VTLs with Indonesia and India have plus points, but there are also limitations

Headwinds will come from continued travel restrictions and cost concerns.
Headwinds will come from continued travel restrictions and cost concerns.ST PHOTO: LIM YAOHUI

SINGAPORE - 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 restrictions and cost concerns.

Observers The Straits Times spoke to on Tuesday (Nov 16) 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.

The arrangement with Indonesia is also only 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 and that 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. "We may still have to wait a little while, with industry experts still forecasting travel to recover only in 2023 and 2024.

"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 (Nov 15) said the land border between Singapore and Malaysia could reopen in a few weeks' time under a "vaccinated travel lane-like arrangement", after 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 plane 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.

"Changi's air hub status also depends on transit travel through Changi to other destinations in North Asia, Europe and the Middle East, and North America, as well as intra-Asean travel," he said, adding that it will take time for traffic to rebound since, even within Asean, most countries have yet to set up reciprocal VTLs with one another.

Still, India and Indonesia's economic importance for Singapore can only be boosted by the VTLs despite some limitations.

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.

Pre-pandemic, these two markets were just behind China's 14.9 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 to India 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 have flown to India at least once every two years for a month each time. "When they fly back now, it's like resigning because they cannot come back," he added. "We lost some of our workers as they were too homesick."

Mr Sham Ibrahim, area operation manager for Indonesian restaurant Tambuah Mas, said VTLs might help him recruit more employees from Indonesia, which has been on hold for the last two years.

"We definitely welcome the VTL," he added. "We usually work with partners in Indonesia to actively seek out graduates or those with hotel experience to come work here."

Maid agencies ST spoke to said the VTLs could help them bring in more domestic helpers, who are in high demand here, especially as people find it difficult to cope with balancing work and home duties amid work-from-home arrangements.

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

Even fully vaccinated Indonesians will 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 with a modest salary. When the VTL was announced, we thought we'd just need to show our fully vaccinated certificate, but as you can see, it's far from simple," he said.

"I have not been able to go home since July 2019. This VTL has very little impact for me."