The view from the rooftop of the Marina Bay Sands hotel, overlooking Singapore’s financial district.
Anthony Wallace Afp | Getty Images
Singapore, long considered the center of the world economy, expects spending on tourism to soften this year despite forecasting another increase in tourist arrivals, reflecting concerns that conflicts in the Middle East could weigh on consumer and business spending.
The Singapore Tourism Board projected that it will receive tourism receipts of US$31 billion and US$32.5 billion (US$24 billion to US$25.6 billion) in 2026, compared to a record US$32.8 billion last year. International arrivals are expected to rise to between 17 and 18 million this year, from 16.9 million in 2025.
The city is the region’s hub for business travel and air traffic and has hosted major events, including the Formula One Singapore Grand Prix and concerts by Taylor Swift, Coldplay and Blackpink. Tourism accounts for 6% of Singapore’s services exports by 2024, according to the Singapore Tourism Board.
Although tourist arrivals rose 3% in the first quarter from a year ago, tourism spending is expected to slow due to “muted demand in the coming months,” said Melissa Ow, chief executive of the Singapore Tourism Board, at the country’s annual industry conference.
The warning from Singapore’s tourism authorities echoes wider concerns across the business travel industry. The Global Business Travel Association said political tensions and high fuel costs are creating instability in all international travel markets, with Asia remaining relatively strong.
Asia Pacific accounts for more than 40% of global business travel spending, according to the Global Business Travel Association.
Suzanne Neufang, CEO of the Global Business Travel Association, told CNBC’s Monica Pitrelli that global business travel has yet to return to pre-pandemic levels, as travel costs remain high.
While “destabilization” of the country or economy is inevitable, Singapore’s tourism strategy is “still one and a half decades away,” Ow said.
Singapore’s “Tourism 2040” strategy aims to increase tourism receipts to between 47 and 50 billion Singapore dollars by 2040.
By 2025, a record 70 million passengers will pass through Singapore’s Changi Airport.
Plans for an uncertain future
“Uncertainty is not the travel industry’s friend,” Neufang told CNBC. However, meetings and conferences remain among the strongest segments of the tourism industry, he added.
South Korean boy band BTS’ planned four-night Singapore stop in December is expected to support tourism demand. Ow said Singapore’s calendar remains “strong” despite flight disruptions linked to tensions in the Middle East.
Singapore also announced a three-year partnership with South Korean theater production company Mr Romance. The first collaboration, “Buy King,” is being filmed in Singapore and stars South Korean actors Ju Ji-hoon and Lee Jun-ho.
Singapore’s Trade Minister Grace Fu said at the event that the government will inject a new 740 million Singapore dollars into the Tourism Development Fund over the next five years, on top of the more than 300 million Singapore dollars announced by 2024.
Another 5 million Singapore dollars will be set aside under a separate fund to help tourism businesses expand into new markets and reduce the financial risks of expansion, Fu said.
Singapore is also looking to attract more cruise tourists as disruptions in Middle East airspace and fluctuating jet fuel prices continue to weigh on air travel.
Disney Adventure, the largest ship of the Disney fleet and the company’s first ship based outside the US, began operating from Singapore on March 3.
Singapore is also preparing to open a new cruise and cruise terminal on July 15. The facility will have a VIP lounge and an automated baggage handling system as the country looks to expand its tourism sector that recorded 375 ship calls and more than 2 million passengers by 2025.
Still, Ow said Singapore remains focused on its long-term tourism ambitions.
“Current times are very uncertain and volatile,” he said. “We choose to be very careful about how we expect the year to turn out.”
– CNBC’s Monica Pitrelli contributed to this report.
