Prashant Changrani and his family were looking forward to a week-long holiday in Singapore that was set to start yesterday. That was until the island state was engulfed in hazardous fire haze wafting across from Sumatra.
“Health comes before holiday,” businessman Changrani, 41, said in a phone interview from Mumbai after canceling the trip and room at the Orchard Scotts. “My twin girls are just 26 months old and they would never have been able to take this.”
Forest fires raging on the neighboring Indonesian island sent Singapore’s Pollutant Standards Index to a record 401 on June 21, a level deemed hazardous, according to the National Environment Agency. The haze may prompt more visitors to reconsider trips to Singapore, which was ranked Asia’s most- popular business destination in the first half of 2012 with hotel occupancy rates averaging 86% in the past three years, based on government data.
“It’s a bit early days at the moment, but if it goes on any longer, it must have some adverse impact on tourism numbers,” said Robert McIntosh, Asia Pacific executive director at CBRE Group Inc. “Anything that impacts the environment like this, particularly for a place so well-regarded for its clean environment, must have some impact and inevitably it means a fall-off in visitor arrivals.”
ECONOMIC DAMAGE
The pollution will hit tourism-related industries in Singapore, which make up as much as 6% of the economy, as well as construction, Joey Chew, an economist at Barclays Plc, said in a research note on June 20. A disruption for one week could cost the economy about US$1 billion ($1.28 billion), Barclays economist Wai Ho Leong said in an e-mail on June 19. Dry weather in 1997 fed blazes that caused US$4.4 billion in damages, according to the World Wide Fund for Nature.
Singapore was ranked Asia’s most-popular business destination in the first half of 2012, according to a survey of 2,500 people in nine countries by Accor SA. Conventions, conferences and trade shows rose 46% to 2,130 in 2011 from 2010, according to the Singapore Tourism Board.
The haze has prompted daily health warnings in Singapore and forced some tourist attractions to shut.
The Singapore Flyer, which operates the city-state’s ferris wheel, suspended operations last week, while Gardens by the Bay, a newly built botanical park near the Marina Bay financial district, halted some outdoor activities. The four attractions run by the Wildlife Reserves Singapore, including Jurong Bird Park and Singapore Zoo, observed a “a small dip” in visitor numbers, according to an e-mailed statement.
NEW SITUATION
“The impact on our business at this point is hard to quantify,” said Bas de Graaff, director of business development at Hilton Singapore. “It’s still a very new situation. A lot of our guests come from overseas, so they may not be fully aware yet of the situation, of the duration that’s expected or how serious it is at this time.”
Hilton has been at close to full capacity for most of last week because of the CommunicAsia conference, Asia’s largest communication technology event, said de Graaff.
Fairmont Singapore and Swissotel The Stamford have received queries from clients and guests expressing concern about the haze situation, Lim Ee Jin, director of marketing communications, said in response to Bloomberg News queries.
“In terms of overall business, we see a slower pace in dining reservations,” Lim said. “There have also been a few cancellations of room bookings as a direct result of the haze situation, but it is too early to tell if it will have significant impact on the business.”
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