SINGAPORE, July 16 — Singapore residents are expected to spend an additional S$1.05 billion (RM3.31 billion) annually in Johor Bahru after the Johor Bahru-Singapore Rapid Transit System (RTS) Link begins operations in 2027, a study found.

The study, commissioned by the Singapore Business Federation, Restaurant Association of Singapore and Singapore Retailers Association, was reported by CNA and examined the RTS Link’s potential impact on consumer spending, tourism flows and competition between businesses on both sides of the border.

The projected increase in Singapore-to-Johor Bahru spending is expected to exceed the additional S$756 million that Johor Bahru visitors are forecast to spend in Singapore each year.

This would leave Singapore with a net outbound spending increase of about S$290 million annually, equivalent to 0.4 per cent of the country’s total retail and food and beverage sales in 2025.

The study also projected that trips by Singapore consumers to Johor Bahru would rise by 51 per cent, adding 11.2 million return journeys a year, while trips from Johor Bahru to Singapore could increase by 3.3 million.

The findings were based on a survey of about 1,700 Singapore consumers and 400 Johor Bahru consumers conducted in March, alongside historical credit card spending data and government statistics.

Groceries are expected to make up the largest share of Singapore’s outbound spending after the RTS Link opens, followed by purchases at drug stores, dining outlets and beauty services.

Singapore Business Federation chief executive officer Kok Ping Soon said the rail link would create opportunities for local businesses to attract more visitors but would also increase competitive pressure, particularly in retail and food and beverage sectors.

“Businesses must adapt beyond price competition by strengthening their offerings, experiences and productivity, while industry and government must work together to help them compete in a more connected cross-border market,” he said.

He said many businesses were already facing challenges from manpower shortages, rental expenses and rising operating costs, with the RTS Link adding another layer of structural pressure.

Businesses surveyed for the study said competition from Johor Bahru would intensify, especially in price-sensitive areas such as groceries, pharmaceuticals and beauty services, where cross-border shopping is already common.

Non-central areas of Singapore are expected to experience the largest spending outflows, with the west region projected to see a S$104 million net decline, followed by the north-east at S$103 million, the north at S$82 million and the east at S$25 million.

The study found central areas, however, could benefit from increased spending by Johor Bahru visitors, with an estimated S$25 million boost from premium retail, entertainment, hotels and dining.

It added that businesses would need to focus on service quality, unique experiences and distinctive offerings rather than competing solely on prices.

Small and medium-sized enterprises were among those concerned about adapting quickly enough to increased cross-border competition and called for more support to strengthen their competitiveness.

Despite the expected rise in Singaporeans travelling to Johor Bahru, the study found Johor Bahru residents were increasingly interested in visiting Singapore for premium shopping, entertainment and major lifestyle events.

About 34 per cent of Johor Bahru respondents said they intended to visit Singapore for events after the RTS Link opens, compared with 24 per cent currently.

The study identified three priority areas for action: encouraging local spending, increasing tourist spending through stronger experiences and events, and helping businesses adapt to changing market conditions.

The RTS Link, connecting Bukit Chagar in Johor Bahru and Woodlands North in Singapore, is scheduled to open in January 2027.