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What economic impacts does Singapore tourism have

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Published: Mon, 5 Dec 2016

What economic impacts does Singapore tourism have? Tourism has a variety of economic impacts. Tourists contribute to sales, profits, jobs, tax revenues, and income in an area. The most direct effects occur within the primary tourism sectors which are accommodation, restaurants, transportation, entertainment, and retail trade. Through secondary effects, tourism affects most sectors of the economy. An economic impact analysis of tourism activity normally focuses on changes in sales, income, and employment in a region resulting from tourism activity.

The tourism industry is a primary engine of growth in the Singapore economy. The tourism sector is closely linked to several key economic sectors and sub-sectors such as transport, construction, wholesale and retail trade, hotels and restaurants. Tourism spending has sustained domestic demand. Changes in tourism expenditures will change the sales revenues of firms catering to tourist needs for different goods and services, which will change the sales revenues of various direct supplies of catering firms. This in turn will change the sales revenues of other firms from whom the direct supplies purchase inputs. As the recipients of the direct and indirect tourist expenditures spend their changed incomes, the demand for goods and services will change again. As a result, the ultimate change in GDP, total value added and employment will be much larger than the initial change in the tourism industry.

According to http://www.wttc.org/eng/Tourism_Research/Tourism_Impact_Data_and_Forecast_Tool/index.php. Results for Singapore, Total economy-wide activity (US$ bn), between 1988 – 2008. The total gross domestic product in Singapore has US$25.4211bn in early year of 1988 and increased all along the year until 1997 has US$95.8666 bn. After that, between years 1997 until 2000 is no in a fixed pattern, but in year 2001 is start increased until US$181.87 bn in year 2008. And for the direct and indirect impact in economy aggregates, in year 1988 has US$18.6289 bn increased 3 years until US$21.2699 bn in year 1990. After that, start from year 1990 has decreased until US$12.1081 bn in year 1997. And for the year 1998 and 1999 has increased US$0.965 bn become US$13.0731 bn then start from year 1990, it is decreased until US$7.81557 bn in year 2008.

In the other sources, from Travel & Tourism Economic Impact Singapore 2009. Singapore’s travel & tourism is expected to generate SGD18 bn (US$13 BN) of gross domestic product (GDP) in 2009. In the facts at the figure above, The Travel &Tourism Industry is expected to contribute directly 2.1% to (GDP) in 2009 which SGD5.3 bn (US$3.6 bn), rising in nominal terms to SGD6.3 bn (US$4.7 bn), it is equivalent to 1.4% of total by 2019. The industry’s direct impact is SGD 5 bn (US$4 bn). However, since travel & tourism touches all sectors of the economy, its real impact is even greater. Exports, services and mrchandise is SGD 19 bn (US$13 bn), it is equivalent to 3.2% of total exports.

Singapore: Travel & Tourism Gross Domestic Product (2000 constant US$ bn)

Unfortunately, as we see at the figure above, Travel & Tourism in Singapore is forecast to see real decline of direct industry GDP is 5.4% to SGD5 bn (US$4 bn) in year 2009. And over the next ten years, it is expected to achieve annualised real growth of 0.9% to SGD6 bn (US$5 bn) in year 2019. Which means the contribution of Travel & Tourism to GDP is expected to decline from 7.3% to SGD18.4 bn (US$12.6 bn) in 2009 and by 10 year trend it is expect to decline again into 5.5% to SGD24.1 bn (US$17.9 bn) by 2019.

Not only that, the real economy GDP growth for the Travel & Tourism Economy is expected to be decrease 10.2% to SGD 18 bn (US$13 bn) in 2009 and to average 1.9% per annum over the coming 10 years. Besides that, export earnings from international visitors and tourism goods are expected to generate 3.2% of total exports SGD18.7 bn (US$12.8 bn) in 2009, growing in nominal terms) to SGD39.7 bn (US$29.4 bn) it is equivalent 2.8% of total in 2019.

