Rebuilding Asia Tourism 7-14-2003

Singapore now in full swing with tourism marketing campaign

By: Alan Yonan Jr.

Singapore is counting on a multimillion-dollar marketing campaign with glitzy attractions and discounted travel packages to lure back travelers frightened off by the SARS outbreak, but experts say it could take months before things return to normal.

Leisure and business travel to the Lion City plummeted following the first reports of the flu-like disease in mid-March.

At the depths of the crisis in April and May, visitor arrivals were down roughly 70 percent from last-year levels. While occupancy rates in some hotels dropped as low as 5 percent.

The removal of the city-state from the World Health Organization’s list of SARS-affected areas on May 31, however, has sparked optimism that a rebound in the embattled travel sector may finally be taking hold.

While arrivals continued to drop in June from a year earlier, the pace of decline slowed.

Preliminary estimates indicate that arrivals were down 56 percent in June versus a year earlier. And compared with May’s dismal numbers, June arrivals were estimated to actually have risen 47 percent on a seasonally adjusted basis.

“The signs so far are positive that we have turned the corner on visitor arrivals and that we can expect a steady and sustainable recovery in the coming months, said Lim Neo Chian, chief executive of the Singapore Tourism Board.

Still, travel industry officials and analysts say restoring business to pre-SARS levels won’t happen overnight.

“There is still a perception of a safety risk in coming to Asia,” said Mark Webb, a Singapore-based airline analyst for HSBC Securities.

“It will take long-haul travelers about three to six months to get relaxed about travel to Asia,” he said. “A lot of people have mentally crossed off Asia as a tourist destination for a while.”

In the meantime, bargain airfares are helping carriers fill seats that otherwise would have gone empty.

In the case of Singapore Airlines, 15,000 tickets were snapped up in a matter of hours last month when the national carrier last month cut prices by up to 75 percent on flights to the city-state.

“These kinds of things are going to have an impact,” said Peter Harbison, managing director of the Sydney-based Centre for Asia Pacific Aviation.

“People tend to be very easily influenced by cheap prices. The only risk from the airlines’ perspective, of course, is starting to create expectations that fares will always be this low,” he added.

Winning back the hearts and wallets of visitors is an economic priority for not only Singapore, but also Hong Kong, which was taken off the WHO’s SARS list on June 23.

Tourism generates between 5 percent and 6 percent of annual economic growth in both cities, a far greater percentage than in other SARS-hit areas in Asia, such as mainland China and Taiwan.

The World Travel & Tourism Council, a global industry body with its headquarters in London, estimated that Hong Kong will lose about $3.6 billion, and Singapore about $2.6 billion from their broader tourism economies this year because of SARS.

Singapore is enlisting the services of Ricky Martin, World Wrestling Entertainment Smackdown and Bollywood stars from India to entice travelers as part of its $115 million “Singapore Roars” campaign that will extend for six months.

Not to be outdone, Hong Kong has launched a nine-month, $50 million marketing campaign with Jackie Chan as its main pitchman.

The response from the United States to Hong Kong’s effort is “so far so good,” said Lillibeth Bishop, a Los Angeles-based spokeswoman for the Hong Kong Tourism Board.

Tourists weren’t the only visitors to abandon Singapore and Hong Kong in the wake of SARS. Business travelers avoided all but essential travel there.

The American Chamber of Commerce in Singapore is working to overcome continuing perceptions among business travelers that SARS still presents a health risk on Singapore.

“We see confidence returning. Our members are reporting that Singapore is back on the travel agenda of business colleagues,” said Kristin Paulson, AmCham chairman.

“Internationally there may be still pockets of hesitancy about visiting Asia but good news is not always compelling news, so the message can be a difficult one to promote.”