• Travel restrictions in Asia are progressively easing and we expect more countries to open up in 2022
  • Singapore’s inbound tourism may remain soft until domestic health protocols are loosened; pent-up travel demand will drive outbound tourism
  • Positive developments on antiviral pills could accelerate a turnaround in travel activity ahead of our expectations, providing a further catalyst
  • Anticipate more upside for travel-related stocks like STE, GENS and SATS; remain neutral on SIA

Greater clarity on the resumption of travel. We are turning more optimistic on travel-related plays, given greater visibility on Singapore’s reopening course and the restoration of connectivity in the region. In just the past two months, many countries in the region have started or shared roadmaps to reopen their borders. Singapore is leading the way, having established vaccinated travel lanes (VTLs) with 16 countries as of early-November.

Recovery over the next two quarters will be bumpy, but look ahead to 2HFY22. Travellers from the existing 16 VTL countries comprised about 30% of total tourist arrivals in 2019, and we expect this figure to jump to 60% by June-22 and surpass 90% by Dec-22. Inbound tourism will likely be muted at the onset, given that the comparatively high degree of safe management measures in Singapore. However, domestic health protocols should ease over the next few months if domestic incidence rate trends lower and will eventually be drastically streamlined as Singapore moves towards a ‘endemic living with COVID’ . Contrarily, we expect robust outbound traffic given significant desire to travel among Singaporeans.


ST Engineering (STE) and Genting Singapore (GENS) are our top picks. The imminent addition of more countries to the VTL scheme, and continued relaxation of travel restrictions in the region are winds to the sails for the “reopening trade”. Moreover, remarkable development on COVID-19 oral antivirals could lead to positive surprises going forward. We are most bullish on STE and GENS at this juncture, given that they are primed for strong earnings rebound in 2H22 and cheap valuations. We also favour SATS Ltd, but remain on the sidelines for Singapore Airlines (SIA), whose longer term prospects are already priced in, in our view.