SINGAPORE (Mar 22): Capital investment in Singapore’s travel & tourism sector is expected to rise 4.5% to $20.9 billion in 2018 from $20 billion in 2017, and rise by another 5% per annum over the next decade to $33.9 billion in 2028.

This is according to the latest projections by the World Travel and Tourism Council’s (WTTC) country report on Singapore, which comes as part of its annual Economic Impact Report for 2018.

In its Country Economic Impact Analysis report, WTTC highlights travel & tourism related investment spending as an “important aspect of both current and future activity”, even though it is not considered to contribute directly to national GDP.  

Based on WTTC data, the direct contribution of the travel & tourism sector to Singapore’s GDP was $17.7 billion, which is 4.1% of total GDP in 2017. This is forecast to rise by 2.6% in 2018 and 3.2% per annum from 2018-2028, to $24.9 billion, which is 4.4% of total forecast GDP in 2028.

However, in terms of the sector’s total contribution of the sector to GDP, this totalled $43.5 billion – making up 10.22% of GDP in 2017. Total contribution of the sector to GDP is forecast to rise by 3.5% in 2018, and to rise by 3.6% per annum to $64.2 billion, which is 11.4% of the forecast GDP for 2028.

Direct contribution to GDP reflects the internal spending on travel and tourism, i.e. the total spending within a particular country on the sector by both residents and non-residents for business and leisure purposes, as well as government ‘individual’ spending which is directly linked to visitors, such as cultural or recreational facilities like museums and national parks.

Total contribution, however, includes both the indirect and induced impacts on the economy, and includes the GDP and jobs supported by travel & tourism investment spending; government collective spending made on behalf of the “community at large”; and the domestic purchases of goods and services by the sectors dealing directly with tourists.

Capital investment, which is considered as a form of indirect contribution under WTTC’s definition of total contribution, includes capital investment spending by all industries directly involved in the travel & tourism sector.

This also constitutes investment spending by other industries on specific tourism assets such as new visitor accommodation and passenger transport equipment, as well as restaurants and leisure facilities for specific tourism use.

Based on percentage of the travel & tourism sector’s share in total capital investment in 2017, Singapore’s 20.9% share far exceeded the Southeast Asian average of 6.4%.

The projected growth in travel & tourism investment in Singapore, however, falls behind the regional average at 4.5% compared to 5.4%, respectively.

According to WTTC’s global forecast in its annual Economic Impact Report, the global travel and tourism sector is expected to see a modest slowdown this year from its record high in 2017 as a result of higher oil prices and airfares as well as rising interest rates.

It projects a 4% growth in 2018, but keeps its long-term forecasts unchanged at 3.8% average annual growth over the 10 years.