1.
Mr Speaker, the Prime
Minister has explained clearly why the Government has decided to proceed with two
Integrated Resorts, or IRs, after serious deliberation. I wish to elaborate on the tourism and economic
considerations.
2.
Tourism has
always been an important sector for the Singapore economy and not simply for the
tourism receipts that visitors generate.
The more attractive we are as a tourism destination, the easier it is for
us to develop our convention and exhibition industry, and grow as an aviation
hub.
3. However,
our tourism sector has faced major challenges over the past decade. Our total arrivals and tourism receipts have
declined. Between 1993 and 2002, visitor arrivals stayed relatively stagnant at
about 6.5 to 7.5 million visitors. Over
the same period, tourism receipts fell by 17%, from S$11.3 billion to S$9.4
billion. The tourism sector has not been
keeping up with the growth in the rest of the economy and consequently tourism’s
contribution to our GDP was reduced by half, from 6.1% in 1993 to 3% in 2002.
4. These
developments did not take place because the prospects for tourism in the region
had dimmed. On the contrary, tourism
traffic grew strongly in the Asia Pacific, at about 6.4% each year. With our tourism earnings falling at a time
when the regional tourism market is expanding, this means that our slice of the
tourism pie is getting smaller. Singapore’s
share of the Asia-Pacific tourism receipts fell sharply, from 13.1% in 1993 to
6% in 2002.
5. How do we explain this? One
key reason is that we have not been investing sufficiently in quality tourism
products. Remember, we start off with a handicap.
We cannot boast breathtaking scenery or spectacular wildlife. Being a young nation, we do not have
historical relics or world heritage sites. We do not even enjoy seasonal
variation that gives rise to specialty attractions like the sakura in Japan,
the foliage of New England or the ice sculptures of Harbin. Under such
conditions, having compelling man-made tourism products becomes vital in
attracting visitors.
6. Apart
from a number of sizeable investments in cultural attractions such as the
Esplanade and the museums, we have not made major investments in tourism
attractions over the past decade. The last significant investment in a tourist
attraction was really the Night Safari in 1994. Moreover, several tourism
investments made in the early 1990s turned out unsuccessful, like the Haw Par
Villa, Tang Dynasty, Asian Village and Fantasy Island.
7. At the
same time, our competitors are not standing
still. Many cities have been aggressively investing in new tourism products to
attract visitors. Some of our innovative “success formulas” are being copied.
For example, Night Zoos can now be found in Guangdong, Sichuan, Malacca and
Cairns, with another soon to open in Chiangmai. The Underwater World in Sentosa
was novel when it first opened in 1991, but such aquariums now exist in many
cities. Some are bigger than ours.
8. Other
destinations are coming up with ever bigger and bolder plans to “wow” tourists.
Hong Kong’s Disneyland is due to open later
this year. Dubai is having its own
version called “Dubailand” - a comprehensive tourism, leisure and entertainment
city.
9. We have
been successful so far as a convention city but others are catching up. Kuala Lumpur and Bangkok aspire to be
successful convention cities. Macau has reclaimed land for the COTAI Strip
where a total of 10,000 hotel rooms are planned for Phase 1 development.
Venetian Macau, the centrepiece of the COTAI Strip, will have 1 million sq ft
of convention and exhibition space, a 2000 seat theatre, and a 15000 seat
arena. Macau will also be a major Meetings,
Incentives, Conventions and Exhibitions (MICE) competitor to Singapore once the
COTAI development is operational in 2007.
So, to keep ahead, we
cannot afford to make merely incremental improvements.
10. Clear
trends are emerging in the global tourism industry. Forecasts by the World
Tourism Organisation showed that the number of tourists from this region will
double by 2015. This is fuelled by the growth of the middle class in China and
India, as well as the falling costs of air travel.
11. Opportunity
is knocking on our door. We can take full advantage of this opportunity, but
only if we are prepared to act boldly. It is in this context that the
Government decided to proceed with the two IRs.
12. I must emphasise that the two IRs are by no means our only
response to the challenges we face in growing the tourism sector. The Singapore
Tourism Board has been hard at work, attracting other investments in the
tourism sector. It is also leading efforts to revitalise the Singapore River
and Orchard Road. Having an IR, therefore, will complement our many efforts to
remake Singapore as a tourist destination.
13. It is
worthwhile, at this juncture, to paint once again the picture of the sort of Integrated
Resort that Government is considering. In the course of the nation-wide debate
on the IR, it became clear at times that people were talking at cross-purposes
because they had different mental pictures of the IR. Many drew conclusions
based on their personal experiences at the old Macau, Genting, Batam, Australia,
or just on the cruises to nowhere.
