Go Local: The vaccine for the leisure and hospitality industry

With tourism numbers down, it's time for attractions and hospitality businesses here to pivot to the local market

"The magic down there is so strong," go the lyrics of a Four Tops hit, but Covid-19 has put paid to the tourism allure of Singapore and the magic is no more until a cure is found for the coronavirus.

With the global economy hitting the brakes, unemployment has soared and consumer spending nosedived in tandem.

Tighter wallets drastically pruned the revenues of retailers.

Leisure attractions and hotels bear an even greater brunt with the loss of tourists and business travellers, although hotels are earning a bit of respite adapting half of their room inventory for use as quarantine facilities.

In the 1988 hit Loco In Acapulco, American vocal group Four Tops crooned on, "your back's against the wall" - which is literally what the leisure and hospitality industry is facing right now, with international travel at a standstill, instantly reflected in tourism receipts plummeting almost 40 per cent in the first quarter of this year to $4 billion, and this was still prior to the implementation of the circuit breaker in April, when the full impact of the coronavirus had yet to be felt.

The $27.7 billion tourism takings of the preceding year now seemed like a millennium ago and an unattainable pipe dream for 2020.

It is against this backdrop that the Singapore Tourism Board is spearheading a $45 million rediscover Singapore marketing campaign to reinvigorate local spending in this sector, with promotions in dining and hotel staycations for residents.

Deputy Prime Minister Heng Swee Keat has doubled down (more accurately - septupled) by extending $320 million worth of tourism credits to Singaporeans in the form of SingapoRediscovers vouchers to boost domestic spending.


It is a band-aid at best, but the ailing industry is welcoming with open flailing arms any help tossed its way as many businesses fight for dear life.

How much these can buffer the industry squarely depends on the manner the funds are dished out, where the nett spend catalysed will be the proof in the pudding.

A best-case scenario might see local consumers ponying up twice of what is on the table, resulting in around a $1 billion spending injection into the sector. But that is still a far cry from the pre-Covid-19 tourism space where each of the shopping, accommodation and attraction/entertainment segments rang in $5 billion annually in the past few years.

It is thus important for businesses to understand that the SingapoRediscovers handout is but a dose of antibiotics to bring down the fever temporarily and not a cure for the industry.

The Four Tops song bemoaning the risks of "going loco" (going nuts) is a reminder that it is imperative for the industry to help itself and go local for its survival.


Like hotels, the businesses that are hardest hit by the pandemic are those which rely primarily on travellers and tourism dollars.

The coronavirus brought the newly minted Jewel Changi Airport, where seven out of 10 customers hail from overseas, to its knees barely a year after opening.

The twin tourism jewels of Singapore are also not spared.

The Marina Bay Sands and Resorts World Sentosa (RWS) integrated resorts (IRs) encountered a rare blue moon when the houses turned red inside the first- and fourth-most profitable casinos in the world.

RWS shocked the local job market last month when it laid off a quarter of its 8,000 employees, unimaginable for a cash cow reaping hundreds of millions of dollars in profit every year since the day the sprawling IR opened its doors to welcome customers a decade ago.

The end of the almost two-month circuit breaker period and the gradual reopening of the economy did little to help the cash tills of these tourist-centric businesses, compared with other local-focused establishments. In retail, the crowds are returning to the heartland malls but not so much to the downtown tourist districts.

Busloads of tourists no longer ply the short bridge to Sentosa and the attractions on the island are largely deserted, with the only throngs of humans seen on the rolling fairways of Sentosa Golf Club, comprising golf-starved members.

The Chinatown streets between Sago Lane and Temple Street are eerily quiet - indicative of the demise befalling businesses with all their eggs in the tourism basket.

Going local is proving to be the more resilient theme in these troubled times and it would be percipient for businesses banking too heavily on foreign wallets to take pause and retool their strategy towards a more robustly balanced customer demographic mix.

A case in point is the casino resort across the Causeway, up in Genting Highlands.

Since the lifting of the movement control order in June, Resorts World Genting has been facing the happy problem of maintaining social distancing rules amid the pent-up demand from Malaysians pouring through its gates.

The resort counts Malaysians as as important a customer segment as foreign tourists. Detractors may argue Malaysia has a much larger population base of 29.7 million citizens compared with Singapore, but it is important to distinguish that the overwhelming clientele at the hilltop resort are Malaysian Chinese, who total about 6.7 million, compared with Singapore's population of 5.85 million.

So why didn't the two Singapore IRs weather Covid-19 as well as the Malaysian resort?

The reason is simply that the Malaysian resort is curated to serve a more balanced customer demographic between locals and foreigners. The Singapore IRs are focused much more keenly on foreign visitors and much less so on locals who fancy a wager.

The latter is evident in the parking charges at both IRs, which are set exorbitantly high to deter locals from casual impulse visits and save the parking spaces for higher-yielding gamblers and the well-heeled.

As far as non-gambling IR attractions go, repeat visits to world-class attractions like Universal Studios Singapore generally happen when new rides are introduced but these occur only every few years, while Cats and other award-winning musicals are not your typical average middle-class Singaporean fare.


The time is nigh for businesses to take stock of their anaemic view of the local market as a mere afterthought and realise how important this base is to tide them over rocky times like this pandemic.

Many of the local attractions sell kitsch which they now grasp locals do not buy. They could take a leaf from the National Heritage Board and Wildlife Reserves Singapore, as our museums and national zoo attract as many locals as tourists. Locals still count for a significant 40 per cent going through the turnstiles of the Singapore Zoo and constitute over 60 per cent of visitors at our museums.

The secret to their success? The local demographic has been a core segment in the conceptualisation of their business plans.

Hotels are now pandering to local staycations.

My advice to them is to institute this as their permanent, recurring strategy rather than as a short-term, stop-gap tactic.

Retailers likewise need to return to the drawing board with their thinking caps to innovate, reinvent and be more creative.

They can explore how they might capture some of the $34 billion that repressed Singaporeans splurge annually on overseas travel, short of bringing London, Paris and New York to Singapore.

While experiences are hard to recreate, I remember people lugging bagfuls of Tokyo Banana and Krispy Kreme in plane cabins to bring home, before these coveted items became readily available locally. But there are a lot of other goods and services which have yet to reach our sunny shores, for which we still have to hop onto a plane to get, creating a gap that savvy retailers can fill.

Satisfying a little of that appetite might warrant some food for thought as Amazon and Shopee only go so far to bridge the void.

Even size was not an issue for some innovative heads who had brought in and recreated the popular Thai outdoor Artbox market and Chatuchak night market in Singapore to great success.

With more of such ingenuity and out-of-the-box brainstorming, tapping local spending to make

up for lost tourism receipts

need not involve an expensive makeover.

The local leisure and hospitality businesses have to accept the SingapoRediscovers programme and all the government stimulus packages as the leg-up they are designed to be, and it is ultimately up to them to reinvent and retool their business models.

With no free-spending tourists Going Loco with their UnionPay and credit cards and a coronavirus without a sell-by date, Going Local is the only vaccine that can save the day.

• Daniel Cheng is the consulting principal of Prism & Company and a regional leisure and hospitality industry professional who formerly held senior executive positions with Hard Rock International and the Genting Group.