MINISTER, CHAIRMAN, STB BOARD MEMBERS
TOURISM SECTOR PARTNERS, COLLEAGUES, LADIES AND GENTLEMEN
1. A very good morning to all and welcome to TIC 2016.
TIC Journey over the Years
2. This is my fourth Tourism Industry Conference since I joined STB.
3. At my first TIC in 2013, we shared a discussion paper on Quality Tourism. The paper outlined STB's strategies to secure Quality Tourism growth. Think of Quality Tourism being about Quality Visitors, Quality Destination, Quality Industry and Quality Local Engagement.
4. Quality Visitors give us the best returns in terms of economic contribution. Quality Destination provides visitors with a differentiated experience that is unique to Singapore. Quality Industry gives us sustainable growth that is innovative, productive and manpower-lean. Quality Local Engagement ensures that we develop a successful tourism sector which Singaporeans are proud to participate in.
5. In 2014, I elaborated on each of these aspects, with a call to action for industry to get even more involved in partnership with STB.
6. In 2015, I spoke about opportunities in what we anticipated to be a challenging year. I shared about growth segments like cruise, incentive travel and learning travel, as well as opportunities to partner with STB to drive conversion.
7. I want to thank industry for the strong support for the Golden Jubilee campaign, where Singapore Airlines and MasterCard, together with more than 130 industry stakeholders came together to offer special deals and experiences. Thanks to the contribution from this effort, we managed to grow leisure visitors by 2% in 2015, although business visitor arrivals and overall spend was negative.
8. So far, in 2016, we are off to a stronger start, with visitor numbers growing 12.3% y-o-y in the first two months. But the global economic outlook remains weak and uncertain. For the full year of 2016, we have forecasted a growth of 0-3% for Visitor Arrivals and 0-2% for Tourism Receipts.
Sharpening our Strategies towards Quality Tourism
9. This year's theme for TIC is 'Sharpening our Strategies towards Quality Tourism'.
10. Minister shared earlier that government has set aside $700 million in a new five-year tranche of the Tourism Development Fund. This will support industry efforts in line with our push for Quality Tourism.
11. Today, I want to highlight three areas where we have sharpened our strategies towards Quality Tourism:
i. First, I will share our marketing strategy for the next five years, including which source markets and customer segments we are targeting;
ii. Second, I want to cover the potential for innovation and technology to enhance visitor experiences and transform the way tourism enterprises work.
iii. Third, I want to shine the spotlight on our manpower initiatives for the tourism sector.
YIELD-DRIVEN MARKETING APPROACH
12. STB adopts a yield-driven approach to marketing. This means deploying our marketing dollars for maximum economic impact.
13. My colleagues in Marketing have been consulting and brainstorming with marketing professionals and industry members about how to sharpen our marketing approach. We sought clarity about (i) the story we want to tell; (ii) who we want to tell it to; and (iii) how we tell it. Let's watch this video to find out more.
14. Of Stories, Fans and Channels. Let me say something about each.
15. Having just celebrated SG50, I daresay we are more confident about who we are and what makes us special. This story of us, of Singapore, is the one that we want to tell. And I believe we can tell it authentically and in a way which arouses the interest of overseas audiences to want to visit and discover Singapore for themselves. It is thus opportune for STB to review our destination's brand and narrative.
16. When we have settled on this brand story, we want to use it consistently, even as we tap on different voices and ride on trending conversations in different parts of the world.
17. Beyond a great brand story, which fans should we target? Which parts of the world should we focus our efforts on?
18. Our top five source markets of Indonesia, China, Malaysia, Australia and India will remain important.
a. We will be intensifying trade engagement and marketing efforts in these markets.
b. In addition, we will ramp up our efforts in high-growth secondary cities like:
i. Surabaya and Medan in Indonesia,
ii. Tianjin and Chongqing in China, and
iii. Ahmedabad and Hyderabad in India.
19. This push into secondary cities served us well in 2015 and we will press on with this effort. It is also in line with Changi Airport's plan to establish more air connections between these cities and Singapore, thereby cementing our position as a vital air hub.
