Changing spending habits and the path to recovery

As the Lunar New Year enters a season of renewal and celebration, countries across Asia have seen a significant surge in visitor arrivals, a testament to the enduring appeal of cultural festivals and the easing of travel restrictions. Among the countries reaping the benefits of this tourism boom, Singapore stands out, welcoming a significant influx of visitors, particularly from China. The boom has visa-free stays of up to 30 days, luring vacationers to explore the vibrant city-state. Although Chinese visitor numbers are down compared to pre-pandemic numbers, the Lion City remains a favorite destination, with places like the Singapore Zoo and Universal Studios Singapore seeing a spike in bookings for the festive season.

Changes in tourism spending habits

While the increase in visitor numbers gives confidence to the tourism sector, a significant change in spending behavior has emerged. Tourists from China in particular show a tendency towards expensive shopping, favoring mid-market stores over luxury boutiques. The shift reflects a broader trend in travel spending, underscoring the need for retail sectors to adapt to evolving consumer preferences. Meanwhile, the resurgence of long-haul international travel among Chinese travelers is set to double international outbound travel by 2024, signaling a strong recovery in the tourism industry.

Regional tourism dynamics

Beyond Singapore, neighboring countries are also experiencing significant growth in visitor arrivals. Thailand, with visa-free arrangements with China, is approaching pre-pandemic levels of daily tourist arrivals, highlighting the mutual benefits of simplified travel policies. Similarly, Cambodia celebrated a surge in tourism during the Lunar New Year holiday, with the provinces of Preah Sihanouk, Siem Reap and Battambang attracting both locals and foreigners. Cambodian tourism industry revenue is set to exceed $3 billion by 2023, with ambitions to surpass 2019's record tourist arrivals.

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Challenges and opportunities ahead

Despite the positive trend in visitor arrivals, not all sectors are experiencing an equal recovery. In Hong Kong, although the government reported 1.43 million visitors during the Lunar New Year holiday, sectors such as food and beverage and retail are still struggling with a 20 percent drop compared to 2018 levels. This disparity highlights the ongoing challenges local businesses face in attracting tourism spending. The successful extension of border crossing hours offers a glimpse into possible strategies to improve tourism experiences and increase economic gains, as Secretary-General Eric Chan noted.

As Asia positions itself at the forefront of the global tourism recovery, Lunar New Year celebrations have lit the way forward. The increase in visitor arrivals, along with a shift to more focused spending, presents both challenges and opportunities for the tourism and retail sectors. Countries such as Singapore, Thailand, and Cambodia are examples that demonstrate resilience in the face of growth and adversity. As the world continues to navigate the challenges of post-pandemic recovery, these countries' stories offer valuable lessons in adaptability, innovation and the enduring appeal of cultural heritage.

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