Impact of Covid-19 - TOURISM

Tourism sector struggles to keep afloat amid travel slowdown

As with many local businesses in the tourism sector, GTMC Travel had hoped that last week's school holidays would provide a much-needed boost.

The travel agency, which handles both inbound and outbound travel bookings, had already seen business tumble by 80 per cent earlier this month amid the global spread of the coronavirus.

But with more countries now imposing travel restrictions and a spike in imported cases here prompting new rules that essentially put a halt to travel, bookings for the March holidays also fell through.

Its chief executive, Mr Samson Tan, tells The Sunday Times: "Business now is totally zero. Everything is postponed or cancelled - travel agents can't do anything. Things are at rock bottom."

With no end in sight to what has become the worst crisis to hit Singapore's tourism sector yet, industry players say that business closures and layoffs are on the horizon if immediate help is not rendered.

The Singapore Tourism Board (STB) last month projected a 25 per cent to 30 per cent fall in visitor arrivals this year, steeper than the 19 per cent decline in 2003 during the severe acute respiratory syndrome (Sars) outbreak.

While confidence is high that the sector - which contributes about 4 per cent to Singapore's gross domestic product - will rebound once the virus is contained, the challenge is keeping businesses alive long enough to see the recovery, say observers.

Some travel agencies have closed temporarily in the hope that they can wait out the situation, says Mr Tan, who is also the inbound committee chairman for the National Association of Travel Agents Singapore (Natas).

At GTMC Travel, some staff have voluntarily gone on unpaid leave, while others will be sent for government-sponsored training during the lull, he says.

Natas announced last week that it would be cancelling its travel fair in May in the light of recent developments and uncertain travel sentiment.

Singaporeans have been advised to defer travel, while all arrivals to the Republic have been issued 14-day stay-home notices since last Friday night.

Global travel has slowed to a crawl as countries grappling to contain the deadly virus tighten restrictions and consumer sentiment weakens.

Hotel occupancy rates have plummeted, while businesses in tourism-related industries, including retail and food and beverage, have also been hit by slower local demand.

Mr David Lim, who manages trampoline park Bounce Singapore, virtual reality arcade Zero Latency and treetop obstacle course Forest Adventure, says business is down by about 60 per cent year on year, as knock-on effects of the coronavirus outbreak - i
Mr David Lim, who manages trampoline park Bounce Singapore, virtual reality arcade Zero Latency and treetop obstacle course Forest Adventure, says business is down by about 60 per cent year on year, as knock-on effects of the coronavirus outbreak - including booking cancellations - take their toll.  ST PHOTO: NG SOR LUAN

The World Travel and Tourism Council has estimated that up to 50 million jobs in the sector are at immediate risk.

Mr Aloysius Arlando, president of the Singapore Association of Convention and Exhibition Organisers and Suppliers, says that the business-event industry is at a standstill.

 
 

A number of major events have been postponed to the last quarter of the year, and the industry is hopeful that some form of normalcy will return by then, he says.

"If the situation drags on further, and the Q4 events can't take place, the events industry will haemorrhage," says Mr Arlando.

The cruise industry has also been badly hurt, after several ships were found, or suspected, to have cases on board, and countries closed their ports to cruise liners.

STAYCATION DEALS

Two months after the coronavirus outbreak hit Singapore, many tourism businesses have turned their focus to the domestic market, rolling out promotions and staycation deals over the school holidays.

Some hotels and attractions say they have enjoyed a bump over the last week, though business is still slower than usual.

Mr David Lim, who manages three leisure attractions - trampoline park Bounce Singapore, virtual reality arcade Zero Latency and treetop obstacle course Forest Adventure - says business is down by about 60 per cent year on year.

The businesses rely on a mix of tourists, locals and expats, and have been hit by several knock-on effects of the virus outbreak.

Forest Adventure at Bedok Reservoir, hurt by school cancellations, was down by about $40,000 last month alone, says Mr Lim.

Business at Zero Latency has fallen in tandem with footfall at Suntec City as more companies encourage staff to work from home, while birthday parties at Bounce have dropped from up to 40 a weekend to about 10.

"This week has definitely been better, but there is still a huge dip in consumer confidence, whether it is fear of the virus or an economic downturn," he says, referring to the week of March 14-21.

Dr Kevin Cheong, executive committee member of the Association of Singapore Attractions, says companies are bracing themselves for tomorrow, when the school holidays end and the full impact of the latest travel measures are felt.

"The level of uncertainty now is high," he says.

Help extended to businesses as part of the $4 billion Stabilisation and Support Package is appreciated, but insufficient to prevent a wave of job losses and closures in the coming months, companies say.

 
 
 

While wage support and access to loans with low interest rates have been helpful, funds are not being disbursed quickly enough, they add.

Some also worry that taking on loans while earning little to no income would put them in a deeper hole.

Rental and manpower relief topped their wish list for the second stimulus package that the Government is working on.

"A lot of us are looking at short-term liquidity issues. If the rental issue were solved, I think most of us would be able to stay afloat until we turn the corner," says Mr Lim.

Singapore Retailers Association executive director Rose Tong notes that some commercial landlords who qualify for a 15 per cent property tax rebate have not passed the savings on to tenants, despite the Government's urging.

Others have attached conditions that would claw back the rental rebates should tenants terminate their leases early, she adds.

Some stores have shortened their opening hours to cut costs, while multinational companies, including Apple, have temporarily shut a majority of their outlets worldwide.

The STB, meanwhile, is working on an "ambitious" recovery campaign that will target the domestic market first, before battling global markets for tourists once the virus is contained. STB chief executive Keith Tan says that given the sharp rise in cases overseas, "visitor arrivals will remain depressed for a protracted period of time even if the situation in Singapore improves".

The priority now is shoring up local confidence in the hygiene and sanitation standards of Singapore's tourism establishments and preparing for the rebound, he says.

Some measures already rolled out, such as the SG Clean campaign, which certifies establishments that meet high hygiene standards, are out of the Sars recovery playbook.

CHINA, INDIA CAMPAIGN

Mr Chang Chee Pey, assistant chief executive of STB's international group, notes, however, that Covid-19 has affected many more countries and is predicted to last longer.

The STB is working on a campaign to recapture China, Singapore's largest source of visitors, while India will also be a key market during the recovery phase, he adds.

In the meantime, firms are hoping that locals will help prop up the tourism sector, as they have before.

Natas' Mr Tan says that the association is working with others to bundle products and stimulate local demand.

"We're trying to get locals to step out, join these day tours and at least give tour guides something to do," he says.

 
A version of this article appeared in the print edition of The Sunday Times on March 22, 2020, with the headline 'Sector struggles to keep afloat amid travel slowdown'. Subscribe