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<News Analysis> Singapore to open VTLs with five other countries, including India and Indonesia

  • Singapore announced on 15-November that VTLs with Indonesia and India will begin from 29-November.
  • Additionally, VTLs with Qatar, UAE and Saudi Arabia will start from 6-December.
  • This will bring the total tally of VTLs to 21 by 6-December from 16 currently. 
  • This is markedly ahead of our expectations, we had initially expected Singapore to extend VTLs to Indonesia and India in 2H22. 
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What’s new?

  • Quarantine-free travel for travellers from India and Indonesia will begin from 29-November, and start for travellers from Qatar, UAE and Saudi Arabia by 6-December.
  • Note Indonesia has yet to permit quarantine-free travel from Singapore, but this could soon change.
  • The daily quota of arrivals via the VTL scheme will increase to 10,000 from 6,000 currently, accounting for around 13-14% of total passenger traffic at Changi Airport prior to COVID-19.
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Our thoughts

  • This is certainly a surprise to us as we had only anticipated VTLs to be extended to India and Indonesia in 2H22, given the relatively low vaccination rates in the two countries.
  • As highlighted previously, travellers from the 16 existing VTL countries accounted for around 29.2% of total tourist arrivals in 2019, and this figure will increase to around 53% with the addition of Indonesia (16.3%) and India (7.4%).
  • If VTLs were to be extended to the Greater China market in 1H22 (our base case), Singapore could be more than 75% ‘reopen’ by June-22.
  • While we now expect more tourist arrivals than before, inbound tourism will still be relatively soft over the next quarter or so, given the quotas on daily arrivals from VTL countries.
  • Nonetheless, we remain hopeful that the quotas will be revised soon after there is further evidence that the VTLs lead to minimal imported cases.
  • ST Engineering and Genting Singapore are our preferred picks; we are also optimistic on SATS Ltd.