Singapore’s romance with Chinese tourists may be well and truly over now

New destinations are appearing on their radars.

Singapore’s romance with Chinese tourists may be drawing to a close despite aggressive efforts to reignite the spark.

According to Krishna Guha, analyst at Jefferies Singapore, Chinese tourist arrivals have dropped 3% year-on-year despite the Chinese Yuan’s appreciation against the Singapore Dollar in the same period.

“We see that visitor arrivals from nationalities which have experienced local currency depreciation relative to SGD have declined YoY. This is true for all nationalities except China. Though CNY has appreciated against SGD, relative appreciation is much lesser versus other currencies like JPY, EUR and THB. So, those countries are attracting China outbound tourism,” he said.

He added that Singapore’s charm for Chinese tourists might be waning because visitors are casting their nets wider and exploring more distant destinations.

“It is possible that local mainland tour operators are exploring new countries to expand their product offerings. Thailand, South Korea, Taiwan and Japan are experiencing double-digit growth in arrivals from China over the last 2 years. We think this is because 6-25% CNY appreciation against those currencies and perhaps desire of mainlanders to travel far and wide,” he noted.

And while the Singapore Tourism Board (STB) is stepping up its game to attract more Chinese tourists, Guha warned that these efforts are not likely to significantly boost visitor numbers.

 “New visa measures like Multiple Journey Visas and tie-ups with Chinese tour operators are expected to bring back inbound travelers. We remain hopeful of that outcome but we note that 54% of China inbound travelers are already repeat visitors. Given that arrival mix constitutes 40% tourist travelers, we doubt the number can go very high unless the proportion of business travelers start to increase,” Guha said.