Singapore is expected to experience a slowdown in tourism and gaming in 2024 due to escalating competition in the region, says Tradeview Capital Sdn Bhd CEO Ng Zhu Hann.
Tradeview Capital is a fund management company licensed by the Securities Commission Malaysia. In an interview with AGB, Ng notes that Singapore’s tourism market already sees some slowdown even though the local government is still investing a lot of money to attract concerts and organize conferences and exhibitions.
Ng observes that the visa-free policy with China has been expanded to Thailand, Singapore, and Malaysia, along with the accelerating recovery of regional travel destinations. Singapore’s further growth in 2024 is facing more competition.
Singapore received 13.6 million international visitors, with most of them coming from Indonesia, China, and Malaysia. The figure was 71 percent of the international visitor arrivals recorded in 2019. However, the number was double compared to 2022.
The Singapore Tourism Board reports that the country’s tourism receipts exceeded expectations, reaching an estimated range of S$24.5 billion ($18.2 billion) to S$26 billion ($19.3 billion), surpassing the forecast of S$21 billion. Additionally, the average rate for hotel rooms rose to S$282 ($209), surpassing pre-pandemic levels.
Furthermore, the tourism board projected that the travel industry would continue its recovery in 2024. This resurgence is attributed to enhanced global flight connectivity and the implementation of a 30-day visa-free travel policy between China and Singapore.
The number of visitor arrivals is expected to reach 15 to 16 million this year, which will bring S$26 billion ($19.3 billion) to S$27.5 billion ($20.5 billion) in tourism receipts.
Leveraging concert sponsorships for economic growth
Ng indicates that Singapore has benefited from its political stability, as well as the government’s investment in boosting visitation.
“I think Singapore has very little negative news or political instability, unlike Thailand, where there were elections. They were also affected by many rumors and scams, where people caught in them would flee to Myanmar and Cambodia to be part of syndicates.”
Among Thailand, Singapore, and Malaysia, the top travel destinations in Southeast Asia, “Thailand was somehow affected [by rumors]. Then it left Malaysia and Singapore as destinations to look at. I think Singapore really did very well because the government focused a lot on opening up the economy after COVID,” he noted.
In particular, the insider exemplifies that the Singaporean government has launched a series of policies to encourage visitation. Sponsored Taylor Swift concerts are a good example to explain.
In 2023, Singapore welcomed renowned international performers such as Blackpink, Jacky Cheung, and Robbie Williams. This year, the lineup of sold-out shows in the country features Coldplay, Taylor Swift, Bruno Mars, and Ed Sheeran.
According to reports, Thailand’s prime minister has alleged that Singapore attempted to strike a deal with Taylor Swift to prevent her from performing in other parts of Southeast Asia during her Eras tour. The Singaporean government allegedly offered ‘subsidies’ of $2 to $3 million per show.
In this context, the exclusivity of some performing shows has been key for Singapore becoming a leading role in attracting tourists.
Agoda, a leading travel platform in the Asia-Pacific region, reported a significant increase in search activity for accommodations in Singapore during Coldplay’s concert dates. The company noted that interest for those specific dates surged by 8.7 times following the commencement of ticket sales last June. Agoda attributed this spike primarily to neighboring countries such as Malaysia and Indonesia.
In addition, Ng notes that besides the concerts, the Singaporean government has put effort into organizing finance-related conferences last year, which attracted more investment fund-related travelers to Singapore, thus securing its role as a business travel destination in Asia.
According to an analyst from HSBC, these large-scale global music events are a boon for Singapore’s travel-related services that can add up to 10 percent of its GDP.
Catalyst for growth
Singapore-based integrated resorts (IR) have unveiled their multi-billion-dollar expansion plans, set to materialize in the coming years.
Speaking to AGB, Tradeview Capital CEO Ng Zhu Hann believes that investing in more facilities will definitely help attract more tourists to the country, serving as a catalyst for gaming revenues. However, he questions, “How fast can these casinos recoup the costs? That is a different story.”
Ng emphasizes that the investment is not only due to the potential for growth but also reflects a commitment from Singaporean authorities to maintaining their casino licenses.
“The situation in Singapore is very unique because the government is very smart. The casino is only one aspect. They know casinos bring negatives… They also want to highlight the positive aspects, such as tourism, job creation, and economic activity in Singapore.”
Marina Bay Sands (MBS) is poised to spend $4 billion on expansion. Earlier this year, Singapore’s Urban Redevelopment Authority (URA) greenlit MBS to construct its fourth tower, featuring 587 rooms.
The expansion project includes the construction of a new hotel tower with 1,000 rooms and suites, MICE facilities, a 15,000-seat arena, and a rooftop swimming pool.
At the same time, Genting Singapore approved a $5 billion expansion plan for its resorts last November, a significant increase from the original S$4.5 billion ($2.8 billion) investment.
The development plans encompass the expansion of Universal Studios Singapore and the S.E.A. Aquarium, which will transform into the Singapore Oceanarium, along with the addition of 700 new hotel rooms and a new waterfront sculpture.
Singapore exhibited encouraging results in 2023. Reports indicate that the combined gaming revenue of the two IRs in Singapore reached S$5.25 billion ($3.9 billion), marking a significant surge.
This increase was attributed to a robust final quarter in 2023. During 4Q23, Singapore’s gaming revenue experienced a notable uptick of 56 percent, amounting to S$1.42 billion ($1.06 billion), with MBS outperforming Resorts World Sentosa.
Notably, MBS saw its net revenues exceed $1.06 billion, a significant rise from the $853 million recorded in 4Q19, with mass gaming revenue increasing by one-third compared to the pre-pandemic quarter, reaching $583 million.
