I am delighted to be here today for the announcement of the $200 million Singapore Flyer project. This is a major signal of confidence in the Singapore tourism industry, all the more because it comes at a time of unprecedented challenge for the industry.

Tourism is an important pillar of the Singapore economy going forward. Last year, the industry accounted for 6% of Singapore’s GDP. This industry also employs close to 150,000 people, or about 8% of the Singapore workforce. However the importance of the tourism sector goes beyond its direct contribution to the economy and employment. Tourism has an impact that cuts across many sectors, such as food and beverage, retail, the arts and transport. Bouyant visitor arrivals lead, one way or another, to vibrancy in all these areas. The recent SARS crisis highlighted the many knock-on effects that tourism has on the economy.

The tourism sector is also a good test-bed for entrepreneurs. With exposure to a diverse group of customers, the trade offers a wealth of lessons in concept design, sales, marketing and customer service – useful experience for budding entrepreneurs, in any business they may get into.

There is a further, intangible sense in which tourism makes a difference to the Singapore economy. Tourism contributes to the diversity that makes us a global city. The presence of a wide range of visitors - from across Asia and the West, from backpackers in flip-flops to well-heeled business travellers - is part and parcel of the open, cosmopolitan hub that Singapore is shaping up to be. And the spectrum of increasingly varied attractions and events that we are seeing adds colour and rhythm to Singapore life.

To foster a thriving tourism sector, we are broadening Singapore’s portfolio of tourism offerings. We will ride on new services like education and healthcare. These will give added reasons for people to visit Singapore, opening up new areas of growth for the industry.

While we work on these new, emerging segments, leisure remains the most important component of the tourism sector. Accounting for about half of our tourism receipts, the leisure segment is the bread and butter of the industry at large.

However, revenues generated by the leisure segment have declined - from $5 billion in 1992 to $4 billion in 2002. Tourism receipts in general have likewise fallen - from $9.6 billion to $8.8 billion over the same period.

One reason for this fall in tourism receipts, has been a decline in new investments in leisure attractions, in the second half of the decade.

To arrest the downturn in tourism, we will be vigorous in our pursuit to bring world-class attractions to Singapore. We must be unrelenting in improving the quality and range of our tourism products and services. We have to continually refresh the Singapore experience.

We are going through the most challenging episode the tourism industry has known. Despite these difficult times, we are seeing major new investments. Earlier this month, the Sentosa Development Corporation announced $500 million worth of private investments in tourism projects that will come on stream in Sentosa. [This includes a $120 million five-star destination spa resort, a $50 million beach club and a $300 million theme park that is currently being negotiated]. Together with the Singapore Flyer project, this will bring the level of new tourism investments to almost $700 million in the year to date, compared to the $280 million that we garnered for the whole of last year. It points to a bullish long-term outlook for Singapore’s tourism industry.

Today, the Melchers Group will sign a Memorandum of Understanding (MOU) with the Singapore Tourism Board to seal their partnership in developing the Singapore Flyer.

The Singapore Flyer will be a totally new experience. It will feature the cutting edge in design and technology. It will be a compelling attraction in Asia. When it opens in November 2005, the Singapore Flyer is expected to draw 2.5 million visitors in its first year of operation, including 1 million from overseas. The tourism receipts arising from this project are estimated at $94 million in the first year alone (2006).

The announcement of the Singapore Flyer project comes at a turning point for the tourism industry. Confidence in Singapore as a destination is returning. Based on preliminary data for June, we expect 275,000 visitor arrivals this month, representing an increase of 47% over May. We anticipate sustained growth over the coming months, although it will take time for the industry to recover fully.

We are also encouraged by the pick up in exhibitions and conventions to be held here over the rest of the year. Besides confirmed events such as Global Entrepolis@Singapore, which will attract 4,000 foreign CEOs and entrepreneurs from all over the world, and MTA 2003 where we are expecting 5,000 international participants, a number of other large conventions are in the works and will soon be confirmed. Visitors and Singaporeans can also look forward to a colourful calendar of concerts and festivals over the upcoming months including Ricky Martin’s visit, Bollywood Superstars and Zoukout, to name a few.

In the last few months, we have seen the Singapore travel industry rally together in response to an unprecedented crisis. We will recover. The Singapore Tourism Board will work with our industry partners to keep the momentum, and bring in good growth for years to come. Just like the Singapore Flyer, we will take ourselves to new heights.

I would like to congratulate the development team for the Singapore Flyer and the Singapore Tourism Board for bringing the project forward to this milestone.

We look forward to the addition of this new, unique icon to the Singapore skyline. It will be something to be proud of.

**********************************************************************************

END