MINISTER, CHAIRMAN, STB BOARD MEMBERS,
TOURISM SECTOR PARTNERS, COLLEAGUES, LADIES & GENTLEMEN
1. Welcome to this year's Tourism Industry Conference.
2014 Was a Testing Year for Tourism
2. 2014 was a testing year for tourism performance. We saw a mixed performance across our key source markets.
3. While we achieved double-digit growth in International Visitor Arrivals or VA for markets such as Hong Kong, South Korea and Vietnam, this was outweighed by a fall in VA from China, Indonesia, Malaysia and Australia, our top 4 source markets.
However, Some Positive Signs for Quality Tourism
4. However, there were also indicators that we had made progress towards Quality Tourism. First, tourism receipts or TR held steady even though VA fell. Second, there is evidence that our visitor profile had shifted to a higher-yield one, compared to 2013.
5. We found that a higher proportion of visitors in 2014 stayed longer and spent more on average.
6. For example, visitors from China who visited Singapore as a single destination, also known as mono-Singapore visitors, grew 22% year-on-year. This supported a 44% increase in average length of stay (ALOS), from 3.0 days in 2013 to 4.3 days in 2014. Their expenditure grew 13% year-on-year primarily on accommodation and shopping. We also observed that they were more likely to visit paid attractions.
7. Similarly, more Australian visitors visited Singapore as their only destination (+8% year-on-year), resulting in a longer average length of stay (from 3.0 to 3.2 days). The expenditure of these visitors grew 4%, primarily on accommodation and F&B. Places they visited also reflected their preference for 'authentic' experiences, which allowed them to do a deep-dive into our local culture and heritage.
8. At the industry sector level, we noted that the hotel industry rates and occupancies held steady despite increased supply, and overall hotel industry revenues grew 7.2%. BTMICE businesses also reported higher revenues in 2014.
9. These are some signs of Quality Tourism gaining traction, even as we continue to keep our eyes on growing overall VA and TR. The 2014 results also signal a shift in the type of visitors we are attracting and businesses may need to make adjustments to cater to them, as I will elaborate later.
2015 Will Not Be Easier But There Are Opportunities for You
10. What can we expect in 2015? It is a mixed picture with a combination of continued headwinds and opportunities for growth.
11. For the first two months of 2015, we received 2.4 million visitors, a decline of about 5% year-on-year. Nonetheless, we still expect to achieve positive growth in 2015, in line with the VA and TR forecasts announced by Minister Iswaran. We expect to benefit from growth in outbound visitors from Asia, especially from China and India.
12. We also want to ride on our achievements and global accolades, from Lonely Planet, New York Times to CNN Traveller, to drive demand for travel to Singapore during Singapore's 50th year of independence, our Golden Jubilee year.
13. However, competition for tourism dollars has intensified as other destinations are also aggressively pursuing tourism growth. For example, in 2014, Korea's VA grew 17% (to 14.2 million) while Japan's grew 30% (to 13.4 million).
OPPORTUNITIES AMIDST A CHALLENGING PERIOD
14. There are growth opportunities for us, but we need to seize them by raising our game and gear up for growth. We must uplift our value proposition, innovate and transform ourselves to rise above competition. It cannot be business as usual.
15. Today, I want to share with you opportunities in 3 areas that you and your tourism enterprise can get involved in and benefit from:
i. Opportunities to partner with STB to drive VA and TR
ii. Opportunities to take advantage of growth segments;and
iii. Opportunities to create value through innovation and restructuring
Opportunities to Partner with STB to Drive VA and TR
Ramp Up in Marketing Efforts
16. Now, let me start with opportunities for you to partner STB's efforts in marketing. In 2015, we will ramp up our marketing efforts significantly to drive demand for travel to Singapore.
17. We will deepen our reach into key markets and expand our portfolio of markets.
i. For key markets such as China, Indonesia and India, we will invest more in the Tier 1 cities and more Tier 2 cities.
ii. We will also increase marketing efforts in growth markets that have strong potential as well as pipeline markets for longer term growth. Japan, Korea, Vietnam and Taiwan are some examples.
18. For our 2014 Integrated Marketing Campaigns, we have invested in big campaign ideas, turned them into entertaining stories in ways that connect with our target audience and strategically reached them through different media channels. We will build on this approach in 2015.
19. I will now show you a video montage to give you a flavour of our marketing efforts in 2014 and what you can expect in 2015.
20. You may have observed that our marketing campaigns are tailored for each of our key markets. For example, for Australia, we emphasise a richer, vibrant destination of cultural contrasts, and quirky and authentic Singapore experiences. Whereas for India, we showcase the iconic and world-class experiences of Singapore through a different storyline.