14. Let me be
clear. The Government is not interested in a stand-alone gambling hall that
offers only table games and slot machines. In fact, if we were building just a
gambling hall, we would not attract large numbers of tourists. Tourists would
not fly many hours to visit a casino that can be found nearer their homes. So
what would make tourists come to Singapore?
15. If you look at casinos developments around
the world, you would find that they form an entire spectrum. At one end of the spectrum, you would find
the exclusive gambling clubs in London or the exclusive casinos in Monaco. Next in the spectrum would be casinos
situated in hotels like in South Korea.
Then you have stand-alone casinos like those in old Macau. They can be more upmarket or downmarket. Next, in the spectrum, some operators would
include some entertainment elements in their casino, facilities like on cruise
ships, Genting, Perth or Melbourne. At
this end of the spectrum, you would find large scale entertainment developments
with a small gaming component in it, like some of the recent developments in
Las Vegas. This is what an IR is all
about.
16. The Integrated Resort that we envisage in Singapore is a
large-scale development offering multiple world-class attractions. We are not talking
about one or two hotels of several hundred rooms with a casino attached. We are
talking about an entire complex of classy hotels, luxury shops, fancy
restaurants, spectacular shows, convention centres all found in one single
destination. The gaming component will occupy not more than 3 - 5% of the total area of the IR
development. Visitors are drawn to the resort not because of gambling, but because
it offers a wide range of world-class leisure and entertainment choices, with
something for everyone. Casino gaming is an important part of the mix, but only
a part. Examples of overseas IRs that we are looking for include the Bellagio
and Venetian in Las Vegas, as well as the Atlantis in Bahamas.
17. More
importantly, we are looking for IR operators with the ‘software” to market the
resort extensively and transform the world’s view of Singapore as a tourist
destination. This involves high-end, innovative marketing and distribution that
secures international primetime media coverage, and access to an exclusive
network of top artists and performers. The best IR operators can secure
world-famous celebrities to grace their resort, and persuade TV executives and
filmmakers to use their resort as a backdrop. This maximises the global
exposure of the destination and ensures that it is one of the first things that
come to people’s minds when they plan a vacation. This kind of marketing
ability will greatly boost our own efforts at branding Singapore, such that it
becomes widely recognised as a leading city in the Asia-Pacific, the way New
York, Paris and London, are regarded as
leading cities in the West.
18. As
the Prime Minister explains, we received a total of 19 submissions when we
conducted a Request for Concepts (RFC) to test the viability of an IR in Singapore.
This showed there is serious interest from world class companies. Many of these
companies have extensive and impressive track records for developing, managing
and marketing successful world-renowned Integrated Resorts.
19. We
also learnt from the RFC exercise that the economic benefits from this project
are substantial. The proposals envisage investments in the order of $5 billion for
2 IRs, generating direct employment of more than 10,000 jobs.
20. Critics
may point out that Singapore is also capable of landing investment projects of
this order of magnitude in the other sectors, such as manufacturing. This is
true. But, as I had earlier described, success in tourism will stimulate many
other sectors of our economy. The IR will help to revitalise our tourism sector
and enhance our appeal in hosting conventions and exhibitions, and strengthen
our status as an aviation hub. This is why the economy-wide
impact of two IRs, taking into account direct and indirect effects, is huge.
With the two IRs, the incremental annual GDP is estimated to exceed $1.5
billion and total incremental employment is about 35,000 jobs.
21. In
addition, our analysis suggests that the consequent growth in the tourism pie
would be more than what the Integrated Resort alone could absorb. Therefore,
overall, there will be a net positive benefit for existing players, with
spin-offs for the whole tourism industry and the overall
economy. This addresses concerns that the Integrated Resort would
negatively impact on existing businesses.
22. Some of
the prospective investors have released elements of their proposals to the
media. Architects like Daniel Libeskind; museums like the Guggenheim; theme
park operators like Universal Studios. I am not at liberty to divulge what is
not already in the public domain so as to safeguard the proposers’ competitive
and intellectual property interests. But
I can say that what the
prospective investors have not divulged are as impressive and exciting as those
elements which they have made public.
23. Another reason
why Singaporeans may find it hard to imagine the impact that an IR would create
has to do with scale. Let me illustrate with an example. If I were to say that
one of the attractions in the IR could include an aquarium, the average man in
the street might think of the seawater aquarium in the basement of Wisma Atria,
or the Underwater World in Sentosa, and think, well, that doesn’t sound so
extraordinary. But what if I said the aquarium will be large enough for a whale
to freely swim around? That gives you an idea of the scale of projects that we
are looking at.
