Rumour has it that the magnetism of the nation's two Integrated Resorts (IRs) could be weakening as both visitor arrivals and expenditure figures showed slower growth in 2012.

In part attributable to a drag in the global economy and a stronger Singapore dollar, preliminary figures released by the Singapore Tourism Board (STB) reflected a poorer 9.0% y-o-y growth in visitor arrivals, contrasting with the double digit growth (20.2% y-o-y in 2010 and 13.1% y-o-y in 2011) in the preceding two years.

Consumer spending in Singapore also took a hit as growth in visitor arrivals outpaced growth in tourist receipts for the first time in two years.

An article by Bloomberg highlighted this concern, particularly in the gaming industry with key players reporting their lowest gaming revenues in 18 months at their Singapore casinos.

This reduction in revenues could be further exacerbated by the emergence of casinos in South Korea and the Philippines, which are geographically closer to the key markets of China, Taiwan, Hong Kong and Japan.

Also, the growing list of iconic attractions (e.g. Malaysia's Legoland and Hello Kitty Land) and increased retail offerings across South East Asia (SEA) are likely to reduce Singapore's share of regional tourist spending.

Where do we go from here?

Singapore faces the fundamental challenge of managing its limited land resources and will not be able to compete in terms of development scale and quantity with other fast-growing countries in the region.

However, the country's continuous drive towards a more productive business environment should give it an edge over its competitors in providing better quality services and innovative products. Secondly, with the nation already established as a key financial centre, it will remain a strategic platform for retailers looking to gain traction in the Asia Pacific and SEA markets.

Given the highly cosmopolitan social fabric and strong international media exposure through a myriad of international events, Singapore provides an invaluable and cost-effective test market for new retailers looking to penetrate Asian markets.

Nonetheless, it is evident that, apart from developing further iconic attractions, more has to be done to ensure sustainable growth in the tourism sector.

Competitor nations are already growing more quickly than Singapore, hence it is essential that Singapore preserve and strengthen its local identity in many aspects, especially in real estate.

This might translate into the conservation and preservation of the social and urban fabric, ensuring that older buildings and built-up areas as well as the unique way of life, are retained and not discarded due to economic pressure. Such a conservation policy is evident in many developed nations across Europe and Asia Pacific, and it is this kind of conservation "heartware" that will truly differentiate a nation's tourism landscape.

About the author
Clement Chua is the Research Analyst for Singapore at Jones Lang LaSalle.