Singapore’s core inflation is expected to drop to around 2% by the end of the year and ease further in 2025, according to the latest forecast from the Monetary Authority of Singapore (MAS) in October.
How will this affect travel demand?
MAS noted that the surge in pent-up leisure travel demand has slowed down, which means travel-related prices are unlikely to rise sharply. With global tourism demand and supply stabilising, holiday-related inflation is expected to ease as well.
Recent data shows a strong travel market, with Singaporean travellers taking advantage of a strong Singapore dollar. A Visa survey revealed a surge in bookings through travel agencies in September, and found that travel is now the top spending category for the second half of 2024, with 42% of respondents prioritising it.
However, the high cost of living in Singapore is impacting travel plans and changing consumer behaviour. The same Visa survey showed that only 15 percent of consumers expect income growth next year, well below the Asia Pacific average of 32%.
Research suggests:
Singaporeans are increasingly spending domestically on overseas travel, especially in food and retail.
Even when travelling abroad, many are opting for more affordable destinations.
Malaysian cities are becoming more attractive due to lower costs.
According to Visa’s International Travel platform, the top 10 destinations for Singaporeans in Q2 this year were all in Asia Pacific.
These changes are influencing travel behaviour, with more travellers seeking all-inclusive packages that cover accommodation, meals, and activities, helping them manage costs more easily.
Flexible pricing models are likely to become more popular as travellers look for clear value and ways to reduce financial risks.
Travel agencies that offer customisable itineraries and flexible booking policies will be well-positioned to attract budget-conscious travellers looking to get the most out of their money.
The good news is that international travel remains a priority for many Singaporeans, though they are adjusting their destinations and spending habits.
Travel agents should be ready for these shifts and adapt to the changing needs of their clients as the travel landscape continues to evolve.