SINGAPORE — The number of tourists travelling to Singapore has gone up, but they are spending less money while holidaying in the city-state, especially on accommodation.

In the first half of this year, 9.3 million tourists visited Singapore, a 1.3 per cent increase from the same six-month period last year, based on a report by the Singapore Tourism Board (STB) on how the tourism sector here performed.

Released on Wednesday (Oct 30), the report stated that tourists’ spending from January to June this year totalled S$13.1 billion, a 3 per cent drop from the same period last year.

The trend is similar for the April-to-June quarter this year. The number of visitors went up by 1.7 per cent from the same quarter a year earlier, but the amount they spent declined by 1.3 per cent over the same period.

Mr Poh Chi Chuan, STB’s director of digital transformation, said that the slide in tourists’ spending — also known as tourism receipts — is likely because visitors are more cautious due to “ongoing risk and uncertainties in the global economy”, such as the trade tensions between the United States and China, Britain’s looming exit from the European Union, as well as currency fluctuations against the Singapore dollar. 

He added that there was a slight increase in visitors who spent less time in Singapore. This is because of the way their travel itineraries are structured, including tourists such as cruise passengers or those visiting Singapore along with other destinations.

These visitors tend to spend less, Mr Poh said.

Among the five components of tourism receipts, accommodation saw the biggest year-on-year decline of 13 per cent in the first half of this year.

Mr Poh said that the fall was because more visitors are choosing to stay in lower-tier hotels, or with friends and relatives.

Mr Michael Chiam, a tourism lecturer at Ngee Ann Polytechnic, said that if travellers want to tighten their purse strings, they usually cut their spending on accommodation.

He added that there is a trend for travellers to see hotels as simply utilitarian, so they see no need to pay for accommodation with all the frills.

“People think, ‘As long as it’s reasonable, I’m not looking for a luxury stay, so I just pay the minimal.’ They also think, ‘I’m not going to stay in the hotel room throughout the day, so why should I pay so much for the room?’”

When asked whether home-sharing platform Airbnb had a role to play in the decline, Mr Chiam said that the illegality of Airbnb here meant that the number of tourists using it in Singapore would be “very small” and would not make an impact on the tourism receipts for accommodation.

Spending by tourists from China and India, two of Singapore’s top three source countries for visitors, also dropped over the first half of this year, compared to the same period a year earlier.

Chinese tourists spent 5 per cent less, while Indian tourists spent 12 per cent less. Spending by visitors from Indonesia, the other top three source country, rose 2 per cent.

Besides the slowdown in China’s economy, economist Song Seng Wun from CIMB Private Banking said that the weakening yuan could be a reason why spending habits by visitors from China are tightening.

The collapse of India’s Jet Airways in April this year could be a contributing factor for lower arrivals and tourist spending by Indian nationals.

In all, 1.8 million Chinese tourists and 747,000 Indian tourists visited Singapore during the first six months of this year.

Mr Chiam said that the sheer number of Indian and Chinese tourists coming into Singapore would mean that the number of travellers from these countries who are budget-conscious could be higher than usual.

Looking ahead, Mr Poh of STB said that the board expects some macroeconomic and external challenges to persist and that Singapore’s tourism performance would continue to be affected, particularly its tourism receipts.

STB would continue to diversify its market portfolio by marketing to tier-two cities in China and India, such as Chongqing and Jaipur.

“We will continue to enhance our wide range of attractions and events, as well as the rich cultural and heritage precincts and festivals that remain a draw for visitors,” Mr Poh said, adding that STB has a pipeline of tourism offerings, such as the further development of Mandai Nature Precinct and the Jurong Lake District.

“We are also committed to enriching visitor experience to encourage them to spend more time in Singapore. STB will continue to work closely with industry stakeholders to encourage day-trippers to extend their stay in Singapore, which will contribute to higher per capita expenditure.”