Tourism sector has been one of the major industry and contributor to Singapore economy. According to Singapore Tourism Board (STB), 2016 hit a record of 16.4 million international tourists and generated $24.8 billion. The government has allocated $905 million to STB to fuel up the tourism developments by investing it with manpower competency and conference management.
Over the years from 2013 to 2015, the top 5 countries with the most visitors to Singapore are: Indonesia, China, Malaysia, Australia, India. Among them, only Australia belongs to the top 5 affluent countries (countries with highest GDP per capita: Switzerland, Australia, USA, Netherlands, UK).
To fully maximize revenue from underdeveloped markets through insights from existing tourist behavioral patterns towards retail and local attractions.
- What is the visiting trend over the recent years for countries of interest?
- What are the types of products to promote to each country?
- What are the types of attractions to promote to each country?
- What is the target market to be improved?
- What might be behind the trend of visitors from these countries?
- What are the top products being bought by visitors?
- What are the top visited attractions?
- How to influence visitors from target market to spend more?
- How to increase visitors to the local attractions?
- Top 5 countries with the most visitors.
- Top 5 countries with the highest GDP per capita.
- Trend of visitors from each country over recent years.
- Top 3 retail spending for each country.
- Top 3 paid attractions for each country.
- Top 3 free attractions for each country.
Insights into Top Visiting Countries
Insights into Top Affluent Countries
In 2015, the top visiting countries account for 8 million visitors while the top affluent countries account for only a total of 1 million visitors, an eighth of prior. Hence, there are definitely areas within the local tourism industry that can be optimized and improved.
Background on world economy
Since 2010 until now, World Bank’s data reveals that there are 3 predominant countries with consistently growing GDP per capita and population, USA, India and China. With USA being the fastest in income growth, India being the fastest in population growth and China in between. USA being the most affluent amongst them and China being the most populated.
Trend of visitors
Indonesia and Malaysia travelers in the list of top countries with most visitors was not a surprise due to the proximity, ease of travel and some families ties in Singapore. Most of them are repeating visitors who are already familiar with Singapore offerings. STB managed to lure them back by making them engaged on what are the latest and new happenings in Singapore with the “Your Singapore Live” campaign and providing easy access from package bookings, flight and event information. Although there was a 10% decline in 2015, last year (2016)’s figure for Indonesians had increased 6% . STB is putting more effort to make sure Indonesia remains our number one market.
The total number of Chinese visitors has declined significantly to 1.7 million in 2014 due to the Malaysian Airlines aviation disasters happened in the same year, because a large number of Chinese tourists visit the city as part of a package that includes Malaysia and other countries in Southeast Asia. The number slowly recovered to 2.1 million over 2015, then increased to 2.86 million tourists in 2016, as the travelers finally put the disaster memory behind.
Different from the declination of visitors from other countries, the 2014 and 2015’s figures for Indian visitors had increased. According to Euromonitor, Singapore is expected to register a 59% jump in arrivals from India from 2015 to 2020. The number of arrivals from India increased 15% in the first five months of 2017. This is mostly due to the increasing trend of cruise traveling among Indians .
Among the top affluent countries and the countries with top visitors to Singapore, however, the figure for total Australian visitors is decreasing, though slowly, since 2014 till 2016. In 2017, STB and Singapore Airlines are promoting Singapore as “the stopover holiday”, as Singapore Changi airport is usually the Australian tourists’ layover en-route hub to other destinations.
The trend of visitors from other affluent countries: the number of tourists from UK and USA though not among the top, but is still increasing. Meanwhile, the number of tourists from Switzerland and Netherlands slowly dropped from 2014 to 2015, but recovered again in 2016, given the small population of these two rich countries, the increment is significant.
STB has been successful in the marketing campaign on the target audiences. All the top 5 countries with most visitors are in its key target market list. Each of these countries have been uniquely advertised according to how these countries perceived Singapore.
Since 2014, Singapore has remained as the most expensive city in the world , hence one of the strategies is to boost up Singapore tourism is to focus on the most affluent countries as they can be the top spending tourists despite smaller in quantities; while still maintain the high flows of tourists from the two largest populations – China and India – as well as our neighbors, Indonesia and Malaysia, who are still at the top as countries with most visitors to Singapore. In order to do so, our team has tried to dig deeper into the habit of tourists from these countries: how these international tourists spent money in Singapore, and what their most visited attractions are. From these figures and graphs, we tried to come up with more insightful results about our goal.
Top retail spending
The top 3 segments being: Fashion, Beauty & Healthcare, Gifts.
Fashion and accessories have been the top items being bought in Singapore. This is not a surprise because a lot of international designers and shops have established in Singapore. They have seen Singapore as a strategic regional hub especially trying to reach out to Asian markets. Same goes for beauty cosmetic, perfume and healthcare category that is second in the list.
For economy of scale and to align the overall strategic focus on the top 3 retail segments. USA is identified as a potential candidate to further boost the tourism industry. Being one of the most affluent and populated countries, it is amongst the lowest in top retail spending, there is potential for synergistically growing the top retail segments that tailor to this group of visitors which could also help bolster the overall USA visitors.
