atans1

Haze: Economy will slow

In Economy, Indonesia on 22/06/2013 at 10:35 am

Businesses and analysts have warned that the longer the problem persists, the higher the cost will be for the overall economy.

“Tourism-related sectors such as retails sales, hotels, food and beverage, and gaming, these will take a hit,” Joey Wong of Barclays told the BBC.

Tourism is a big revenue earner for Singapore and according to some estimates industries related to the sector account for between 5% and 6% of Singapore’s total economic output.

The last time the city-state was hit by such bad haze in 1997, tourist arrivals dropped by nearly 15% in a month.

According to a report by Barclays, there are indications that some tourists have already started to cut short their stay in Singapore and some have even cancelled their bookings.

Ms Wong said while it was too early to estimate the overall impact of the haze on the industry, the cost for the sector could be between $200m – $400m (£130m – £260m) if there was an 8% to 10% drop in arrivals.

However, she added that any drop would be temporary and the arrivals will pick up once the conditions improved.

Bad timing?

While a situation like the current one is never good for businesses, it is even worse if it happens during the peak annual period.

That is position that Singapore’s retailers find themselves in. The haze has hit during the annual “Great Singapore Sale”, one of the busiest shopping periods of the year … Singapore Retail Association, says that retailers are already experiencing a marked decline in traffic and sales are down by between 8% to 12%.

“If this continues, the industry – which is already faced with very high cost of operations – would certainly be badly hit and retailers, who are already struggling to hold on to their very slim margins, will see this being eroded further,” said Ms Wei.

http://www.bbc.co.uk/news/business-22999205

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