The result was that Singapore's tourism industry failed to meet its targets for last year - the first time since annual goals were set in 2003.

Worse, the new tourism chief is warning of another difficult year ahead.

Some 10.1 million foreigners visited the Republic in the last 12 months, spending $14.8 billion.

The targets were 10.8 million visitors and $15.5 billion.

The 10.1 million figure also falls short of 2007's record of 10.3 million tourists.

The tourism receipts of $14.8 billion, however, were 5 per cent higher than the previous year's, boosted partly by the fact that hotel room rates continued to go up.

Yesterday, Singapore Tourism Board (STB) chief Aw Kah Peng said the performance of the sector last year was 'credible and robust', given the dramatic turn in the world economy in the second half of the year.

She added that with Singapore's small population and little room for domestic tourism, the sector held up 'rather well'.

In her first official appearance as the new STB chief at the annual Asean Tourism Forum, held in Hanoi this year, she said the energy and passion of the industry's members would allow the sector to ride out the downturn.

Ms Aw took over from Mr Lim Neo Chian on Jan 1.

Although the STB cited the world financial crisis as the reason for the fall in numbers, industry watchers pointed out that the drop came as early as June last year - months before the crisis hit.

The consensus in the industry is that Singapore has become too expensive for most travellers.

Ms Aw said, however, that relative to those in other Asean countries, hotel rates in Singapore were high, but not so when compared to Japan's or London's, for example.

Average room rates in Singapore as at November last year stood at $231, compared to Hong Kong's HK$1,228 (S$235).

Senior Minister of State (Trade & Industry) S. Iswaran told The Straits Times last Friday that although Singapore had a 'slightly higher cost structure', there was also variety. A traveller can splurge by staying in five-star hotels or save by going for budget accommodation, he said.

The outlook for this year, though, looks grim.

The World Tourism Organisation, in a recent conference in China, said prospects in the short term for the Asia-Pacific looked quite gloomy, given the global downturn. It said tourism receipts would be adversely affected, as travellers cut back on length of stay and stay prudent in their choice of hotels and activities.

Malaysia is already bracing itself for a weaker year and projecting foreign arrivals to fall by 9 per cent.

Ms Aw said targets for the year would be announced soon, but she said the STB was looking to target tourists from the region to bolster tourism.

More details of a new global marketing campaign to sell the country as a value-for-money destination, together with plans to help businesses, will be revealed next month.

weichean@sph.com.sg