The trend of spending the most in fashion, beauty products and healthcare categories is not limited to visitors from the top 5 countries with most visitors, but also is the spending trend among tourists from the affluent countries. As Singapore remains the shopper paradise in Asia and the region’s leading capital in total visitor expenditure, to target visitors from the aforementioned affluent countries, we might pay our focus more on how to make the fashion trends and service quality in Singapore more adaptive to the USA and these European countries’ preferences and cultures.
Although not being mentioned in the chart, but food and beverages are also among the most spending target, especially for tourists from USA. The total spending in this category was up by 24% from 2015 to 2016 . With Singapore’s rich and various cuisines range from East to West, low to high cost, street food to luxury restaurants, we should consider a long campaign about Singapore food diversity to these new markets.
Top paid attractions
There are two main categories of attractions which are entertainment and nature related. In entertainment, there are Integrated resort, Gardens by the bay, Sentosa and Singapore Flyer. In nature related, there are Night Safari, Singapore Zoo, National Orchid Gardens, Jurong Bird Park and River Safari. The top three paid attractions are in entertainments, maybe due to accessibility for the tourist and the unique experience they provide to the tourist. All nature related attractions are quite far and maybe inaccessible for tourist especially if they have tight schedule. STB could study how they can improve the visiting rates for these natures related paid attractions.
The top paid attraction is on integrated resort, this is consistent with the figure of 2016, as 24% of total receipts are for accommodation, up by 28% compared to 2015 . This could be a result as Singapore usually the layover hub for most of flights from and to Australia, China, and Southeast Asia countries. Besides the variety of luxury hotels and resorts of all the most famous names in the world, one of the type of accommodation that we might invest more in to lure more Western traveler is the traditional and cozy homestay.
Without the bless of rich beautiful nature scenes as of other big countries, however, we have been very successful in promoting Gardens by the bay as most unique sight in Singapore. The sight was rated as the number one in things to do in Singapore on TripAdvisor. Although with a similar natural theme and diverse concepts, but the total visitors to River Safari, Zoo, Orchid Gardens, Jurong Bird Park, Night Safari are much fewer than the figure for Gardens by the bay. Instead of building more gardens like Gardens by the bay, we should invest more on these existing sites with the more unique themes, always-changing scenes, a wider marketing campaigns, and maybe an easier route from the city’s center.
Top free attractions
In line with Fashion being the most popular retail segment in Singapore, Orchard road – Asia’s most famous shopping streets, home to fashion favorites, specialist stores and loads of other lifestyle choices – is the most visited site among the free attractions.
As more and more visitors from China and India, the other most visited free attractions of these tourists are Chinatown and Little India. Indonesian and Malaysian travelers definitely share the same trend, although they prefer Orchard road over these two destinations.
Regarding visitors from the affluent countries, the percentages among these three top attractions are quite balance, with Chinatown’s figure is slightly more preferable.
Conclusion and Further Discussion
2015 has seen the declining of numbers of visitors from most of the countries we have analyzed on. However, these figures have been recovered in 2016, and are continuing to increase this year as STB has successfully organized wide and various campaigns in the five countries with top visitors: Indonesia, China, Australia, India, Malaysia.
Beside the quantity of visitors, we are to expect to hit a new record on total spending by tourists this year. Among the most buying product categories are fashion, beauty products, accommodation.
Align with the spending trend, the most paid attractions in Singapore are, in descending order, integrated resorts, Garden by the bay, Sentosa; the most visited among free sites are Orchard road, Chinatown and Little India.
With the overview on Singapore tourism industry, in this report we focused on strategy to attract more tourists from the top affluent countries: Australia, Switzerland, Netherland, UK and the USA, as with the wealthy condition, they can be the top spending tourists despite smaller in quantities compared to others.
In regard to buying trend, we suggested to focus more on how to make the fashion trends and service quality in Singapore to be more adaptive to the USA and these European countries’ preferences and cultures. We also suggest to consider a campaign about Singapore food diversity to these new markets, for example USA, as Americans tend to spend more on food and beverages in Singapore.
As tourists are spending more on accommodation, we can invest more on our local hotels quality and quantity, but also should not overlook homestay with traditional styles, which can be much more attractive to the Western travelers.
One of the uniqueness of Singapore is our multi-cultures, multi-languages, food diversity. Travelers from Western countries can experience many rich Southeast Asia cultures: Chinese, Indian, Malaysian … in a small city. This can be another winning point for Singapore to get more and more tourists from the affluent countries from far West.
Last but not least, our report although walked through an overview of the picture of Singapore Tourism industry, with the focus on improving revenue on the new market – the affluent countries – we limited ourselves with the analysis on trending of number of visitors, buying products, paid and free attractions; there are still plenty of other aspects to be analyzed to make the strategy completed.
Data Collection and References
Submitted by KE5106 Team 5
Bui Kim Dung (A0163434J), Gerry Anggacipta (A0163261M), Tew Boon Teck (A0163462H), Yong Jun Jie (A0163438B), Yong Lester Monar (A0163415L)