Global Economic Outlook Keynote
Transcript
Dr Edward Koh:Dr. Benson Tang, fellow participants of today's Singapore Corporate Travel Summit, a very good morning to you, and to our friends from overseas, a warm welcome to Singapore. If this event were to be held 3 years ago, it would have been an online event. We would have totally missed out on our charismatic Benson's energy and wisdom in person. So very thankful it's 3 years later. And those of you who are like me, based in Singapore, you might still remember familiar acronyms like SMM, Safe Management Measures, SDAs, Safe Distancing Ambassadors, ART, PCR. Remember the TraceTogether token? It's been a very fast 2, 3 years. At a personal level, I've learned to order food online very efficiently. But I think at the larger— in a larger context, I think the business events industry has emerged a lot stronger. And there are many useful lessons learned during the pandemic. And we are clearly on the recovery trajectory. But we always must be prepared for headwinds that might throw us off course. All right. Now, I hope I don't repeat too much of what Benson has shared, but as most of us know, the global recovery is on its way. The recent World Economic Outlook by IMF, International Monetary Fund, described the road ahead as a rocky recovery. It's a very uneven recovery. We are projecting a growth rate of 2.8% 2023, this year, down from 3.4% in 2022. For those of us who opened a bit later, this feels a bit not intuitive because last year wasn't a full opening, this year is a full opening, but somehow it seems like growth rate is slowing down. And in 2023, we will see fragmented developments with some regions outperforming others. And I think we start off with Asia. We see China's recovery to be stronger than expected, driven by the pickup in domestic services consumption following the lifting of its COVID-19 restrictions. Still, there are stresses in its property market, as some of us know. Will continue to weigh on its recovery. I recently returned from China. It feels like a very different China from the one I used to live and work for more than 10 years. A popular term was coined recently. It is called chongyou, as in— direct translation would mean poor travel. But as we know, there are many layers to Chinese terms, and chong actually also Refers to complete or a thorough scan of everything. So chongyu could very well be a more in-depth travel demand, and I think that could be a useful reference point as we revisit and rethink how we should engage the Chinese audiences. And in Southeast Asia, the growth prospects remain strong for economies like Malaysia, Thailand, Indonesia, supported by very resilient domestic demand, as well as continued recovery in tourism demand. I remember covering the Southeast Asian markets and remember Vietnam was one of the star performers for us in terms of visitor arrivals. And indeed, I think IMF has projected that Vietnam will grow by 5.8% this year and 6.9% in 2024. Domestically in Singapore, the Ministry of Trade and Industry has forecasted Singapore's 2023 GDP to be between 0.5% to 2.5%, likely to land somewhere in the middle. There are downside risks in the global economy, but growth outlook for aviation and tourism-related industries remain positive given the ongoing recovery in international air travel and inbound tourism. For Singapore's tourism sector performance, we are expecting to receive about 12 to 14 million visitors this year. As of May, just last month, we welcomed 5.15 million visitors to our shores, spending on average just almost 4 days in Singapore. And barring unexpected circumstances, we do expect tourism activity to recover to pre- pandemic levels by 2024, next year. As we've read in the news, Changi Airport has seen passenger traffic in— the latest was in March 2023— to 82% of pre-COVID-19 numbers. And this is even though connections between Singapore and the many cities in China is only up to 50% pre-COVID levels. In terms of business events outlook, and based off the 2023 Global Economic Significance of Business Events report, by the EIC, we do expect global event direct spending to reach about 81% of 2019 levels and expected to resume to full pandemic levels by 2024. And similar sentiments were shared by respondents in the Deloitte 2023 Corporate Travel Study, as you're probably quite familiar, that full recovery to 2024 is possible by late 2024. Right, so it's obvious that people still seek opportunities to connect in person. From the EIC report, the 1,100 event organisers surveyed ranked relationship management, awareness, and new customers as the most important ways to measure the catalytic impact of business events. In fact, 67% viewed building relationships through face-to-face interactions as most difficult to replace. 22% of new customers, they expected to be generated through in-person events. They believe an average of 44% revenue will be lost without hosting in-person events, and that the reduction of business events due to the pandemic led to significant loss of innovation, with 65% reporting a reduction in R&D prioritisation. Well, really, as the demand for in-person events return, the industry is obviously operating under immense pressure to deliver events with shorter turnaround time amidst economic uncertainty and rising costs. And the challenges can really be summarized in this very simple— we call it, you know, the triple constraint theory by Agile Practice. Quality of events is adversely affected by increased scope specifications, less time for planning, and higher costs in general. And in fact, surveys of event planners by Cvent and American Express Meetings and Events reported a significant proportion facing budgetary constraints due to rising prices, F&B, airfares, which have led to organisations rethink about event format and programmes. So stressed. Well, according to the Global Travel Managers Report by Wakefield Research, nearly half of those surveyed are apparently more stressed today than they were 12 months ago. I'm not sure how you feel the same, but it's a 10-point increase over the year before, where only 37% said they feel very stressed. Another 18% said it's as stressful as last year, and the strains of the job are obviously hitting certain regions hard, particularly the APAC region. Nearly 3 in 5 travel managers felt that their role is more stressful than before, as compared to 45% and 41% in the Americas and Europe respectively. So it starts— obviously crucial for us to consider the way existing resources are managed, human capital, is managed. And the MICE sector, the business event sector, is really all about people, as we know, both on the main event floor and behind the scenes. And really, to sustain the growth of this industry, there needs to be a pipeline of manpower. We see in Singapore, we need to get people back. And really, to share what we've been doing here in Singapore, we recognise the challenge. And really, the STB has been working with SACIOS, Singapore Association for Convention Exhibition Organisers and Suppliers, have been trying to get our fair share of talent back to the industry. We actually launched the best practice, best internship practice from the mines sector in April, and this was developed in consultation with the universities and industry players. We want to provide the best set of best practice. This includes mentorship framework, recommended working hours, leave benefits, workplace safety, etc. And really moving forward, as we all know, sustainability is of greater importance, of priority. The pandemic has actually drove the MICE industry to adopt technology at speed never seen before. And hybrid meetings could be here to stay or not, but it's obvious we have started to use a lot more of the technology that we've learned during the pandemic. In fact, there are many event organisers I've met, actually I meet them on a daily basis. Some say do away with the option of online because it forces people to come to the event. Some say please continue to have that because some people still really need that option for certain parts of the programmes. But on the sustainability front, really Singapore has been recently certified by GSTC, the Global Sustainable Tourism Council as the first country to be destination certified. And we are again working with our industry partners and industry associations to do more on this front. In fact, we are working on the GSTC Mines Criteria. It's going to be the first global mines criteria, and we have an active role in framing that. So if anyone's interested, have views on how things should be done going forward, please feel free to reach out to me or any of my STB or SouthSails colleagues. Well, I'm just going to end off and just really want to say that today obviously looks very different from 3 years ago. In fact, it looks— should look different from yesterday. And I think 3 years of pandemic have built us to be resilient and agile, to adapt and change when needed. And really with the right people having the right conversation at the right time, there's a possibility of sparking off the right ideas and good ideas along the way. So with this, I wish everyone a very good conference, and I look forward to having more interactions with you later on. Thank you once again.
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