STB's Partnership with CAG
21. Besides our integrated campaigns, STB will also be making significant marketing investments in other areas. Last week, we announced that STB and CAG will invest a combined $35 million, our biggest collaboration to date, to jointly market Singapore and Changi Airport globally in key markets over the next two years.
22. Riding on the momentum of our previous overseas joint marketing campaigns, we will deepen our marketing efforts across the Asia-Pacific region. This will also be augmented by collaborations with trade partners such as travel agents, airlines and cruise liners to curate attractive packages and itineraries for visitors.
Jubilee Marketing Campaign
23. In addition, STB and industry partners will invest an estimated $20 million on a new global marketing campaign with exclusive deals and experiences to drive conversion and spend during our Golden Jubilee year. The kind of experiences and deals that consumers can expect to see will be split across 5 pillars – FLY, STAY, SHOP, EAT and PLAY.
i. FLY – With airline partners, we will be putting up attractive flight rates across markets.
ii. STAY – Hotel partners will be pushing out a "Stay 2 nights 3rd night free" promotion.
iii. SHOP – In partnership with a payment gateway, there will be special deals to entice shoppers. Retailers will also offer special deals.
iv. EAT – F&B players will offer special menus & dining experiences.
v. PLAY – There will be special SG50 itineraries (special tours with itineraries that highlight key milestones in Singapore's history), Pedestrian Night & other precinct and in-mall activities.
24. This campaign will be launched in May to coincide with the Great Singapore Sale and will be marketed in key markets with high conversion potential (Indonesia, China, India, Philippines, Japan, Korea, and Vietnam). This investment is over and above our existing integrated marketing campaigns.
How You Can Get Involved and Benefit Your Tourism Enterprise
25. How can you get involved and how can you benefit? STB will support you in the development and marketing of experiences and deals exclusively curated for our Golden Jubilee campaign.
i. [Marketing] We'll be investing heavily in media drivers to our site so that your products and services reach consumers in-market. So do get in touch with us to ensure that your special offerings are listed on our campaign website.
ii. [Experiences] For retail stakeholders, you can get involved by participating in precinct-wide activities, such as late night shopping along Orchard Road. We are also on the lookout for proposals that will provide value-added shopping services or exciting in-store or in-mall experiences to enhance Singapore's retail offerings. STB is also prepared to come in to co-fund such initiatives where relevant.
YS.com & Social Media
26. How else can STB help you with your marketing efforts? Harnessing the power of storytelling and advocacy has become a huge part of the marketing work we do. STB's destination website YourSingapore.com was revamped last year and it now brings together different stories and content from different voices (not just the STB's). You can use this site where the best suggestions and stories are housed to trigger our target audience to visit Singapore.
27. We are approaching 1 million fans on Facebook as we continue to widen our social reach. We encourage you to continue sharing your social media content with us so we can collectively engage our fans with destination content.
28. As Minister mentioned, STB will also be working with TripAdvisor to create an online hub named "Live like a Local" which shares Singapore stories through the eyes of local residents and visitors. To be launched this month, the hub will showcase a specially curated list lesser-known local areas or 'hidden gems' in Singapore and what visitors can see and do there. STB and TripAdvisor will be engaging some of you in an upcoming workshop to help better profile your establishments on the online travel review space. Stakeholders attending can expect to learn about the content and features on the hub and gain insights on how you can attract more customers through TripAdvisor. With your support, we hope to build rich local, unique and distinctively Singaporean user-generated content that will inspire more to visit Singapore.
29. For BTMICE, we will increase our marketing investment by 35% to build on the momentum we had in 2014. The aim is to generate even greater awareness of Singapore as an attractive MICE destination to support your business agenda. Our marketing activities include:
i. Brand building campaigns targeting Association Conventions and Exhibitions & Conference event organisers based in Europe and USA, and Meetings and Incentive Travel planners and intermediaries based in Asia Pacific; and
ii. Marketing campaigns by industry clusters to build event attendance in Asia Pacific.
Opportunities to Take Advantage of Growth Segments
30. I have covered opportunities for you to partner STB in marketing. I had earlier mentioned about signals in 2014 that the profile of visitors is shifting. Let me now share about three growth segments that provide good yield and how you can benefit from them.
Renewed Interest in Incentive Travel
31. First, Incentive Travel. With Singapore's strong MICE fundamentals and compelling leisure offerings, we have traditionally welcomed global business incentive groups. With increased efforts in business development and marketing, we have observed renewed interest in Singapore among incentive travel groups.