24. Scale, innovation
and top-class creative talent are key to the IR’s appeal. These are the
elements that will produce a “distinctive and lasting visitor experience”. What
exactly does this phrase entail? It doesn’t just mean having a good time for a
couple of days. It doesn’t just mean building something that is hip, chic, cool
or happening. It means keeping millions of individuals, groups and families
entertained, excited and intrigued. It means creating happy memories that
people will cherish and share enthusiastically with all their friends and
relatives. It means people will actually regret it if they cannot make it to
Singapore.
25. I am confident
that among the concepts that have been proposed to us are projects that are capable
of creating this “distinctive and lasting visitor experience” for all those who
visit us.
26. During
the course of the debate on the pros and cons of having an IR, some people have
asked me, “Why can’t we have the IR without the casino?” If investors are
willing to develop a similar entertainment product without a casino on their
own, we warmly welcome these investments. But in reality, none of them have
done so because these large-scale projects are not viable without a casino or
some form of government funding. For
example, out of the total project cost of S$5.8 billion for Disneyworld, the
Hong Kong government is committing a total of S$4.8 billion[1].
This is unlike the Integrated Resorts that we are attracting which will be entirely
driven by private sector funding.
27. We should
not be surprised by this finding. If indeed it is true that non-gaming
amenities are viable on their own, savvy investors would have jumped on this
opportunity already. They could trigger any site on URA’s reserve list, or
approach the URA or Sentosa Development Corporation directly, but none have
done so. Even for the RFC exercise whereby investors were not required to
include a casino, none of the submissions came without the gaming component.
28. This is
because the casino is the economic engine that generates the bulk of the
profits for the resort. The higher profits from gaming are used to offset the
lower profits of the non-gaming attractions, which are vital to drawing large
numbers of visitors to the resort. This will in turn feed traffic to the casino
and generate gaming profits. It is this symbiotic relationship between the
gaming and non-gaming components that keeps the Integrated Resort viable
independently.
29. Today, we
face a small window of opportunity. Only recently have top IR operators started
looking at expanding their operations to Asia because their own home markets
have matured. Just a few years ago, we would not have garnered the same level
of interest from them even if we were prepared to consider establishing an IR.
Now, Singapore could be an early-mover in the region to develop an iconic,
world-class Integrated Resort.
30. With this
decision, we can now move to the next stage and launch a Request for Proposals
(RFP) in the 2nd quarter of 2005.
The RFP would close in the 3rd quarter and we would award by
the end of 2005. This would mean that
the Integrated Resorts will be operational around 2009.
31. We have
seen that the economic benefits of the IRs are considerable. While there are
valid concerns about the social impact of casino gaming, the Government is
prepared and committed to put in measures and resources to control and mitigate
it. This leaves us still with one important consideration.
32. A
sentiment voiced directly or indirectly by a large number of Singaporeans goes
beyond the social ills of gambling. They are concerned that a casino would
change the tone of society that we have so carefully nurtured over the years.
33. I am sure
we will debate this point thoroughly over the next few days. I can only say
that if the Integrated Resort would put the future of Singapore as a safe, wholesome
society at grave risk, then we would not have supported it. The Swiss Minister for Economic Affairs was in Singapore 2
weeks ago. Switzerland allowed casinos 5 years ago. The Swiss Minister told me
they decided to allow casinos because casinos were already freely available
across their frontiers. They decided they cannot stay put. I think we are in a
similar position. We cannot stand still either. Has the reputation of
Switzerland as a trusted financial centre, a land of hardworking people, or a wholesome
society suffered as a result of having casinos? The answer is no. So, I am
confident that with adequate safeguards, we too can preserve our societal
values with the integrated resorts.
34. Mr
Speaker, Sir, The Integrated
Resort is neither the panacea to all our economic challenges nor will it
destroy our social and moral fabric, or the strong foundations on which
Singapore is built. We have to adopt a holistic and realistic perspective, look
at all relevant facts, make sure the economic benefits are real and not fluff, and
put in place the necessary measures to contain the downside social impact. This
pragmatic approach has served Singapore well in the past, and we should
approach the Integrated Resort in the
same manner.
35. The
Integrated Resort is one of the many strategies that Singapore is pursuing to
boost its tourism appeal and generate economic growth. Whilst it is not the
only strategy in our tourism masterplan, the two resorts will serve as the
engine of our leisure sector and bring in significant and wide-scale benefits
for Singapore. We should move boldly and swiftly, and seize this opportunity to
entrench our hub status, before it is too late.
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