FOXTROTS
Fox – sly. Trots – left-leaning (Trotsky) plus its more insalubrious meaning.
Foxtrots – leading the industry in a dance.
Destination Singapore; what’s wrong?
An excerpt from our monthly Travel Business Analyst newsletter.
Singapore’s DMO, the Singapore Tourism Board, appears to be like those politicians in power – denying what is obvious to almost everyone else. The danger is that until there is recognition that something is wrong, less will be done to try to correct it.
That visitor arrivals in 2015 grew only 0.9% is bad enough, but visitor spend fell more, 6.8%. We extrapolate those, to find that spend-per-visitor fell 7.6% to US$1072 (at US$1 to S$1.35), but because length-of-stay fell 2.4%, spend PVPD (per-visitor-per-day) fell less, by 5.3% to US$297.
The DMO notes that leisure arrivals grew 2%, “attesting to Singapore’s on-going appeal as a vibrant leisure destination”.
A 2% growth does that? We estimate AsPac’s total outbound travel grew 9% in 2015, so Singapore’s +2% might indicate to us that ‘Singapore’s appeal as a leisure destination fades’.
Also like politicians, the DMO ignores what it does not like, or cannot explain. For instance, the DMO was proud of the US$15mn it spent on promoting Singapore’s celebration of 50 years as an independent country in 2015.
As we noted at the time: ‘National pride has resulted in marketers thinking there is a sizeable number of non-Singaporeans that want to celebrate Singapore’s birthday by visiting it.’ Judging by the 2015 visitor numbers, we were right. And the fact that the DMO says nothing supports that sentiment.
(Unfortunately, we need to add that our comments are related to the travel business implications of Singapore’s birthday, and not to the actual celebration which, of course, was wholly justified.)
The question, then, is what is not working?
For us, Singapore has: a big recent growth in (good) new visitor products (including one, the Marina Bay Sands, that we put in the motivational-iconic category alongside Angkor Wat, Shwedagon Pagoda, etc); acceptable stability in exchange rates; no serious visitor-threatening negative incidents; sizeable government support for destination promotion and for those companies involved in visitor promotion; a near-world-No1 local airline; a surfeit of no-frills-airlines based in town; the world’s best airport; and reasonable visitor product prices.
We see a number of problems to solve, and we hope the DMO does as well. Most obvious, and shocking, is that three of the top-5 market sources fell in 2015 – Indonesia, Malaysia, Australia. Interestingly, the DMO does not break out market differences in visitor spend, and so it is not easy to determine if there are some markets that need more attention than others.
Additional comments:
-AAGR (annual average growth rate). This decade, AAGR has been almost 5%, well above 2015 growth. And thus for most of our selected markets, AAGR is above 2015 results – not a good sign. Above in 2015 compared with AAGR were China, Germany, India, Korea, UK, US.
-Share. China has doubled its share since 2000, which is the reason AsPac’s share has grown, thus pushing Americas down from 6% to 4%, and Europe from 15% to 11%. But before dismissing those non-AsPac markets, note that all four in our list grew faster in 2015 than their AAGR.
-Singapore-v-TotalMarket. Japan still bad, and that fall was slightly worse than the overall Japan outbound total, -4.1%. But the 22% growth for China was better – we estimate total China outbound was around +18%. For Korea, the STB needs to work harder – total outbound Korea was +20%. Likewise for India – we estimate total India outbound was +13% – and for the US +7%. (We do not have outbound travel data or estimates for all markets shown.)
The Fox
Remember, I’ll be famous after I’m dead.