TOURISM (Measures to promote)

Dr Ow Chin Hock asked the Acting Minister for Trade and Industry (a) what is the projected occupancy rate for hotels and number of tourist arrivals for 1986, 1987 and 1988; (b) what measures have been taken to promote tourism; and (c) what is the latest status of tourist development projects.

The Minister of State for Trade and Industry (Dr Lee Boon Yang) (for the Acting Minister for Trade and Industry): Mr Speaker, Sir, I am answering on behalf of my Minister.

The projection for tourist arrivals in 1986 is 3.13 million; for 1987, 3.25 million; and for 1988, 3.41 million. As the number of hotel rooms in Singapore will still be increasing rapidly over the next few years, the Singapore Tourist Promotion Board projects that the occupancy rate of hotels will probably decline from 55% in 1986 to 50% in 1988.

To promote tourism, the Singapore Tourist Promotion Board will step up its marketing and product development efforts. Over the next three years, STPB will spend about $22 million annually to promote Singapore as a tourist destination in key markets in Asia, Europe, North America and Oceania. These are markets which have been identified to have growth potential.

STPB's strategy is to concentrate on promotion efforts that will achieve immediate results. New programmes have been drawn up to achieve this. These include direct marketing techniques, joint promotions with overseas tour operators and wholesalers, and a world-wide advertising and public relations programme.

STPB will also bid for more and bigger conventions and meetings to be held in Singapore. It has identified over 200 such meetings in the next two years. It will bid for these with the help of local professional associations. Some of these conventions involve as many as 10,000 delegates. The total number of overseas participants in convention-related events is expected to reach about 200,000 in 1986, an increase of 13-14% over 1985.

The other important area is product development, which is the development of tourist attractions in Singapore. STPB will accelerate development projects which will stimulate more tourist arrivals, in par- ticular those which generate repeat visits, and also extend visitors' length of stay. This will include recreating elements that give Singapore its charm and mystique. The aim is to create a stronger image for Singapore as an attractive value-for-money tourist destination.

Projects in the pipeline include the enhancement of existing attractions such as Haw Par Villa, Singapore River, Fort Canning Park and Sentosa. In addition, projects are being undertaken to conserve and revitalize historical sites such as Chinatown, Little India, Kampong Glam and the colonial city centre. In the long term, a possible new key attraction will be a theme park.

Dr Arthur Beng Kian Lam (Fengshan): Mr Speaker, Sir, two supplementary questions. (1) Will expenses incurred in promoting tourism overseas by individual hotels or the Singapore Hotel Association be made tax deductible? (2) Is there any plan to develop a beach resort in view of the proposed closure of Apollo Sentosa?

Dr Lee Boon Yang: Mr Speaker, Sir, regarding the tax deductibility of promotion expenses incurred by hotels for overseas promotional exercise, I think this matter will have to be taken up with the Finance Ministry. But the Singapore Tourist Promotion Board will render the necessary assistance or other organizational support to help individual hotel owners who want to make promotional efforts in overseas markets.

As to the development of a beach resort on Sentosa island itself, this is one of the key areas which STPB will be focussing its effort. Actually the intention is to enhance the beach resort facility on Sentosa island itself and to promote the development of a first-class beach resort together with a hotel.

Dr Ow Chin Hock: Would the Minister of State agree that a multi-racial and multi-cultural society is an attraction to tourists? If so, what are the plans to preserve temples and other religious buildings as well as names of streets, for example, Chinese street names in Chinatown.

Dr Lee Boon Yang: Mr Speaker, Sir, I am not aware of any programme to change all the Chinatown Chinese street names to some other foreign names. I believe all the names will be preserved, as they have been for so many years.

Regarding the preservation of areas of traditional historical interest, I have already stated in my answer that it is the intention of STPB to help in the development and preservation and the enhancement of areas of Singapore which have a historical interest, such as Chinatown, Little India, Kampong Glam and the colonial city centre. These areas will be retained for their historical value and also as future tourist attractions.

Dr Augustine Tan: Mr Speaker, Sir, does the STPB monitor the prices of food and drinks in hotels?

Dr Lee Boon Yang: Mr Speaker, Sir, yes, STPB does monitor prices that are being charged in hotels and other tourist restaurants. STPB is aware that there has been an occasion where a tourist has complained of over-charging in such tourist outlets. STPB will be investigating this complaint and seeks the cooperation of the restaurant or hotel operators to prevent the recurrence of such over-charging.

Mr Chiam See Tong (Potong Pasir): Mr Speaker, Sir, I read in the papers that the only hotel in Sentosa, the Apollo Sentosa, is about to close down. Did I hear the Minister of State -

Mr Speaker: Where is your supplementary question, Mr Chiam?

Mr Chiam See Tong: Did the Minister of State say that the Government intends to build another hotel at the beach resort there in Sentosa?

Dr Lee Boon Yang: Apollo Sentosa is going to close down for its own reasons. The Government through the Singapore Tourist Promotion Board will launch a new effort to improve the facilities that are available on Sentosa Island itself. The beach itself will be resurfaced to bring it up to a higher standard. It will be provided with more resort-type facilities in order to make the operation of a resort hotel more viable and the possibility of a commercial success. It has nothing to do with the closure of Apollo Sentosa.

Dr Augustine Tan: Does the Minister of State have a classification of our hotels according to the star categories, five star, four star, no star, whatever, and the number of rooms in respect of each category?

