Coronavirus: Singapore

Cost, travel issues may dampen boost from VTLs with Indonesia and India

High cost of PCR tests may discourage budget travellers in both markets, amid other curbs

Vaccinated travel lanes (VTLs) with Indonesia and India, two of Changi Airport's top three markets, can give a big lift to businesses and people here, but headwinds will come from continued travel curbs and cost concerns.

Observers The Straits Times spoke to yesterday said Indonesia and India are key trading partners for Singapore and contribute greatly to tourism receipts here.

But even as the two VTLs are slated to begin from Nov 29, the need for polymerase chain reaction (PCR) tests - before flying out and on arrival - could put off cost-conscious travellers, who comprise the bulk of passengers on these routes.

A PCR test costs over $120 here.

The arrangement with Indonesia is also one way - letting visitors from that country into Singapore without quarantine while locking travellers from the Republic out.

For those eyeing a trip to India, there are currently no commercial flights between Changi Airport and the country, although both nations are in talks to resume services.

"We are still a long way from pre-pandemic times," CIMB private banking economist Song Seng Wun said.

"But we must remember that one extra bus of tourists here can have multiplier effects and maybe save businesses.

"Because of people-to-people ties between Indonesia and India and Singapore, these VTLs are also very important, although the opening of the Causeway link with Malaysia will have a much larger impact."

The Government on Monday said the land border between Singapore and Malaysia could reopen in a few weeks under a "vaccinated travel lane-like arrangement", after earlier announcements that a VTL between Changi Airport and Kuala Lumpur International Airport will open on Nov 29.

Associate Professor Walter Theseira of the Singapore University of Social Sciences said the VTL's impact on tourism will be muted until costs come down.

"The PCR fixed cost would be quite high relative to the air ticket price, unlike for travel to Europe or the United States. When combined with the limited VTL flights, the total cost of travel is likely to, at least initially, discourage more budget-sensitive travellers."

Still, the VTLs will help boost India and Indonesia's contributions to Singapore's economy.

UOB economist Barnabas Gan noted that even during Covid-19 last year, Indonesia made up 11.6 per cent of the Republic's tourism receipts, while India contributed 6 per cent.

Arrivals from these two countries will likely provide a "significant" boost to Singapore's hospitality-related industries, such as accommodation, transport, food and beverage, and retail, he said.

Indians and Indonesians also make up a significant chunk of the workforce here.

Dr T. Chandroo, chairman of the Singapore Indian Chamber of Commerce and Industry, said a constant concern in the last two years was that Indians could not come here to work, resulting in a severe staff shortage in certain sectors.

Indian nationals here were also unable to return home to see their families. "We are further delighted that short-term work passes and visit passes will also be issued," he said.

Mr Hooi Yu Koh, chief executive of construction firm Kori Holdings, agreed. He employs about 40 Indian workers who have not been home to see their families in the last two years.

Pre-pandemic, they would return to India at least once every two years for a month each time. "When they fly back now, it's like they've resigned because they cannot come back," he added.

Maid agencies said the VTLs could help them bring in more domestic helpers, who are in high demand here.

Individuals are, however, holding off on booking their tickets for now. Mr Pagi Asmara, 42, a senior programme consultant at language school IndoSlang, said the process is too costly and complicated.

Even fully vaccinated Indonesians have to be quarantined for three days upon arrival in Indonesia after showing a negative PCR test result.

"As much as I want to visit my family in Bali, the cost is too much for me and others living in Singapore on a modest salary," he said.

A version of this article appeared in the print edition of The Straits Times on November 17, 2021, with the headline 'Cost, travel issues may dampen boost from VTLs with Indonesia and India'. Subscribe