20. I was in Hyderabad two weeks ago to engage the travel trade there and to better understand this emerging source market. In 2015, visitor arrivals from India grew 7% overall, but Hyderabad grew 16%. Hyderabad is fast challenging Bangalore to be the IT hub of India. Global tech giants like Google, Facebook and Apple are investing in major campuses there, creating jobs for thousands of well-educated Indians who will now have the means and desire to travel abroad more frequently. Lots of working millennials and double income families with young children there!
21. As the large economies of India, China and Indonesia grow, a similar transformation is taking place in other secondary cities and Singapore tourism is well positioned to take advantage of this.
22. To diversify our source markets, we will also explore and enter newer markets like Myanmar, which has started to open its economy. Where we see opportunities, we will also seek more visitors from mature long-haul markets in Europe and the US.
23. Take Germany for example. Those of you who study STB's statistics on visitor arrivals by markets may have noticed that Germany's growth rate has ballooned in recent months. Between Oct 2015 and Feb 2016, arrivals from Germany grew at 40% on average, bringing us 47,000 more German arrivals in these months compared to the year before. The main reason for this? We managed to attract more cruise ships which cater to the German-speaking market to start and end their cruises from Singapore. Let's work together to capture more value for Singapore during their pre- or post-stays with us.
24. In July 2016, SIA is launching a new non-stop flight from Singapore to Düsseldorf, which will bring even more German visitors to Singapore.
25. As STB taps on these source markets to grow visitor arrivals, I hope that tourism industry players will respond nimbly to seize these opportunities.
26. We have a number of market-focused breakout sessions lined up today. My Regional Office colleagues and market experts from industry will be sharing their insights into the markets of China, India, Southeast Asia and Europe.
Identified Customer Segments
27. Within our key source markets, which customer segments should we focus on?
28. As you would have seen from the video, the fans for our story can be viewed in four distinct customer segments.
The BTMICE Traveller
29. Today I'd like to talk about business travellers and MICE attendees, or BTMICE segment in some depth. This customer segment has traditionally been a strong one for Singapore. We have a great reputation as a business events hub. We have world-class meeting spaces and infrastructure.
30. This is an important segment economically. As a whole, they constitute one-fifth of our overall Visitor Arrivals, yet contribute one-third of our Tourism Receipts. They are a very high-yielding segment, spending on average 2 times as much as a Leisure traveller.
31. While BTMICE performance was mixed in 2015, it was primarily due to the decline in BT segment. Other destinations, such as South Korea, also reported a drop in regular business travel, due to cutbacks on corporate travel and trip budgets. Unfortunately, BT is a segment that we have little influence over. However, in the area of MICE or business events, where we do have some influence, we posted a strong showing in terms of visitorship and tourism receipts.
32. In 2015, STB supported 27% more business events as compared to the previous year. This helped generate almost 300,000 Visitor Arrivals and almost half a billion dollars in tourism receipts.
33. The business events outlook for this year continues to look rosy. In fact, we are expecting this year's business events performance to surpass that of 2015. We have secured a strong pipeline of events for 2016, as a result of heightened interest from international associations and event organisers. This includes Spine Week and the International Society for Magnetic Resonance in Medicine Annual Meeting, both of which are happening for the first time in Singapore.
34. We will continue to aggressively support quality MICE events that bring in large numbers of higher-yield visitors. We will thus also be increasing our support for local industry players through the Business Events in Singapore fund (BEiS). Two new initiatives:
35. First, we will now support business development initiatives that are entirely industry-driven. This will allow us to support three or more business entities coming together to collaborate and undertake joint business development initiatives.
36. To give you an example, a MICE venue, a destination management company (DMC) and a cluster of hotels can now be supported for their joint effort to go after an incentive group or other large scale business event.
37. Second, we recognise that associations need to start their lobbying activities earlier in order to increase their chances of successfully bidding for association events. As such, we will now support local association members to attend relevant global business events prior to a bid for an event.
Other Customer Segments
38. The other customer segments we have identified are: families with young children, working millennials and active silvers.