32. How can you, as an industry partner, take advantage of this renewed interest? Event organizers and incentive travel intermediaries have told us they are constantly on the lookout for the 'wow' factor in what Singapore can offer to their customers. Tourism enterprises need to not only offer a diverse range of meeting venue, accommodation, dining and leisure experiences, but you also have to curate them in a compelling and memorable way.
33. For example, the itinerary for the Forever Living Global Rally for 3,000 delegates showed that an entire day of fun can be wrapped around the island of Sentosa, with unlimited access to attractions such as Universal Studios Singapore and S.E.A. Aquarium, before culminating in a beach party on Siloso Beach.
34. For clients that are looking for a more educational itinerary, event organisers can curate programmes that explore Singapore's traditional cultures through activities such as scavenger hunts, heritage walks in cultural enclaves to a guided tour at the Intan Peranakan Museum.
Cruise Will Experience Significant Growth in 2015
35. A second growth segment is the Cruise industry. Over the next three to four years, a 5-8% compounded annual growth rate (CAGR) in passenger throughput is expected. This is complemented by an exciting calendar of cruise events in the coming year: Singapore will be welcoming 10 maiden calls, including Royal Caribbean International's newest and most innovative ship, the Quantum of the Seas which can carry over 4000 passengers. 2015 will also see TUI Cruises (which is strong in German-speaking markets) homeport out of Singapore for four months from November 2015 to March 2016 for the first time ever.
36. What does this mean for you, as precincts, hotels, attractions, retail and dining partners and tourist guides? The first would be to understand the needs of cruise passengers and then get into the business of shore excursions and pre/post cruise stays. Some questions you should ask yourself are "How can I improve point-to-point access of my products and services given their specific window of time in Singapore? Are there opportunities for fast-pass access packages that allow them to see the best of Singapore in a short time period?
37. Another insight on cruise is that travel agents continue to play an integral role in the cruise ecosystem. According to one report (Cruise Lines International Association's State of the Industry Report in 2015), even with the advent of online bookings via the Internet and mobile devices, 70% of global cruise passengers still use travel agent to plan and book cruise vacations. Travel agents who are trained and familiar with the wide variety of cruise products enjoy repeated bookings from satisfied customers.
38. Cruise is also an increasingly compelling proposition for the MICE segment, in particular incentive travel, as event organizers discover the attractiveness of on-board offerings and the all-inclusive value of a cruise package for their delegates.
Learning Travel is Another Segment Where Growth can be Expected
39. A third growth segment is Learning Travel. We see growing demand from travellers seeking to enrich themselves on an overseas trip whether it be students on overseas school trips or families with kids.
40. The Overseas School Trip segment has seen good growth in the last few years and is forecasted to grow at a CAGR of about 10% from 2014 to 2016. Combined with the strong desire of Asian source markets like China, Japan, India, Malaysia, Thailand and South Korea to travel with their children for enrichment, we expect even stronger growth potential for Learning Travel.
41. Similarly, there is also increased demand from working adults seeking to upgrade their skills through Professional Learning. This segment had 50,000 visitors at an estimated worth of S$600 million in 2013 and set to grow.
42. Again, we see opportunities for ground agents, tourist guides, accommodation providers, attractions and precincts stakeholders, retailers and dining establishments, to tap into this growth.
43. For both Cruise and Learning Travel opportunities, please join us in a combined break-out session later, where we will explore ideas and collaboration opportunities to develop products and experiences to meet these segments' needs.
Opportunities to Increase Your Value Proposition Through Innovation and Restructuring
44. I now come to the third opportunity set, which is the opportunity to increase your value proposition through innovation and restructuring. I will elaborate on 3 areas.
45. First, innovation in products and services. It is not sustainable for most tourism enterprises to compete on price. We should compete on value and constantly think about how we can better meet the needs of the increasingly discerning traveller. What do I mean? Let me share several examples with you, spanning public and private sectors, large and small players, and leisure and MICE illustrations.
46. Gardens by the Bay is an example of an attraction that despite strong visitor growth numbers, continually challenged itself to introduce new events to grow its customer base. In 2013, it introduced "Tulipmania", a Tulip floral showcase. In 2014, it added the very successful Christmas Wonderland in 2014. Through such efforts, the Gardens saw its visitorship grow 36% in 2014.
47. Universal Studios Singapore is another example of a large-scale attraction that continually adds innovative offerings and scales new heights. In 2011, it introduced Halloween Horror Nights. Every year, it pushed the boundaries on programming. In 2014 it doubled its foreign visitorship from the year before and drew 140,000 visitors. Visitors from China and India grew 5 times!
