Did Singapore Tourism Boom in 2015?

Singapore Changi Airport by Tony Lin

27 Jan Did Singapore Tourism Boom in 2015?

Changi Airport hits record high in retail sales was on The Straits Times two days ago (25 Jan 2016). I saw the same news on MyPaper and heard it on Kiss92 FM. It almost felt like an advertisement.

The first paragraph was written as such,

“Sales at Changi Airport hit a record high of $2.2 billion last year, on the back of growing passenger numbers.”

I was confused as I remembered 2015’s tourism was not significantly different from 2014, given my previous research in the hospitality sector.

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There was no number provided in the news article except and it was reported that,

“Passenger traffic figures are expected to be released next week.”

I am even more confused. If the passengers numbers have yet to be released, how does one know that the record sales was due to growing passenger numbers?

Curious, I went to the Singapore Tourism Board (STB) to investigate the numbers.

The 2015 numbers were updated till Nov 2015 at the time of writing, but the amount of data was sufficient to make a meaningful comparison with 2014. I have hyperlinked the data for your convenience.

I will also spare you from interpreting the data.

First, we compare the number of visitors travelling by air, from Jan to Nov for each year

  • 10,681,102 in 2014
  • 10,763,356 in 2015

Oh yes! It did increase for the first eleven months by almost 1%.

But retail sales grew at 8%!

This means that the claim about growing numbers of visitors led to the increase in retail sales was a small factor.

It was more likely that there was an increase in the average expenditure per traveller, or even among local shoppers, by the Changi Millionaire campaign launched by the Changi Airport Group (CAG).

Kudos to the CAG for the initiative. But the news article was misleading in painting a rosy tourism scene in Singapore.

Hotels in Singapore

Let us look at another dataset to get additional sensing on Singapore’s tourism.

Hotels in Singapore have experienced a declining Revenue Per Available (RevPAR) rate for the past 4 years.

Singapore Hotel Average RevPAR

This put pressure on the Hospitality Trusts in Singapore and the poor earnings are reflected in their stock prices. Most of the H-Trusts are trading below their book value.

  • Ascendas HTrust: 0.75 stock price > 0.72 book value (104%)
  • CDL HTrust: 1.28 stock price < 1.59 book value (80%)
  • Far East HTrust: 0.64 stock price < 0.96 book value (66%)
  • OUE HTrust: 0.745 stock price < 0.90 book value (83%)

To add salt to the wound, there are a total of 8,514 rooms in the pipeline. Based on 57,172 hotel rooms in Singapore as at 2014 (2015 hotel room numbers are not available), the increase over the next 5 years would be a rough estimate of 15%. This means the RevPAR would decline further if Singapore tourism does not grow at this rate. A 1% increase in tourism per year would not be enough over the next five years.

Singapore hotel room pipeline 2016-2020


Tourism numbers have not rose significantly in Singapore, as opposed to the rosy impression implied by the newspaper Article.

Hospitality Trusts were priced below their hotel valuations currently. Any decline in hotel income would result in lower valuations. Investors are also unlikely to see near term profits, given that the supply of rooms are on the rise, and tourism numbers remained flat.

Post Script

Some readers have pointed out other considerations in the emails and I would repeat them here.

Have you consider transit passengers at our 3 terminals? They will shop dine and wine too.

Check out the latest CAG news too.
SINGAPORE: The Changi Airport Group (CAG) on Wednesday (Jan 27) said it posted new benchmarks for passenger traffic and aircraft movements, with 55.4 million passengers passing through Changi Airport last year – a 2.5 per cent increase over the previous year.

In December alone, the airport operator said there were a total of 5.29 million passenger movements, representing the highest ever traffic the airport has achieved in a month since it opened in 1981.

This could contribute to the increase in sales too, and probably not captured in the passenger numbers.

Another reader also mentioned about the transits, and in addition, AirBnB’s competition against the hotels, which I believe AirBnB numbers were not reflected in the hotel stats.

1. New CAG retail model suggest sales’ correlation with SG visitor not as meaningful now – a) retail hub for locals. b) retail hub for transiting passengers as well (see http://www.changiairport.com/corporate/about-us/traffic-statistics.html)

2. Hospitality trust is facing pressure not just from tourism but also non-traditional competitors like AirBnB.


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