Dr Lee Boon Yang: If the Member for Whampoa would like this information, we can certainly provide him with this classification of hotels and the availability of hotel rooms in Singapore.

Dr Augustine Tan: Does the Minister of State agree with me that perhaps we have built too many four and five star hotels, and if we are going to promote tourism in the places where people do not have too much money, then we have to provide lower grade hotels?

Dr Lee Boon Yang: Mr Speaker, Sir, I do not believe that there is a shortage of economically priced hotels in Singapore, particularly at this moment when many hotels have trimmed their rates. I do not believe it is true that there are tourists who want to come to Singapore and have been deterred from coming, simply because our hotel rates are too high now.

Dr Augustine Tan: Does the Minister of State foresee the closure of some of these hotels because of lower occupancy rates?

Dr Lee Boon Yang: Sir, most of the hotel industries are operating at a fairly low level of occupancy rate and the prediction is that it will continue to drop to 1988. Hotels will have to try their very best to achieve cost reduction in their own operation. They will have to use innovative ideas to attract tourists to stay in those particular hotels. For instance, I am aware of hotels which have organized package stays, including the provision of shopping vouchers. These are techniques that can be used to bring people to fill up the rooms. I think it is necessary for them to continue to exercise their imagination in order to attract visitors.

Dr Augustine Tan: Does the Minister of State have any idea what is the occupancy rate below which hotels are not viable?

Dr Lee Boon Yang: Mr Speaker, Sir, this would depend very much on the type of hotel, when was the hotel built, what was the cost incurred and also how is the hotel being operated? What is the standard of management? There is no uniform industry rate.

Mr J.B. Jeyaretnam (Anson): May I ask the Minister of State to what extent, if any, does the Singapore Tourist Promotion Board cooperate with the Malaysia Tourist Corporation to sell both countries, as it were, in a package deal to tourists? Sir, they can use Singapore as a stepping off place, spending a day here or two, and then going on to Malaysia or other places.

Dr Lee Boon Yang: Mr Speaker, Sir, STPB has been working very closely with the Malaysian Tourism Promotion Authority. We have indeed organized such joint package tours where tourists staying in Singapore can take sight tours to Malaysia. This is constantly being promoted and, as the Member for Anson must be well aware of, we have also explored other opportunities to go into joint tourism development. For instance, the plan to provide a ferry connection between Changi and the Desaru holiday complex is just one of these means of linking up tourist attractions in both countries.

The Acting Minister for Trade and Industry (BG Lee Hsien Loong): Mr Speaker, Sir, if I may supplement the comments of my Minister of State, with regard to the point raised by the Member for Potong Pasir, as to why we are starting a beach hotel in Sentosa when Apollo Sentosa has just closed down, and with regard to the questions raised by the Member for Whampoa, as to whether we think there are enough two and three star hotels in Singapore and what is the reasonable occupancy rate for hotels.

The questions assume that it is the Government's duty to find out the number and do something about it. It is a wrong assumption. Apollo Sentosa has not been viable. It is winding up. Does that mean that Government concludes that we need a hotel, and that we will promote it and fund it? It does not. What the Government will do is to improve the infrastructure on Sentosa - improve the beach so that you will have cleaner sand, wider expanse of sunshine and ocean; improve the facilities, the attractions. Then if anybody comes and says, "Yes, a beach hotel is a viable proposition" and want to venture his money, we will welcome him. If nobody decides to establish a beach hotel, well, so be it. Sentosa will be the poorer.

The same goes for two and three star hotels. Are there enough? Well, that is a matter for the market to decide. If entrepreneurs think there are not enough, and that there is money to be made from building two and three star hotels, I think they can be trusted to do so. Indeed, I am surprised to hear an economist suggest to the House that the Government should decide what is necessary and what should be built. I would have thought the experience of the last few years was sufficient caution against such approaches.

Dr Augustine Tan: Mr Speaker, Sir, will the Acting Minister agree with me that in a recession it is the duty of Government to analyse all the causes behind the recession and to suggest remedial measures? And one of the first things to look at will be the state of the hotel industry. And if the pricing is wrong, the distribution of rooms is wrong according to the star categories, then something should be done about it; perhaps not directly but by informing the hotel sector about it and by preventing further foolishness in future.

BG Lee Hsien Loong: Mr Speaker, Sir, we either believe in the invisible hand or we believe in a command economy. If we believe in the invisible hand, then it is the Government's duty to make information available on prices, on occupancy rates, on trends, and it is up to entrepreneurs to decide whether on that basis they want to venture their money. I have had it said to me by a hotel entrepreneur who built a hotel about five years ago, on the strength of the Government's projections of tourist arrivals, "That is all the Government's fault. You said the tourists would come. Now the tourists have not come. I have an empty hotel. So what are you going to do about it?" Well, the answer is, the Government cannot do anything about it. Whatever data we provide, where they are factual, you can take it that we have tried our best to get it right; and where there are projections we have tried our best to look into a cloudy crystal ball. That is all that the Government can assure.

Mr Chiam See Tong: Mr Speaker, Sir, did the Acting Minister hear what his Minister of State stated just now? He said that a hotel together with a beach resort would be developed at Sentosa. That is why I was surprised and I brought up this question in the first place.

BG Lee Hsien Loong: Mr Speaker, Sir, part of the master plan for Sentosa comprises a beach hotel and a beach resort. Whether that part of the master plan is realized depends on whether an entrepreneur decides that there is money to be made and that is a viable project. If so, it will be built. If not, there will be none.