39. As a leisure destination, Singapore has traditionally been strong in the family segment. This segment has potential for growth, having grown at a CAGR of 14 percent over 2012 to 2014. We believe that we have a "right to win" as do 66 percent of visitors from our top 14 markets, who saw Singapore as a suitable destination for families in a visitor experience survey conducted by STB.
40. We have a good range of products and experiences that have been family favourites not just for tourists, but also for Singaporeans. The recent opening of Kidzania is a welcome addition to our suite of family-friendly offerings. But we must do more and we must do better, because the competition for this segment in Asia is fierce.
41. There is scope for us to have more events that will be a hit with families. A good example of a new event in this category is Christmas Wonderland. Christmas Wonderland had a very successful second run in Gardens by the Bay last year. Over 5 weeks, this event offered entertainment and f&b in a festive fairground atmosphere. It attracted a total of 1.6 million attendees, and we estimate that 40% of them were overseas visitors. Together with other attractions and events like the festivities and light-up along Orchard Road at that time of the year, we can strengthen our position as the go-to leisure destination for families.
42. We also think it is worth studying further the segments of Working Millennials and Active Silvers. Why?
43. By 2020, millennials are expected to make 320 million international trips each year, a 47% increase from 217 million in 2013. Working millennials are attracted to Singapore's vibrant lifestyle and unique cultural offerings. Our burgeoning arts and entertainment scene is also a contributing factor to our appeal.
44. In Asia, the populations of Japan, South Korea, Hong Kong and China are rapidly ageing. Moreover, a McKinsey report (2016 "Urban World – The Global Consumer to Watch") predicts that retirees and elderly in developed countries will fuel 19% of the global urban consumption growth from 2015 to 2030. Singapore is suitable for Active Silvers who are looking for a safe destination that is easy to get around, and also has a variety of experiences in one place.
45. Given Singapore's land constraints, a critical pillar of staying attractive to these customer segments is to have a strong and exciting calendar of leisure events. To sustain this momentum and ensure we have a strong pipeline of quality events, STB has enhanced our Leisure Events Fund to better support the growth of events across various life-stages, from helping young events grow to supporting the scaling up of existing events.
46. If you are interested to find out more about the enhancements we have made to our schemes under the new tranche of the Tourism Development Fund, we have developed an infographic that can be downloaded from our corporate website after TIC.
47. Moving from who we want to focus on, the third piece in our marketing strategy is how we deliver our stories to our fans.
48. Big data is changing the way marketing is done. As we spend more of our lives online and conduct more searches, and make more connections and transactions, more consumer data is being captured. With insights gleaned from data, we can personalise marketing content to suit the needs and preferences of our target audience, making our messages more relevant and compelling. This will in turn generate better leads and enable more conversions.
49. In terms of building local engagement, word-of-mouth advocacy from friends and family remain one of the most powerful distribution channels in marketing. People trust the recommendations of people they know. In the world of online and social media, we therefore need to catalyse more user-generated content (UGC) to drive visitors' interest and get them to come to Singapore.
50. STB is committed to raising the marketing capability amongst tourism players and we also want to promote innovative marketing practices. So besides continuing with our Tourism Marketing Labs for industry, where we introduce industry to innovative marketing concepts and ideas, we are also putting together a marketing innovation fund to encourage industry players to push the boundaries of marketing and experiment with new ideas. We are still working out the exact details of the fund and will share them with you at a later date.
51. So being sharper about our marketing strategy is about shaping the story we tell, identifying who we want to tell it to, and how we tell it. There will be a dedicated breakout session later on our marketing strategy and the various supporting initiatives. Those of you who are interested in this area should join my colleagues there for more details.
52. For now, I want to transition to the second topic for this presentation, which is about the potential of technology to transform the business of tourism.
53. We are all familiar with how the internet, mobile computing and superior processing power have changed our lives. It has transformed the way we work, the way we do banking, the way we shop, the way we consume media and even the way we socialise. It has enabled innovative players to disrupt the tourism sector – witness the rise of online travel agents and sharing platforms.
