Skift Take

It’s time for Singapore — and others taking a more step-by-step approach to reopening — to show a little more boldness on travel.  Stop "picking winners" and skewing the market.

Series: Viewpoint

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Vaccinated Travel Lanes (VTLs) are in the news again in Singapore with the launch of two new lanes to Switzerland and Australia. This brings Singapore to 13 VTLs, 11 open to all, (Canada, Denmark, Germany, France, Italy, Netherlands, Republic of Korea, Spain, Switzerland, UK, and the USA) and two more just currently for citizens of those countries (Australia and Brunei).

For those that haven’t heard of a VTL, they are a uniquely Singaporean approach to reopening global travel post-Covid.  While other countries have broadly reopened travel without quarantine, or at least reopened to a specific set of origin countries, Singapore’s VTL requires you to enter on a specific airline and a specific flight to avoid quarantine.

As any student of basic economics knows, creating such a false limit on supply will drive up prices, and generally force the market to allocate resources in an inefficient manner. Not only does this approach cut out any option to connect through other markets, (historically the cheapest way from Europe to Singapore was to connect through the Middle-East hubs), but it also drives prices up on the specific direct VTL flights, making travel without quarantine the preserve of the rich.

Looking for example at London-to-Singapore direct flights on Singapore Airlines over the next few months, the price is typically around S$500. But as you get nearer to the busier Christmas period, and in particular right after Christmas, you can see that the one designated VTL flight (SQ317) spikes to around S$1,300, while the cheapest other non-VTL SQ flights (SQ305 or SQ319) generally remain at S$500. By arbitrarily limiting supply, a more than S$800 premium is being extracted to avoid the 7 day home quarantine that the non-VTL flights require.

From a public health perspective, there is no meaningful difference between the cheaper non-VTL and more expensive VTL flight. Both are direct from Singapore to London, and both require pre-flight PCR testing (even for transit passengers). The non-VTL flight could have a non-vaccinated passenger on it, but non-vaccinated children are also allowed on the VTL flight; and all would have taken a PCR test.

By creating a false constraint on the VTL, Singapore is making travel unaffordable for many.

This ties into a broader set of “cautious and step-by-step” moves that Singapore is making to reopen its travel market.  However this is coming at the cost of leaving Singapore behind as the rest of the world accelerates their reopenings.  Europe and the US have broadly reopened to almost any international vaccinated traveller.  Even in SE Asia, other markets are quickly passing Singapore by. Thailand has announced two schemes starting Nov 1st, opening the entire country to vaccinated travellers from 46 origin markets without any quarantine; and a further scheme for select destinations, with some extra testing requirements, for vaccinated travellers from all other countries beyond the 46.  

This cautious approach is seeing Singapore plunge to 39th of 53 rated countries in the most recent Bloomberg Covid Resilience Ranking.  Some of this decline is driven by the recent spread of Covid as it transitions to a “living with Covid” approach in a generally Covid-naive population.  But where Singapore is a true outlier is in its restrictive travel policies, falling in the bottom 5th percentile of countries in their reopening of airline capacity.

With only 5 Covid cases out of more than 5,000 current VTL entries (0.1%); and with total imported cases in Singapore representing less than 0.2% of all local cases, moving to a more unrestricted stance on travel would not drive meaningful incremental strain on the country’s healthcare system. 

It’s time for Singapore to show a little more boldness on travel. Stop “picking winners” and skewing the market. As a simple step, make all direct flights between an origin and Singapore qualify as VTL flights, to make travel accessible for more, at a more reasonable price. Then quickly follow this with a broad expansion of countries that qualify for this quarantine-free approach, relying on vaccination and testing to get Singaporean travel moving again.

Dan Lynn is the co-founder of ZUZU Hospitality, the revenue platform for independent hotels, and has been based in Singapore since mid-2000s.

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Tags: singapore

Photo credit: Aerial view of an airplane arriving to Singapore airport.

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