Singaporeans Set To Spend RM3.5 Billion More In Johor Bahru Every Year

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The Johor Bahru-Singapore Rapid Transit System (RTS) Link promises to make travelling across the Causeway faster and more convenient

However, Singaporean businesses fear that greater convenience could also encourage even more Singaporeans to shop and dine across the border instead.

A new study jointly commissioned by the Singapore Business Federation (SBF), Restaurant Association of Singapore (RAS), and Singapore Retailers Association (SRA) projects that Singapore consumers will spend an additional SGD1.05 billion (around RM3.5 billion) annually in Johor Bahru after the RTS Link begins operations.

While visitors from Johor are also expected to spend more in Singapore, bringing in an estimated SGD756 million (around RM2.5 billion) in extra annual spending, it would still leave Singapore with a net spending outflow of about SGD290 million (around RM915 million) every year.

RTS could lead to millions more cross-border trips every year

According to the study, which was published today, 16 July, Singapore residents currently make around 19.4 million annual round trips to Johor Bahru using existing transport options, while JB residents make about 5.9 million trips into Singapore.

Once the RTS Link is operational, researchers expect:

• 11.2 million additional annual round trips from Singapore to JB
• 3.3 million additional annual round trips from JB to Singapore
• An average daily ridership of almost 40,000 trips

The report projects outbound trips by Singaporeans could jump by 51%, with groceries expected to account for the biggest share of spending in Johor, followed by pharmacies, restaurants, and beauty services as consumers continue seeking better value across the border.

But Singapore also expects more Malaysian visitors

The study says improved rail connectivity could encourage more Johor residents to visit Singapore for experiences they cannot easily get at home.

Among JB respondents surveyed:

• 34% said they intend to visit Singapore for events after the RTS opens, compared with 24% currently
• Public transport users are expected to increase their annual Singapore trips by 57% on average
• Many motorists said they would switch to the RTS Link, with overnight stays becoming more common

Researchers also expect recreation spending by Malaysian visitors to double, driven largely by concerts, major events and entertainment offerings.

Singapore businesses say they can't compete on price

Despite the expected influx of Malaysian visitors, businesses participating in focus group discussions admitted that matching Johor's lower prices simply isn't realistic.

Instead, retailers and F&B operators believe Singapore needs to focus on:

• Better customer service
• Unique shopping and dining experiences
• Products and concepts that cannot easily be found across the border

Many businesses, particularly SMEs, also said rising labour costs, manpower shortages, and compliance requirements make it harder to innovate or respond quickly to increased competition.

Industry groups want government support

The study outlines three key priorities to help businesses adapt once the RTS Link opens:

• Introduce measures to encourage Singaporeans to spend more locally, including expanding or enhancing consumption voucher schemes
• Attract RTS passengers to stay longer and spend more through events, entertainment and tourism offerings
• Help retail and F&B businesses cope with higher competition through manpower support, lower operating costs and greater flexibility

Among the recommendations are extending tourist tax refunds to travellers leaving Singapore via land checkpoints, creating more cross-border promotions between Singapore and Johor, investing in more large-scale events outside the city centre, and providing temporary manpower and rental support for affected businesses.

Singapore Business Federation CEO Kok Ping Soon described the RTS Link as a "structural" change rather than an incremental one, saying businesses will need to compete on quality, experiences, and productivity instead of price alone.