons for the declining rate of tourist arrivals. The key factor is the recession in the traditional tourist generating markets such as Europe, USA, Australia and some of our Asian markets. The effect of the recession on the tourism industry has not been peculiar to Singapore. Most countries experienced either declines or very low growth in tourist arrivals in 1982. Growth in world tourism slowed down from 1.3% in 1980 to 0.85% in 1982.

The slower growth is also partly due to the fact that, in terms of cost of hotel accommodation, Singapore has become an expensive city to visit compared to other Asian competitor cities. Over the last four years, hotel room rates in Singapore have doubled.

The hotel industry has felt the impact of the slower growth in tourist arrivals. The average hotel occupancy rate fell from 85.7% in 1981 to 80.8% in 1982. In January 1983, it fell further to 73.2%.

In line with the fall in tourist arrivals, the growth in real output of the hotel industry dropped from 10.4% in 1981 to 4.5% in 1982. The restaurants and the retail trade sector also showed slower growth in real output of approximately 5% in 1982 compared to a high growth rate of 9% in 1981. Similarly SIA no longer experienced the brisk business of the previous years; the passenger-kilometres covered by SIA grew by only 5%, less than half the rate in 1981.

To arrest the decline in tourism growth, the following measures have been taken by the Singapore Tourist Promotion Board:

(i) Firstly, STPB has revamped its marketing and promotion strategy. The Board is placing more emphasis on markets such as USA and Japan which are expected to recover sooner from the recession. STPB has also intensified its promotion in new markets such as South Korea. New marketing tactics which have more direct influence on potential travellers have been introduced. These include postcard campaigns and in-store promotions in large department stores in Europe and Australia. More imaginative publications and promotional materials are also being used, many of which have been of prize-winning quality. More media and TV crews from the major tourist generating countries have been invited to Singapore to generate greater news coverage and awareness on Singapore. To get greater mileage from its marketing promotions, the Board has also stepped up its joint promotion programmes with airlines, hotels, travel agents and other tourist related organizations.

(ii) Secondly, STPB has stepped up its efforts to promote Singapore as a Conventions and Exhibitions Centre. Conventioneers and exhibitors generally spend much more than the average tourist. The results of STPB's efforts have been heartening. The number of conventions involving regional and international participation increased from 158 in 1979 to 270 in 1982.

(iii) Thirdly, STPB has devoted greater attention to developing our tourist infrastructure. More recreational and cultural activities such as the Dragon Boat Races, the Mooncake and Kite Festivals have been organized or sponsored by the STPB to make Singapore a more lively place and to induce tourists to stay longer in Singapore. Apart from this, STPB is also encouraging investors to develop new tourist attractions in Singapore. These investments will, however, take time to materialize.

I expect that 1983 will be a difficult year for the tourist industry. While the STPB will re-double its efforts to attract more visitors, the tourist industry must also play its part. I would urge hotels, travel agents, department stores and other members of the tourist industry to increase their own marketing efforts and to provide good value and service. It is only through such joint efforts that we will achieve a healthy and vibrant tourist industry in the years to come.