The Role of Inbound Tourism in the Singaporean Economy: A Computable General Equilibrium (CGE) Assessment

Abstract

ABSTRACTThis study has employed recently published input–output (I–O) tables and tourism survey data and built a Computable General Equilibrium (CGE) model, to assess the role of inbound tourism in the Singaporean economy and thus to reveal its implications for tourism marketing. Compared with the I–O analysis, the CGE modeling takes into account the feedback effect in the economy and thus produces more reliable results. The modeling results show that inbound tourism contributes significantly to the Singaporean economy, but it competes mildly with non-tourism sectors for resources. Although tourism shopping accounts for about half of total tourism expenditure, its economic contribution is much less than that of the tourism service in terms of GDP, employment, household income, and tax revenue. This suggests that, in developing and marketing Singapore as a tourist destination, more efforts are needed to encourage tourism services demand.