Singapore’s tourism industry is an instrumental contributor to the nation’s economy. In 2019 itself, the island-nation saw over 19 million international tourists, a figure more than three-fold its population. The COVID-19 global pandemic has further underscored the importance of the industry and subsequently exposed the potential risk of over-reliance. Based on data from the World Travel & Tourism Council and the Singapore Tourism Board, this week’s Chart of the Week depicts the contribution of the tourism industry to Singapore’s total employment and GDP.
- Singapore’s reliance on the tourism industry has been stable over the years. The total contribution of the tourism industry to both total employment and GDP has consistently been above the 10 percent mark.
- Since 2015, the percentage of contribution has been declining despite growing visitor arrivals. This highlights the possibility that Singapore’s economy is transitioning away from the tourism industry. Nevertheless in 2019, the tourism industry’s contribution to total employment and GDP was above 14 percent and 11 percent respectively.
- Before 2019, the 1997/98 Asian Financial Crisis, 2001 9/11 terrorist attacks, 2003 SARS crisis and the 2008/09 global financial crisis all resulted in substantial declines in Singapore’s tourism industry. The SARS crisis had the deepest impact. However, in comparison, the impact of SARS was pale in comparison to the current COVID-19 global pandemic.
- Visitor arrivals plunged to an all-time low as international travel grinded to a halt in 2020. As international tourism spending makes up a significant portion of total tourism expenditure, the tourism industry has suffered heavy losses that are likely to increase unemployment in tourism-related sectors. The SIA Group have recently announced a retrenchment exercise to cut 4,300 positions across its three airlines.