S'pore-Australia travel pact: Travellers, businesses upbeat, but experts say initial impact likely limited

Australia is a travel market almost as big to Singapore as the 11 current vaccinated travel lane countries combined. PHOTO: REUTERS

SINGAPORE - Travellers have been making inquiries and some companies have already booked tickets following the announcement on Friday (Oct 22) of an upcoming Australia-Singapore travel arrangement.

Experts said the move is a positive one, noting that Australia is a travel market almost as big to Singapore as the 11 current vaccinated travel lane (VTL) countries combined.

Australian Prime Minister Scott Morrison signalled on Friday that the arrangement for fully vaccinated travellers could be in place by Nov 23 and will initially apply to international students and business travellers, while tourists could be allowed to enter from December.

The move has raised the hopes of businesses here, with Australia traditionally being one of Singapore's closest economic partners.

In 2019, the last year before Covid-19 struck, Australia was Singapore's fourth-largest inbound tourism market by expenditure and accounted for 2.3 per cent of Singapore's total trade - coming up to $23.9 billion.

Mr Brendan Sobie of consultancy Sobie Aviation said Australia-Singapore traffic made up about 9 per cent of total passenger traffic for Changi Airport in 2019, equivalent to some 6.4 million passengers.

Pre-pandemic, the 11 current VTL countries, including South Korea, Britain and the United States, accounted for 10 per cent of total passenger traffic for Changi Airport.

Australia is likely to be the 12th VTL country.

While the development is seen as a positive one, experts cautioned against over-optimism.

For instance, the 9 per cent of total passenger traffic for Changi Airport that Australia accounts for includes transit traffic and all Australian states and territories.

The travel arrangement would, at least initially, likely include only Sydney in New South Wales and Melbourne in Victoria.

Mr Sobie said: "Not all of Australia is opening up. Western Australia, in particular, is not likely to open up for at least several more months. Perth in Western Australia is an important destination for Changi, accounting for 1.3 million passengers in 2019 or 2 per cent o f Changi's total alone."

There is also the cap on passengers to consider, he added. Each of the 11 VTL countries has a separate cap that can sometimes seem "arbitrary".

"For example, the United States has a significantly higher VTL cap than Britain despite the US having less traffic with Singapore prior to the pandemic," he said.

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UOB economist Barnabas Gan noted that the 2.3 per cent of Singapore's total trade contributed by Australia comes up to about only 0.5 per cent of Singapore's gross domestic product.

Still, he said that the reopening of Australia may be seen as one of the first few signs of more economies reopening in an endemic Covid-19 environment.

Travellers have been keen.

Chan Brothers Travel said it received over 50 inquiries within hours of Mr Morrison's press conference, adding that it is raring to go, with product and marketing efforts long ready.

"Inquiries are streaming in," it said. "We are positive and welcome the prospect of outbound leisure travel resumption to Australia."

About 464,700 Singaporeans went to Australia between July 2018 and June 2019, taking in its wine regions, unique wildlife and cultural vibrancy.

According to the Australian government, the Singaporean community in Australia stood at 72,860 people as at 2016.

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Business travel specialist FCM Consulting Asia's senior director, Ms Joanne Taylor, said it now forecasts travel to recover to within 65 per cent of pre-Covid-19 levels within just six months, although her optimism is tempered by the fluidity of the situation.

"We are still very mindful that recovery is in its initial stages," she said. "We will be keeping a close watch."

Companies here have also already made bookings. Although prolonged closures have forced them to change their way of working to one less reliant on business travel and face-to-face interactions, they said "Zoom fatigue" means that employees and bosses alike are excited to fly.

Mr Guy Scott, chairman of TBH International, a project management consultancy, has already booked a ticket to fly to Sydney in November. During Covid-19, his company had to relocate staff to Singapore from its Australian operation and employ more Singaporeans over the last year.

One Singapore-based staff member missed an opportunity to be assigned to a project in Melbourne about six months ago as the client demanded on-the-ground presence, Mr Scott said.

"We are all excited at the prospect," he said. "Travel through the region was a weekly occurrence up until the pandemic. This announcement is pivotal to our company."

Agri-business consulting firm Beanstalk Agtech's Asia director, Mr Rob Hulme, also said his company has already made flight bookings. "Our consulting practice has been impacted heavily (when borders were shut)," he said. "The lack of travel across the Indo-Pacific region has restricted opportunities to develop in-market relationships, particularly important across Asia."

Australian Chamber of Commerce executive director Kate Baldock welcomed the news.

She said: "The success of Singapore's VTLs with other countries sets the way forward for travel to resume and there has been excitement across the Australian business community following this announcement.

"This will make an enormous difference to the way companies can operate."

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