48. What about smaller attractions you might ask? Skyline Luge at Sentosa is one such smaller attraction, but is big on efforts to refresh their product. The company has constantly rejuvenated the attraction since 2008. Not only has Skyline Luge recently introduced a new trail as well as the addition of a canopy and LED lighting fixtures for differentiated experiences along the trails, Skyline Luge also expanded their ticketing and photo counters to increase business productivity. This has helped Skyline Luge sell more rides and grow overall revenue year-on-year.
49. Other than attractions, there are growth opportunities for events if you have a good concept and flair for execution. The inaugural Singapore Cocktail Week 2015 (7-14 March 2015), a recipient of our Kickstart Fund, is an example of a strong concept that celebrates the rise of the cocktail culture in Singapore and was a first-of-its-kind festival of pop-up cocktail bars, mixology workshops, seminars and tours surrounding our emerging cocktail scene.
50. There are opportunities in retail too. Despite a softer VA in January and February, Robinsons The Heeren succeeded in attracting more tourists and its tourist sales during this period achieved double-digit growth. How did Robinsons achieve this? Well, Robinsons has been forging partnerships with travel agents, tour guides and cruise lines. Robinsons also pro-actively shapes their shopping experience and tweaks their product offerings in response to feedback from their travel partners and tourists.
51. This facility we are in was opened in 1995. They know they need to keep refreshing their value proposition. Suntec's efforts to invest in technology and raise their service levels have contributed to them being voted the 'World's Leading Meetings & Conference Centre' at the Grand Final of 2014 World Travel Awards. This award is no small feat as it is collectively accorded by their peers, clients, partners and organizers versus global competitors.
52. The examples I've shared are testament to the need for and benefits from ingraining innovation in products and experiences. What should strike you is that these businesses were able to carve out good performance amidst a challenging period. I hope that these stories will inspire you and lead to even more success stories in 2015.
Leveraging on Technology to Grow and Innovate
53. A specific way in which we can innovate is by smartly adopting technology as a strategic differentiator for businesses. Technology can help you to:
i. Enhance and build visitor experiences
ii. Understand the profile of your customers and derive ways to meet those needs.
iii. Build customer loyalty and advocacy by engaging visitors on a more personal level
54. In 2014, STB organized a series of Hackathons, one of which was the 'Travel and Tourism Hackathon'. We have seen interesting examples of how digital tools can be used to provide intriguing experiences.
55. One example is The Detourist, a mobile App that won the main challenge at this hackathon. The concept stems from most travellers already having an idea of where and what they want to do when they travel. But what if there is more time to explore and to go 'off-route'?
56. This app helps to guide travellers from where they are, to where they want to be, with recommended unique detours in between to experience more of the destination say, hop off to a local kopitiam on-route to their end destination.
57. I will not reveal further spoilers but would invite you to attend the Technology breakout session if you are interested to find out more on how you can leverage on technology to create new concepts and visitor experiences. That session is also an opportunity to network with techies and app developers and to hear how some tourism players have worked with them to innovate.
STB's Pilot in River Safari Involving RFID Bands
58. In STB, we too are constantly exploring how technology can be incorporated to make our tourism products more attractive.
59. You may have heard about Disney's Magicbands. Their MagicBands are rubber wristbands embedded with Radio Frequency Identification or RFID chips. The wristbands led to greater spending per consumer, improved manpower productivity, reduced human error, and enhanced the visitor experience. They had a record revenue year on year and identified the Magicband as one of the key engines of growth.
60. We decided to try the concept out ourselves. We embarked on a prototype with Wildlife Reserves Singapore to test-bed RFID-enabled kiosks and wristbands in River Safari last month. Reactions from the ground indicated that guests enjoyed using the wristbands and the technology enhanced the retention of learning in a fun and interactive manner.
61. The team has since rolled out a second test-bed in Gillman Barracks to study the effectiveness of the system in improving way-finding and enhancing visitor flow through the compound. We will be sharing the findings and insights obtained with you all in the near future as we believe there is potential for this to be applied across customer segments, platforms and geographies. If you are keen to find out more or come onboard as a partner, do approach STB.
The Need to Restructure Your Business Processes
62. The third way to create new value is to restructure your business processes. A tight workforce is an issue that all business enterprises are grappling with. Tourism enterprises need to make use of available manpower more efficiently to ensure sustainable growth.
