Chinese tourists drive Singapore’s retail property growth

Recovery in high-spending Chinese tourist volume key to driving tourism and retail property growth.

May 03, 2024

China has remained a key source market for international tourists to Singapore, with associated spending propelling Singapore’s sustained recovery in tourism and retail property.

Singapore’s tourism receipts, excluding sightseeing, entertainment and gaming, (TR-exSEG) reached SGD 16.4 billion over the 1Q-3Q23 period, surpassing the SGD 16.1 billion achieved for the corresponding pre-COVID period in 2019. Also, tourism receipts on shopping and food & beverage (F&B) hit SGD 6.7 billion in the 1Q-3Q23 period, exceeding the 1Q-3Q19 level by 11% despite a tourist arrival return rate of 71%, according to the Singapore Tourism Board (STB).

Chinese tourists continue to rank top in retail and F&B spending in Singapore

Chinese tourists were the largest contributor to TR-exSEG in 1Q-3Q23, followed by Indonesian tourists, mirroring the 2019 pre-COVID trend. This was despite a low 35% return rate of Chinese tourists in 1Q-3Q23.

Additionally, tourism receipts for shopping and F&B per Chinese tourists were the highest among tourists from the top ten source markets of TR-exSEG in 1Q-3Q23, followed by Indian tourists. Unfazed by the sluggish Chinese economy, wealthy Chinese tourists continued to spend more in Singapore’s retail market than tourists from other top source markets.

The desire among Chinese tourists for diverse tourism experiences, a premium shopping haven, and a safe, welcoming and politically neutral travel destination continues to draw them to Singapore.

The recovery in Singapore’s inbound Chinese tourist volume, underpinned by improved flight connectivity and capacity and the mutual 30-day visa exemption agreement between Singapore and China, will be key in driving a sustained recovery in Singapore’s tourism and retail property markets.

Figure 1: Singapore’s TR-exSEG by top source markets in 1Q-3Q23

*The UK was not a top source market of TR-exSEG in 1Q-3Q19. The UK's TR-exSEG in that period was estimated based on the STB’s data
Source: STB, JLL Research

Figure 2: Singapore’s tourism receipts for shopping and F&B per visitor of Singapore’s top source markets of TR-exSEG in 1Q-3Q23

* The UK was not a top source market of TR-exSEG in 1Q-3Q19. Hence, the spending breakdown of UK's TR-exSEG was not disclosed by the STB
Source: STB, JLL Research

Rising wealth in the region continues to draw regional tourists

Spending on shopping and F&B per visitor by regional tourists, particularly from Indonesia and the Philippines, has also been relatively high.

Rising affluence in the region supported increased spending of repeat regional tourists, drawn by quality medical services, premium shopping, in-demand international acts and concerts, and wealth management or legal services.

Iconic attractions draw international tourists

Singapore’s iconic tourist attractions, particularly social media-friendly attractions and Singapore’s hawker cultural offerings, draw international tourists. These include the Supertrees at Gardens by the Bay and Marina Bay Sands’ Observatory Deck and Infinity Pool selfies offering a panoramic vista of Singapore’s city skyline. Singapore’s sizeable investments in developing high-quality and novel experiences and tourism offerings will continue to draw new and repeat visits from international tourists.

Financial hub status attracts business travel

Singapore’s accessibility and reputation as a global pro-business and financial hub continue to attract international tourists for business travel and meetings, incentive travel, conventions and exhibitions (BTMICE) and encourage vacations for tag-along spouses or family members.

Government investments accelerate tourism recovery

Singapore’s additional SGD 300 million investment to boost the tourism industry with new and refreshed tourism offerings will bolster the recovery of the tourism and retail property market.