At a snail's pace: Tourism receipt growth wobbled on cash-strapped business travellers

It's a painstakingly slow growth in a decade.

Singapore Tourism Board may be having the hardest time in ten years as tourism receipts stagger to make their way up the charts, no thanks to the now cash-strapped business travellers who used to be among the biggest tourism spenders in Singapore.

According to CIMB's recent Cost of Living survey, approximately 59% and 41% of total respondents highlighted that room prices and the location of the hotel, respectively, remain the key determining factors when considering their hotel choice. 

The survey further highlighted that 87.6% of respondents paid between US$135 and US$240 per night during their stay in Singapore - indicating that most visitors surveyed prefer to stay in upscale and mid-tier hotels.

Here's more from CIMB:

In 2013, tourism receipts inched up by only 1.7% yoy – the slowest growth in a decade vs. 3.6-50% in 2009-2012. The slower growth can be partly attributed to lower spending by business travellers as corporates cut their spending, a weaker Indonesian rupiah and more visitors choosing to travel via budget airlines as they become more cost-conscious.

According to CEIC, since 2006, approximately 18-24% of tourist expenditure was spent on accommodation. With visitors’ growing focus on getting the best value for the price paid, we believe the upscale and mid-tier hotels in prime locations will outperform luxury hotels.

Growth in new rooms in 2014 is forecast to be 5.7% (an average of 3,200 rooms per year between 2013 and 2015). This high supply is expected to be mitigated by stronger tourist arrivals, estimated to be 5.2-8.4% yoy by STB recently.

As new supply gets digested, a stronger turnaround in the global economy, more events in 2014 and recovering corporate travel/spending are expected to stabilise RevPAR in 2014 after the weakness witnessed in 2013.