BUDGET TRAVEL : IMPLICATIONS FOR SHOPPING CENTRES IN SINGAPORE

Abstract

Recent developments in the aviation industry saw the proliferation of budget carriers that offer consumers cheaper alternatives for travel. This has led to a strong flow-through effect particularly across Asia Pacific which saw the emergence of several low-cost airlines over the past five years. In Singapore, more locals are now capitalizing on these opportunities to travel within the region for retail and vacation activities. Hence, this dissertation sets out to study the shopping preferences of budget travelers and examines the extent of potential leakage that this recent phenomenon has on our retail industry. The implications that these outflows have on shopping centres in Singapore are also discussed. Through the surveys of 207 budget travelers that visited Bangkok and Hong Kong over the past three years, two distinct profiles were formed from this group. Visitors to Bangkok were found to be going there purely for shopping purposes and are drawn by the cheap prices of merchandize as well as the opportunity to be able to bargain for the prices of their purchases. Those who travel to Hong Kong on budget airlines generally go there as part of their holiday trips and make shopping part of their program. As such, they are a more sophisticated clientele who generally visit the country for the overall shopping experience. They have also indicated that they are prepared to pay more on their travels. Retailers would therefore have to pay attention to the factors that make overseas travel more attractive as this poses major leakage to their income. Recommendations at the end of this paper serve to address these concerns.