Singapore's Orchard Road loses Chinese tourists, midrange spenders

[The_King]

SINGAPORE -- Orchard Road in Singapore, one of Asia's premier shopping streets, has yet to fully recover from the COVID-19 pandemic due to the slow return of Chinese tourists, according to the chairman of a local business group.

Markham Shaw, chairman of the Orchard Road Business Association, told Nikkei Asia in a recent interview that traditionally locals and tourists each do 50% of the consumption in the area.

"Orchard Road is very dependent on both local consumption and tourism consumption," he said. "And because tourism isn't really back to where it was pre-pandemic, I would feel that the sales on Orchard Road are probably not quite back to what they should be, either.

"I guess it's due to China's slowdown. The very strong Singapore dollar, too, [is] an issue for me. It's quite expensive for people to purchase here."

The yuan has depreciated more than 4% against the Singapore dollar this year.

Shaw said his association is tracking the Chinese economy quite closely. "We're hopeful," he said. "However, it really depends on how the Chinese economy progresses and whether their consumption and spending level comes up domestically."

The association plans trips to China in the coming months to gain an understanding of the situation, he said.

The city-state's official tourism statistics show total visitor arrivals came to 1.1 million in November, 28% lower than in the same month in 2019, before anyone had heard of COVID. Chinese accounted for about 104,000 arrivals, down 58% from four years earlier.

Shaw feels that the Chinese are "still the top spinner" on Orchard Road, followed by Indonesians. But he also noted the robust demand from Indian tourists. Singapore had about 90,000 Indian tourists in November. The large number of "Indian tourist arrivals was a surprise," he said. "It was very strong."

Markham Shaw, the chairman of the Orchard Road Business Association, believes tomorrow's tourists will be more likely to spend their money on hotels and at boutiques that mind their energy and waste usage. (Photo by Fumika Sato)

Orchard Road is home to luxury brand boutiques, shopping malls and hotels, and Shaw pointed out that spending on high-end goods remains high.

"Right now," he said, "we're sort of at a level where we can survive, and the numbers are good, particularly for luxury. The spend on luxury goods on Orchard Road has been very high and remains high. It's a lot of the mid-range spenders that's missing."

He noted that Singapore in January will raise its goods and services tax (GST) rate to 9% from 8%. The increase, Shaw said, won't "affect the tourists much, but it does affect locals. It's half of the spend of Orchard Road. Ideally, we would love the government to come and delay that a little bit."

Currently, the business association is encouraging its member companies to focus on "the sustainability of Orchard Road," perhaps by using renewable energy or reducing waste, to maintain the area's attractiveness to tourists, Shaw said.

"I think that the next group of travelers that come to Singapore will be more conscious travelers," he said. "They'll be looking to stay in hotels where they see less waste."

[The_King]

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