SINGAPORE (BLOOMBERG) - Singapore's casinos are so 2015. After luring tourists for half a decade, they're now losing out to the mall.
Shopping has overtaken gambling as the biggest earner in Singapore's tourism industry for the first time since 2012, surging 44 per cent in the six months through June from a year ago, official data show. It's most likely thanks to first-time Chinese visitors, according to HSBC Holdings, as the nation's travellers continue to fuel growth in Singapore's tourism industry.
Some 2.1 million Chinese visited Singapore last year, more than double that of 2009 - the year before the city-state opened the first of its two casinos. Among all visitors, those from China, Indonesia and India were the top three spenders in the second quarter of 2016, clocking up 40 per cent of all tourist receipts. Shopping comprised a quarter of total spending, from 18 per cent a year earlier.
Devoting a large chunk of one's visit for shopping expenses is "what first time visitors do", said Mr Erwan Rambourg, global co-head of consumer and retail research at HSBC in London.
Casinos have been a major drawcard for Chinese tourists to Singapore and it remains to be seen whether shopping will continue to outpace gambling. They are still the biggest spenders, forking out US$1,205 (S$1,725) each in Singapore last year, just ahead of Thai visitors. Chinese travellers spent a whopping S$1.15 billion shopping in Singapore last year, which compares with S$112 million for Japanese and S$175 million for Indians. They also spent the least on food and accommodation, a trend that's little changed so far this year.
Tourism is helping Singapore at a time of uncertainty for the trade-dependent country, whose economy grew at the slowest pace since 2009 last year. However, the growth in overall receipts is coming at the expense of average spending per tourist, which declined slightly in the first half from a year earlier.
That's partly down to the growing crowds of Chinese traveling on the cheap. The number of them on budget tours who are entering Singapore by land from Malaysia is rising at an annual clip of around 55 per cent, said Ms Deborah Aitken, an analyst with Bloomberg Intelligence.
"This news is not all good. Some of these tourists are on overland tours and therefore taking in cheaper markets as well as Singapore's high-end malls, unlike the higher-spending visitors who arrive by air," Ms Aitken said.