In 2009, Travel & Tourism is expected to post SGD56.3 bn (US$38.5 bn) of total demand, growing to SGD106.8 bn (US$79.1 bn) by 2019. Total demand is expected to decline by

-7.2% in 2009 and by 5.7% per annum, in real terms, between 2010 and 2019. 2009 total demand represents 0.58% of world market share.

In the macroeconomic affect, the significant effect of Singaporean tourism expansion on GDP and employment results from two facts. First, the service industry is very important in the Singapore economy (accounting 66% of GDP). Second, tourism has significant backward linkage, which means an increase in tourism expansion has great potential to increase output in sectors which are directly or indirectly related to the tourism industry. However, the increase in GDP and employment resulting from tourism expansion will be less than because it ignores the negative general equilibrium effects on some traditional industries.

The price level, wage level and exchange rate are all expected to rise, because Singapore is a small country with limited resources. An expansion of the tourism industry requires more resources and thus bids up resource prices and wages. The increased production costs in turn will push up commodity prices. As a result, both wages and the price level will increase. In the same patent, the strong demand for Singapore dollars due to tourism expansion will pull up the price of Singapore’s currency and thus bid up exchange rate.

As a conclusion, Tourism is an important economic activity in Singapore. The Singapore’s government must give commitment to its tourism in order to development an international tourism and promotes a sustainable economic growth.

Employment:

Besides that, employment is one of the most readily available indicators to begin measuring the social impact of tourism, since job creation generally helps create the opportunities for better standards of living and related conditions of socio-economic progress. Tourism contributes significantly, both directly and indirectly, to the creation of employment. In 2006, the tourism economy (direct plus indirect contribution) provided jobs for about 140 million people in the selected sub-regions and countries of the Asian and Pacific region, representing an average of 8.9 per cent of total employment.

The International Labour Organization (ILO) reported that the hospitality sector in Singapore attracted a relatively high proportion of female workers. In 2000, there was an almost even ratio of females to males working in the hotels and restaurants sector (that is, a gender ratio of

48.5:51.5). This is compared with a 39:61 gender ratio for the Singaporean workforce as a whole. It was noted that there was a higher proportion of younger (15-19 year olds) and older (50 years and over) workers, particularly women, in the hotels and restaurants sector compared with all sectors generally. Average earnings in hotels and restaurants were the lowest of any category in Singapore’s formal sector.

The contribution of the Travel & Tourism economy in Singapore to employment is expected to fall to 167,000 jobs in 2009, 5.8% of total employment or 1 in every 17.2 jobs to 137,000 jobs, 4.1% of total employment or 1 in every 24.7 jobs by 2019.

Tourism in Singapore also has a high employment multiplier of 25, meaning that for every additional S$1 million spent by tourists, it creates employment for an additional 25 workers. As of end 2008, employment in Singapore stands at almost 2.96 million. The main employers in Singapore are in the services industry (67.3 percent), followed by manufacturing (19.8 percent) and construction (12.2 percent).

Based on 1988 input-output tables, Khan et al. (1995) estimated that tourism contributed 11.9% to Singapore’s GDP (Gross Domestic Product) in 1992, while employment accounted for 13.4% of the labor force. The employment effect of a million dollars in tourist expenditures would create 25 new jobs. The results showed that every dollar of tourist expenditure would generate S$1.97 of output and S$1.05 in income. The tourism output multiplier was greater relative to other sectors of the Singapore economy.

Singapore’s labor force was comprised of approximately 2.1 million workers in June 2002. The major sectors of employment in Singapore in 2002 were: community, social and personal services (26 percent); manufacturing (18 percent); wholesale and retail trade (21 percent); business and financial services (17 percent); and transport, storage and communications (11 percent). The top occupational groups in 2002 were: production craftsmen, operators, cleaners and laborers (30 percent); professionals and managers (25 percent); technicians and associate professionals (17 percent); clerical workers (13 percent); and service and sales workers (11 percent). In 2002, female workers made up 44 percent of the total Singaporean labor force. The female labor force was composed of 927 thousand workers, and had an employment rate of 95 percent.