54. In this brave new world, the operating rule seems to be: disrupt, or be disrupted. So which would you rather be?
55. As the tourism sector champion, STB has taken this to heart. We must embrace this and help our industry stakeholders to embrace this too.
56. To do this properly, last year, I re-organised STB to create a Technology Transformation Group and appointed a Chief Technology Officer to head it. I gave them a threefold brief: change the way we work with data, change the visitor experience and our interface with them through technology, and catalyse the adoption of technology by our industry partners.
57. Let me now disrupt myself temporarily by inviting my CTO, Quek Choon Yang, to share with you some of our plans for transforming tourism through technology.
TRANSFORMING VISITOR EXPERIENCE AND TOURISM ENTERPRISES THROUGH TECHNOLOGY AND INNOVATION
58. I am delighted to be here as STB's Chief Technology Officer. I started programming when I was 7, sold my first piece of software when I was 15 and have worked in Singapore's eGovernment transformation, MNCs and started my own tech companies. Over the last few months, I had the privilege to speak and engage with many of you, to better understand the needs and challenges of the tourism industry and more importantly, to explore jointly how technology can help us transform our tourism landscape and its experiences, for a more market-competitive Singapore. Let me share some of our ideas, and to I invite you to join us on this transformational journey.
Delighting our Customers through a Seamless Visitor Experience
59. Let me first talk about how visitors experience Singapore. We want to better curate a visitor's experience before, during and after their trip to Singapore. Singapore can be one connected experience for visitors, seamlessly from start to finish.
60. Instead of seeing Singapore as a disconnected set of attractions, tours, etc., can Singapore present ourselves to visitors as a single unified "mega attraction"? Visitors will get information and services they need, when they need it, from across attractions, events, hotels, etc., with minimal effort. We believe that if there is any country or even city that can do this, it is Singapore – the connectivity, the security, the can-do spirit of Singaporeans… and this vision can only happen with your support. This focus of putting the visitor at the centre of all we do will set us apart from all other destinations in the world.
61. When this happens at every part of the visitor journey, we believe that this would empower visitors to discover more of what Singapore has to offer. When visitors spend less time and effort figuring out how to get around or purchase tickets, it will increase their propensity to spend. More importantly, with an understanding of their needs, we could continue to engage and delight with customised offers to drive repeated visits back to Singapore.
62. So how would this visitor experience look like?
i. When the visitor arrives in Singapore, he would be automatically checked into his hotel. From the airport, he could head straight to his conference or do some shopping, because his luggage will be delivered to his hotel.
ii. He could also receive notifications of an event happening in town that, according to his profile, he would be interested in. He can then purchase the tickets right on his mobile.
iii. But that's not all. On the way to the event, because he's early, he could be alerted to a customised walking route that takes him to his preferred stop-overs. He could grab a meal at a recommended restaurant or visit an art gallery before attending the event.
63. All in all, we will deliver a truly personalised and seamless experience, uniquely curated for every visitor. To start, we are looking at developing a one-stop mobile application to showcase these experiences. We would love to work with you to also empower your apps.
Strengthening our Competitive Edge through Enhancing Synergies
64. Size need not be a disadvantage. How can we work together to strengthen our competitive edge, and also share knowledge and information to support tourism businesses? How can we turn small into an advantage? Here are 2 areas we can work on: the first is in information and services and the second is in data.
65. Let's talk about information and services first. To make this "mega attraction" vision a reality, we should consider how to connect information and services and supporting businesses in this journey. If every organisation involved in tourism would like to connect with everyone else, it might be resource-intensive, taking a long time and potentially could be very expensive. Therefore, in support of our tourism businesses, the development of a central hub for information and services would be imperative. We would like to develop and offer an open platform where businesses not only can contribute information about their offerings, their latest events or promotions but also freely access and extract content and services for their usage. In this way, businesses can package better experiences in their own websites and apps to serve visitors.
66. How would this work? For example, an attraction such as WRS would like to share its latest and newest features such as a new show or a newly-launched restaurant, this could be hosted and made accessible on this central hub. Another player, say Sentosa, could do the same. With shared information on this hub, travel agents or aggregators could then draw upon, say WRS or Sentosa's latest information and extract for usage or package to promote or resell. In this repository of information and services, our businesses will be able to cross-share and freely access one another's content and services, we would have removed a lot of friction in how we exchange content and build towards enhanced visitor experiences.