63. The Hotel industry has started undertaking extensive efforts to redesign jobs and change the way they operate to smarter ways. Minister mentioned the example of Hotel Jen at Orchard Gateway.
i. Another example is the Millennium & Copthorne International Group. The Group is reviewing several operational processes within the Group, to identify chokepoints and implemented solutions that are scalable across its five properties. These include a time-motion study of Studio M's front office operations to embark on necessary business process engineering. The ultimate goal is to reduce waste in duplicate processes and hence increase front office efficiencies.
ii. To help increase hotel productivity, we have launched the Hotel Productivity Centre last month. This is a dedicated, one-stop centre for innovation and productivity solutions, which will look at areas such as applied research to prototype new technologies, services and solutions that can then be shared and applied industry wide.
64. The story of process and business redesign is not just confined to the Hotel industry alone. Through a recent study trip to Europe together with some of our travel agents, we found that the European travel agent industry has adopted a higher value-added and higher productivity model which we can learn from.
65. For example, travel agents there have invested in technology and training, and they tap on experienced and passionate staff in different ways. For instance, UK-based Travel Counsellors, relies on an entirely home-based workforce of over 1000 to handle a sales turnover of about $800 million a year. We need to constantly look around the world for more productive models that we can learn from.
Closing Remarks – STB Will Partner You in Your Transformation Journey
66. What does all this mean for us? Tourism enterprises need to transform substantially in order to realise the full potential of the growth opportunities available. STB stands ready to support you and partner you in your transformation journey.
67. We will support your efforts to create new products and rejuvenate existing products through better market insights. The country-specific breakout sessions spearheaded by STB's Regional Offices will inform you on what in-market trade is looking for. Join us as we discuss consumer insights, our marketing plans and explore collaboration opportunities in Australia, China, India and Indonesia.
Tourism Marketing Labs
68. We want to help you improve how you market your products and services. Our vision is for the industry as a whole to market Singapore better.
69. The Tourism Marketing Lab, a quarterly initiative by STB, is a starting step to growing industry marketing competencies. Our vision is that in the near future, we as an industry will be able to market Singapore better as a whole, and forge a culture where stakeholders embrace best marketing practices and trends such as digital.
70. During the sessions, some of the latest trends, best practices, insights in tourism marketing, as well as from a markets' perspective are shared with our partners.
71. The inaugural session was held in August last year with our strategic partner, TripAdvisor. Participants learnt how to use TripAdvisor to better market their brands, products and events.
72. The second session in November consisted of digital marketing experts – from Google, XM Asia Pacific, Forrester and Resorts World Sentosa – focused on insights about today's digital traveler, and how tourism businesses can adopt better digital marketing practices.
73. Just last month, our third workshop, and the biggest one yet, brought in all the biggest players in China's digital space: Baidu, Alibaba, Tencent and Dianping to give deeper insights on how Singapore's travel trade can better connect with the Chinese consumer through their platforms.
74. The response from those of you who have attended these sessions has been good. We hope that you will continue to join our upcoming sessions focusing on content marketing, social media, and brand.
Supporting Leisure and Business Events more Aggressively
75. To help you elevate our game in the anchoring and development of compelling events, we have earmarked S$30 million from our Business Events in Singapore 2 (BEiS2) and Leisure Events Fund 2 (LEF2) programmes, to more aggressively support more quality events that drive tourism outcomes. So for applications that come to us in the coming year, we can support your projects at a higher percentage of qualifying costs, up to the maximum support level of 50%, for you to run your quality business or leisure events. Please approach our colleagues in the MICE and leisure events teams if you have ideas.
76. Next, to catalyse capability development and help encourage your tourism enterprise undertake initiatives that will address manpower challenges – The Business Improvement Fund support for SMEs in the tourism sector has been raised to 70% and with additional qualifying activities built in. For Hotels, the enhanced support of up to 70% will be made available to all SMEs. For non-SME Hotels, the enhanced support of up to 70% will open for application up to March 2016, and applicable for stakeholders adopting any of the 6 technological focus areas identified by STB and technology developers developing those technologies.
77. You would also have heard of our push to seed innovative tourism concepts through the expanded Kickstart Fund. Join us in this afternoon's Tourism Grants Clinic to find out more details on how you can gain access to these funds with less onerous requirements for you.
78. In conclusion, I would like to say that yes, the outlook in 2015 is expected to be challenging and we have our work cut out for us. But there are bright spots and good growth opportunities, so we must raise our game and not leave things to chance. STB is making a big push in marketing to drive visitorship and spend, and we would like to partner with you so your businesses can benefit.
79. As past experiences have shown, we can build on the tremendous success that we have achieved over the past 50 years when we put our minds and hearts together.
80. Thank you and I wish all of you fruitful discussions at the breakout sessions.
Please click here to download conference materials.