Singapore Travel – Looking forward to a better 2023
As the first ASEAN country to reopen its borders, Singapore led the tourism recovery among its ASEAN peers. In 2022, Singapore welcomed 6.3 million visitors, recovering to 33% of pre-Covid levels. This was also stronger than Singapore Tourism Board’s (STB) initial estimates of 4-6 million. On the back of this strong recovery in visitor arrivals, Singapore hotels’ revenue per available room (RevPAR) almost doubled year-on-year (YoY) to SGD181 in 2022, reaching 94% of its pre-Covid level.
According to STB’s latest estimates, visitor arrivals to Singapore are expected to reach 12 million to 14 million in 2023 (63-73% of 2019), supported by a healthy pipeline of meetings, incentives, conferences and exhibitions (MICE), increased flight capacity, and the return of Chinese tourists. Singapore now expects full tourism recovery by 2024. China's reopening remains a key catalyst to Singapore’s tourism recovery in 2023. This is widely expected to benefit several sectors including aviation, lodging, gaming, retail, property and hotels. However, a material rebound in Chinese tourists may only happen in 2Q23 or 2H23, given the current airlines’ capacity constraints, and the lead time required for visa application and the renewal of passport.
Currently, we have not seen signs of deteriorating travel demand based on forward bookings for hotel rooms and air tickets, but with a still weak macro outlook, elevated inflation and dissipation of pent-up demand, this could temper consumer spending and curb some corporate budgets in 2023. We remain hopeful that the substantial pent-up travel demand from China should help to replace the weak demand from other markets.
SIA is likely to be a key beneficiary of this travel recovering. Barring any risks of a deep recession, the pent up demand for travel is likely to boost airline passengers growth and this will likely boost its revenues and its stock price.
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