Unemployment in Singapore reached a high of 4.6 percent in September 2002, but fell back to 4.2 percent by the end of the year. Job losses have come mainly in the manufacturing sector.21 The top occupational categories of the unemployed in 2002 were: production craftsmen, operators, cleaners and laborers (23 percent); service and sales workers (16 percent); clerical workers (16 percent); professionals and managers (13 percent); and technicians and associated professionals (12 percent).

The Singapore Tourism Board’s (STB) report showed that visitor arrivals to Singapore plunged by 61 per cent in the April of year 2003, as compared to the same period a year ago. Hotel occupancy rates fell to 20-30 per cent from normal levels of at least 70 per cent. The Singapore Retailers Association reported that sales could fall by as much as 75 per cent for some firms. Declines for general stores perhaps range between 20 and 40 per cent. Singapore, which like Hong Kong, China, relies heavily on tourism and its role as a regional transport hub, has cut its economic growth due to the impact of SARS.

In Singapore, the Ministry of Manpower, the National Trades Union Congress and Singapore National Employers Federation said in a joint statement 15 April that whatever steps necessary should be taken to save jobs in tourism-related industries hit by the SARS scare. The government announced relief measures worth 230 million Singapore dollars (130 million US) on 17 April 2003. The package includes rebates for airport landing fees, a reduction of the levy paid by employers for their foreign workers and property tax relief for shops, hotels and restaurants. It will take effect May and last until the end of the year.

Latest figures released by the Department of Statistics for its 2000 population census reveal that today’s worker has higher qualifications, and is more likely to be working in a high-tech or service industry and hold a professional or technical position. Fewer are taking up jobs as cleaners, labourers and production operators, while the proportion of professionals has almost doubled from 5.3% in 1990 to 10.1% in 2000. Ten years ago which is year 1990, almost a fifth of Singaporean workers had no education, while 60% held primary and secondary school certificates. A decade of intensive education has reduced these figures – now only one-tenth have no education. 50% hold primary and secondary school certificates and 42% hold post- secondary qualifications, more than double that in 1990.

The government will review the levy on foreign workers and domestic maids in 2001 when the economic climate becomes clearer. Manpower Minister Lee Boon Yang told reporters on 10 Dec 2000 the government would see whether the levies set during the economic downturn continued to be relevant, or if they should be adjusted to reflect the change in the economic environment.

The Manpower Ministry’s labour market report for the second quarter of this year, released on 14 Sep 2000, found that although employment has gone up, more older workers are being left on the shelf in the job market. The percentage of those aged 40 and above among the ranks of the unemployed rose from 31.5% in June 1997 to 43.8% in June this year. In contrast, the proportion of unemployed people under the age of 30 dropped sharply over the same period – from 45% of the total to 29.3%. In March this year, more than 6 in 10 of older workers were hired within three to six months after they were retrenched, but this dropped to 56.6% in June. The report noted a shortage of professionals, engineers, process technicians, nurses and other highly-skilled employees. The national unemployment rate rose from 3.4% to 3.5% in June due to a mismatch in the demand and supply of labour.

The latest statistics from the Ministry of Trade and Industry showed that 30,800 jobs were created in the second quarter of 2000. This raised the total employment gain in the first half to 44,500 jobs. Retrenchments in the second quarter tumbled to 1,700 from 6,046 in the first quarter of 2000. The ministry said on 10 Aug 2000 that structural unemployment was likely to persist unless workers renewed their skills to keep up with changes in the economy.

The unemployment rate for June 2000 was 3.5%. For the first half of this year, 7,700 people were retrenched, compared to 6,700 in the same period last year. Most of the retrenchments came from the manufacturing sector, which was severely affected by the cycle of upgrading and restructuring, said Manpower Minister Lee Boon Yang on 6 Aug 2000.

