Singapore to become big beneficiary of Indonesia's bullish economy

48% of ASEAN tourists are Indonesians.

According to ICAEW, Singapore is likely to benefit from Indonesia’s strong domestic growth through increased tourism, but economic growth in the country is expected to remain relatively weak.

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The numbers reveal that Malaysia is the biggest tourist destination, ahead of Thailand. Despite its undoubted attractiveness as a destination, a closer look reveals the reason for this; three quarters of the 24.7m tourist arrivals are from within ASEAN and, of these, Singapore accounts for 13.4m.

Being separated by a short bridge, Singaporean residents, many with family ties in Malaysia, travel across the border on a regular basis. Malaysian residents account  for just 21% of Singapore’s ASEAN tourist arrivals, whereas Indonesians make up 48% of arrivals.

Taken together, Malaysia and Singapore account for nearly two thirds of intra-ASEAN tourists. There is large variation across the region. For instance, 80% of tourists travelling to Laos came from the region in 2011, compared with just 8% travelling to the Philippines. Overall, about half of the 80.5m tourist trips in ASEAN in 2011 took place within the region, a share that sinks to a third if Singapore and Malaysia are excluded.

As incomes rise in Indonesia, its neighbour singapore is likely to benefit from rising tourism spending thanks to its modern amenities, particularly the casinos that have proved to be a draw to tourists from the region.