67. Now let's talk about data. As individual enterprises, we each hold pieces of information that together would provide a more complete understanding of our visitors. STB has started working on how we can provide more timely and granular data as well as analytics to all of you. In the longer term, we are also exploring how we can aggregate the data that you have as individual enterprises, allowing each of us to get the data analytics and insights that you want, when you want it, without revealing competitive information. For example, we conducted a little experiment and it seems that Chinese visitors preferred strongly to visit temples before they visit our IRs. I'm not sure why, but I'm pretty sure this is useful to those planning tours.
68. I know many of you would be concerned about data privacy. STB is committed to protecting your privacy and the privacy of visitors, and is working on a charter that would lay out how we use your data to demonstrate our commitment to data privacy. We are already compliant with Personal Data Protection Act or PDPA and have put in place security safeguards to protect your confidential data from unauthorised access or disclosure. All data shared with STB would be used only for intended purposes agreed upon with our valued partners.
69. In order for this to be successful, we need your help and certainly your continued feedback and input. We need you to contribute your data, content and services. Only with scale can this take off successfully.
70. Our partnerships with industry in these areas have already begun. Riding on the in-market partnerships we established with four major Chinese digital players last year, we are expanding our footprint to other markets such as South Korea. We are partnering with Kakao, a well-established digital player in the market, to deliver compelling and relevant visitor experience on Singapore's offerings.
Singapore as Global Innovation Leader in the Use of Technology in Tourism
71. As these efforts will be enjoyed by both tourists and locals, our initiatives are therefore supported by a whole-of-government approach, as part of the Smart Nation initiative.
72. We intend, through these projects, to create richer and more immersive experiences for visitors and locals. The projects will also increase business opportunities for you and strengthen our communities by connecting people, places and businesses.
73. We hope that in painting our vision for what technology can do for the tourism sector, you have been inspired to join us in making this vision a reality.
74. If we as an industry are committed to this vision, and are willing to work even closer together, we will transform Singapore to be the global innovation leader in tourism.
75. We understand that many of you must have a lot of questions on the initiatives I have outlined. If you would like to hear more about these ideas, share your views and concerns or be involved in any of these projects, please join my colleagues later in the Visitor Experience breakout session.
76. Let me now invite Lionel back to tell you more about empowering industry competitiveness.
EMPOWERING INDUSTRY COMPETITIVENESS
77. In this third and final section, I want to address the partnership between government and industry to drive industry transformation. We know that there have been manpower and productivity challenges in recent years. The Budget and COS speeches earlier this year have emphasised the increasing experimentation and use of robotics in our tourism sector as a means to increase productivity. I shall not belabour that point, but suffice to say that a number of industry stakeholders are starting this journey to embrace robotics.
Addressing Industry's Manpower Challenges through People Solutions
78. Yes, we need to explore technology solutions for our companies. But we also need people solutions. So in this final section of my presentation, let me update you on some of the workstreams focused on people solutions.
79. Firstly, we must do better at attracting Singaporeans to join the tourism sector. To make a breakthrough here, there needs to be changes on the employer and employee sides. Employers need to offer rewarding jobs, meaningful careers and progressive HR practices. For potential employees and their families, we need to aggressively promote the promising career opportunities in tourism.
80. For example, STB has been working with SHA and hotel industry leaders to develop a careers strategy that targets Singaporeans. This will not be a once-off careers fair type of initiative but a sustained campaign to change perception over a period of time. This has the support of MOM and WDA and we will provide more details later this year.