Deputy Prime Minister Lee Hsien Loong on 29 Jun 2000 announced a major overhaul of the civil service reward system. Life-long employment will become a thing of the past, with government administrative officers serving fixed terms in top positions, ensuring renewal in the civil service. People are still losing their jobs despite the robust economy, according to the latest labour market survey. About 6000 workers were laid off in the first quarter of the year, up from 4475 in the last quarter of last year, as companies restructured their operations. This was despite the economy growing by 9.1% in the first quarter.

In conclusion, we can see that through the data in WTTC, the number of employment had reached its highest in year 1990 while in year 2003 had reached its lowest. This is because in year 1990, the proportion of professionals has tremendously increased. In year 2003, the impact from SARS cases had caused the number of employment dropped.

Cultural:

Singapore has a unique socio-cultural heritage where modern lifestyle is combined with traditional cultural values. Singapore is basically an Asian country and bears through its citizens of mixed race of Chinese, Malay and Indian origins and Singapore arts and culture that are unique to these Asian countries.

The pattern of Singapore stems from the inherent cultural diversity of the island. The immigrants of the past have given the place a mixture of Malay, Chinese, Indian, and European influences, all of which have intermingled. Although the bulk of Singaporeans do think of themselves as Singaporeans without in sunder race or culture. Each still bears its own unique character. The old streets of Chinatown can still be seen, the Muslim characteristics are still conspicuous in Arab Street and Little India along Serangoon Road still has its distinct ambience. Furthermore, there are marks of the British colonial influence in the Neo-Classical buildings all around the city.

A growing number of cultural celebrations are emerging highlighting very important events and paying homage to ancestry such as cultural events assert cultural identity and help preserve local traditions in younger generations while influencing visitors firsthand. On the other hand, Tourism is an interface for cultural exchange, facilitating the interaction between communities and Visitors. It can bringing people of different cultures together, provides a direct contact between them and thus serves as a powerful means of diffusion of world cultures. It provides an opportunity of friendly and peaceful dialogue leading to better understanding between people and nations. It can build bridges and create friendship between nations leading to establishing of peace. So, people can different culture backgrounds in Singapore be able to adapt to socio-cultural changes due to the rapid growth of tourism and globalization.

Since the policies of the strategy were changed after 1983, tourist arrivals surprisingly declined after a decade of double digit growth. With this decrease, Singapore of Government has quickly changed its policies to invest more money in restructuring Singapore with modern infrastructural facilities and improvement of old attractions.

As tourism is considered a major contributor to the Singapore economy, the government has initiated the preservation of historic places and ethnic neighborhoods under urban renewal policies. Local Singaporeans believe that much of the old charm of these neighborhoods has been lost due to redevelopments.

Such as the tourism industry grows much faster than expected, Singapore invests in some upcoming tourism projects. Such as the Marina Bay Sands which have 100,000 square meters of MICE space, over 2500 luxury hotel rooms and two state of the art theatres that will host a range international and local programmers, the Resorts World at Sentosa which is Asia’s first and only Universal Studios outside of US, Singapore Flyers, Formula 1 Grand Prix and casinos. These upcoming projects will attract more tourists and change the lifestyle of Singaporeans. This research project aims at critically analyzing the impact of cultural factors on the growth of Singapore tourism.

There is a global trend towards investment in interpretation of natural and cultural resources. Attraction to natural and heritage icons often helps fund conservation efforts and provides opportunities for effective management of sensitive and significant areas. Besides that, cultural attractions are not the sole draw card for visitation but provide one of many experiences. For the sustainability of the national heritage, the conservation of the historical areas, which is the repercussions of the traditional life style and cultural characteristics of the communities of traditional pattern which evalutes the cultural, architectural and historical heritage.

The development of cultural factors within a nation is to enhance and attract international visitors. Tourism is always linked with cultural heritage and lifestyle. A successful tourism destination does not just provide better transportation and hotels but also provides a particular national flavor with traditional way of lifestyle and image of that particular destination. In another word, tourism not only promotes culture but also develops cultural relations.


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