SINGAPORE: Singapore's plan to allow quarantine-free travel for fully-vaccinated passengers from India and Indonesia from November 29 can give a major boost to businesses here, but headwinds will come from continued travel restrictions and cost concerns as the travellers still would need a negative test report prior to travel, a media report said here on Wednesday.
Singapore is planning to have Vaccinated Travel Lanes (VTLs) with India and Indonesia, two of the top markets for Singapore's Changi Airport, from November 29 as it hopes to "reclaim and rebuild" the country's status as an international aviation hub with global connectivity, The Straits Times newspaper reported.
However, even as the two VTLs are slated to begin from November 29, the need for polymerase chain reaction (PCR) tests, before flying out and on arrival, could put off cost-conscious travellers, who comprise the bulk of passengers on these routes.
The arrangement with Indonesia is also only one way, letting visitors from that country into Singapore without quarantine while locking travellers from the city-state out.
For those eyeing a trip to India, there are currently no commercial flights between Changi and other airports in India, although both nations are in talks to resume services.
"We are still a long way from pre-pandemic times," CIMB private banking economist Song Seng Wun was quoted as saying by The Straits Times.
"We may still have to wait a little while, with industry experts still forecasting travel to recover only in 2023 and 2024.
"But we must remember that one extra bus of tourists here can have multiplier effects and maybe save businesses. Because of people-to-people ties between Indonesia and India and Singapore, these VTLs are also very important, although the opening of the Causeway link with Malaysia will have a much larger impact," he said.
Walter Theseira, an associate professor at the Singapore University of Social Sciences, said the VTL's impact on tourism will be muted until costs come down.
"The PCR fixed cost would be quite high relative to the plane ticket price, unlike for travel to Europe or the United States. When combined with the limited VTL flights, the total cost of travel is likely to, at least initially, discourage more budget-sensitive travellers.
"Changi's air hub status also depends on transit travel through Changi to other destinations in North Asia, Europe and the Middle East, and North America, as well as intra-ASEAN travel," he said, adding that it will take time for traffic to rebound since, even within Asean, most countries have yet to set up reciprocal VTLs with one another.
Still, India and Indonesia's economic importance for Singapore can only be boosted by the VTLs despite some limitations.
Barnabas Gan, an economist at UOB Bank, noted that even during COVID-19 last year, Indonesia made up 11.6 per cent of Singapore's tourism receipts, while India contributed 6 per cent.
Pre-pandemic, China was the largest contributor with 14.9 per cent.
Arrivals from India and Indonesia will likely provide a "significant" boost to Singapore's hospitality-related industries, such as accommodation, transport, food and beverage as well as retail, he said.
Indians and Indonesians also make up a significant chunk of the workforce here.
Hooi Yu Koh, the chief executive of construction firm Kori Holdings, said that his company employs about 40 Indian workers who have not been home to see their families in the last two years.
Pre-pandemic, they would have flown to India at least once every two years for a month each time.
"When they fly back now, it's like resigning because they cannot come back. We lost some of our workers as they were too homesick," he added.
Maid agencies told the newspaper that the VTLs could help them bring in more domestic helpers, who are in high demand here, especially as people find it difficult to cope with balancing work and home duties amid work-from-home arrangements.
Currently, there are 13 countries, including Canada, Australia and Germany, under Singapore's vaccinated travel lane (VTL) programme, Channel News Asia reported.
Travellers under the VTLs are not subject to stay-home notice on arrival.
Instead, they will be required to produce a negative pre-departure test taken within two days prior to departure and undergo an on-arrival PCR test.
In 2019, India accounted for about 7 per cent of passenger arrivals at the Changi Airport here.