81. A few weeks ago, I also met with leaders from a cross-section of travel agencies to discuss challenges facing the TA industry: big and smaller players, inbound and outbound, agencies focused on corporate accounts etc. There was broad consensus on three points:
i. The traditional business models of TAs are being challenged. While there is still growth for TA industry, it will go to players who can innovate and adapt. We discussed successful case studies in developed markets in Europe and North America:
An example is the Departure Lounge in US which has changed the way consumers purchase travel. Combining a coffee house, wine bar, event space and travel agency in one space complemented with travel visuals and destination-focused foods, it draws in consumers then appeals to their desire to travel. To-date, a large portion of their travel business is driven by walk-ins who came to enjoy their F&B offerings.
ii. These new business models will require workers who are more skilled, better trained to respond nimbly and knowledgeably to customer needs.
iii. Government has a role to catalyse and support this change, including with people solutions. And our support should be targeted at players who are prepared to be the first-movers in this industry.
So STB will also work out a suite of measures to help the TA industry address their people challenges in a way which is aligned to a more sustainable approach to the business.
82. Secondly, our work under SkillsFuture to train and upskill the tourism workforce is progressing well:
i. Tourism professionals will soon be able to apply for the SkillsFuture Study Awards, which provides a monetary award of S$5,000 to defray out-of-pocket expenses associated with work-related education and training. I am happy to share that these Study Awards will be available later this year not just to the Hotel sector, but to the MICE, Travel Agents and Tourist Guides industries as well.
ii. As Minister has mentioned, through the SkillsFuture Earn and Learn programme, fresh ITE and polytechnic graduates will be placed into structured on-the-job and institution-based training. The first run of the Earn-and-Learn programme will start next month. Republic Poly is running it and as of now some 41 student-employees and 22 hotel employers are involved, but this is not the final count for first run.
a. Here is a student Chua Ming Hui, a 3rd year student in Republic Polytechnic's Diploma in Hotel and Hospitality Management programme. She has accepted a job with a hotel and will join the SkillsFuture Earn and Learn programme when she graduates in a few weeks' time. Because of the programme, she will be given a day off from work each week to attend lessons for her Specialist Diploma in Hospitality Business Management. So she gets to start work, learn on the job and earn a regular wage, while continuing to further her formal education. If she does well on the job, she can also expect a structured career development path after earning her Specialist Diploma.
Hotels have responded enthusiastically to this programme. We will aim to ramp up the enrolment numbers in subsequent batches.
iii. The SkillsFuture Leadership Development Initiative was also mentioned by Minister. Through this, we will support hotel employers in grooming the next generation of Singaporean hotel industry leaders.
iv. We are working with NATAS to launch a wider, more relevant suite of 29 training modules and an enhanced professional accreditation programme for Travel Agents. This is aligned to the Tour and Travel Services Workforce Skills Qualifications (WSQ) framework. This means more training choices for Travel Agents and certification which is recognised industry-wide.
v. For Tourist Guides, STB has worked with WDA to enable Singaporean and PR Tourist Guides to receive up to 80% funding for any Professional Development Courses (PDCs) that they attend. This is significant as all PDCs can now be funded while there is also an increase in terms of funding support. Majority of current funding schemes provide funding support at 50% or less. This starts from the second half of 2016.
83. For Tourist Guides, we are also launching a new initiative to recognize the contributions by long-serving guides as well as celebrate excellence in the community. STB is holding the inaugural Tourist Guide Recognition Awards next week, on 5 and 6 May.
84. For the tourism sector as a whole, besides celebrating excellence in delivering quality experiences, we also want to applaud other achievements, such as successful enterprise innovation. The Singapore Experience Awards will be re-branded the Singapore Tourism Awards from this year, with new award categories such as "Enterprise Excellence". Join me in Oct this year when we celebrate the best from the tourism sector.
85. Let me conclude. I have discussed some of STB's sharpened strategies as we strive towards Quality Tourism:
i. Our approach toward marketing, markets and customer segments;
ii. Our intention to transform visitor experiences and tourism enterprises through technology and innovation; and
iii. Our support for the people solutions for the tourism sector.
86. Last year, STB refreshed our mission statement to be about shaping a dynamic tourism landscape for Singapore in partnership with industry and community. We have many ideas and plans to grow tourism, not just for you but also with you.
87. I look forward to forging stronger partnerships with you, and wish you a fruitful Tourism Industry Conference. Thank you.