S'pore tourism sector set to shine despite uncertainties

Singapore is expected to meet its record 2011 tourist arrivals target with ease, despite the strong Singapore dollar and a gloomy global outlook.

Analysts said source-countries for tourists are so far weathering the downturn.

Even while the Singapore economy slows, average room rates for hotels have gone up by 15 per cent from a year ago to around S$230, while occupancy levels are at more than 85 per cent.

Driven by the launch of the two integrated resorts, a record 11.6 million tourists visited Singapore in 2010.

Derek Tan, an equity research analyst with DBS Vickers, said: "Year-to-date, we have over six million visitors, which is over 50 per cent of STB's target of 12 to 13 million for this year.

"So I think we're on track to meet STB's target, given that we are still not even into the peak season yet. Typically the second half of the year is a stronger half for hoteliers - that is where we have the holiday season and the F1 (race)."

Tourist receipts are also expected to hit S$24 billion this year, up from S$18.6 billion in 2010.

Donald Han, vice chairman of Cushman & Wakefield, said: "There is still going to be a shortage of hotel rooms. This year, we'll probably be looking at about 1,900 rooms that will be in supply. I think overall the net demand that will be coming through from the increase in tourist arrivals would be able to absorb that 1,900."

Though analysts do not expect Singapore to match last year's 20 per cent jump in tourist arrivals, the stability of the source of those arrivals counts for much.

Mr Tan said: "We are a largely Asian-based tourist destination. About close to 85 per cent is driven from Asia - Indonesia, China, Malaysia, Australia and India are our main markets. So I would be concerned if there is going to be any economic slowdown from these five countries and at this moment, they are still looking fine in terms of their economic outlook."

If Singapore manages to skirt recession in the third quarter, it may have a lot to thank its tourists for.

Source - channelnewsasia