Singapore flags weaker tourism spending as global travel industry faces uncertainty

Singapore, long viewed as a bellwether for the global economy, expects tourism spending to soften this year despite forecasting another increase in visitor arrivals, reflecting concerns that conflicts in the Middle East could weigh on consumer and business spending.

The Singapore Tourism Board projected tourism receipts of 31 billion and 32.5 billion Singapore dollars ($24 billion to $25.6 billion) in 2026, compared with a record of 32.8 billion Singapore dollars last year. International arrivals are forecast to rise to between 17 million and 18 million this year, from 16.9 million in 2025.

The city-state is a regional hub for business travel and airline stopovers and has hosted major events, including the Formula One Singapore Grand Prix and concerts by megastars Taylor Swift, Coldplay and Blackpink. Tourism accounted for 6% of Singapore's services exports in 2024, according to the Singapore Tourism Board.

Despite visitor arrivals rising 3% in the first quarter from a year earlier, tourism spending is expected to soften because of "muted demands in the months ahead", Melissa Ow, chief executive of Singapore's Tourism Board, said at the country's annual industry conference.

The caution from Singapore's tourism authorities echoes broader concerns across the business travel industry. The Global Business Travel Association said geopolitical tensions and higher fuel costs were creating instability across international travel markets, even as Asia remained comparatively resilient.

Asia Pacific accounts for more than 40% of global business travel spending, according to the Global Business Travel Association.

Suzanne Neufang, CEO of the Global Business Travel Association, told CNBC's Monica Pitrelli that business travel globally has yet to fully recover to pre-pandemic levels, even as travel costs remain elevated.

While geopolitical or economic "wobbles" are inevitable, Singapore's tourism strategy still has "one and a half decades to go," Ow said.

Singapore's "Tourism 2040" strategy aims to increase tourism receipts to between 47 and 50 billion Singapore dollars by 2040.

In 2025, a record of 70 million passengers passed through Singapore's Changi Airport.

"Uncertainty is not the travel industry's friend," Neufang told CNBC. However, meetings and conferences remain among the most resilient segments of the travel industry, she added.

South Korean boyband BTS' planned four-night Singapore stop in December is also expected to support tourism demand. Ow said Singapore's calendar has remained "very resilient" despite flight disruptions linked to tensions in the Middle East.

Singapore also announced a three-year partnership with South Korean drama production company Mr Romance. The first collaboration, "Buy King," is being filmed in Singapore and stars South Korean actors Ju Ji-hoon and Lee Jun-ho.

Singapore Minister-in-charge of Trade Relations Grace Fu said at the event that the government would inject a fresh 740 million Singapore dollars into the Tourism Development Fund over the next five years, on top of more than 300 million Singapore dollars announced in 2024.

Another 5 million Singapore dollars will be set aside under a separate fund to help tourism businesses expand into new markets and reduce the financial risks of expansion, Fu said.

Singapore is also looking to attract more cruise tourists as disruptions to Middle East airspace and volatile jet fuel prices continue to weigh on air travel.

Disney Adventure, the largest ship in Disney's cruise fleet and the company's first vessel based outside the U.S., began operating from Singapore on March 3.

Singapore is also preparing to open a new cruise and ferry terminal on July 15. The site will feature a VIP lounge and an automated baggage handling system as the country looks to expand a cruise sector that recorded 375 ship calls and more than 2 million passengers in 2025.

Still, Ow said Singapore remained focused on its long-term tourism ambitions.

"Current times are highly uncertain and very volatile," she said. "We're choosing to be more conservative in terms of how we are expecting the year to turn out."

— CNBC's Monica Pitrelli contributed to this report.