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Japan tops the trending list, welcoming a record-breaking 3M+ international arrivals in March
While outbound travel from the Chinese Mainland continues to recover, now at 80% of 2019 levels, more Indians are traveling than at any time in history
Travelers to APAC are vacationing longer while prioritizing experiences over purchases
Singapore -The global travel sector is breaking boundaries in 2024 as consumer spending on tourism remains robust and passenger traffic soars, according to the latest report from the Mastercard Economics Institute (MEI). Released today, the MEI’s fifth annual report, “Travel Trends 2024: Breaking Boundaries” provides comprehensive insights into the evolving landscape of the travel industry across 74 markets, including 13[1] in the Asia Pacific region (APAC).
Despite fluctuating exchange rates and varying levels of affordability, travel is booming, with nine out of the last 10 record-setting spending days in the global cruise and airline industries occurring this year[2]. Looking ahead, the MEI anticipates this momentum will continue as consumers around the world prioritize meaningful experiences and allocate more of their budgets to travel.
Drawing on a unique analysis of aggregated and anonymized Mastercard transaction data, including Mastercard SpendingPulse™ and third-party data sources, the report takes a deep dive into key tourism trends for 2024 and beyond. Here in the Asia Pacific region, a few themes stand out, including:
APAC destinations are trending in a big way, comprising half of the top 10 hot spots that have demonstrated the greatest momentum among travelers. This is measured and ranked by the change in share of tourism transactions over the past 12 months ending March 2024.
Japan emerged as the #1trending destination worldwide (growing 0.9% vs Ireland at 0.4%), as it welcomed 3,081,600 visitors from abroad in March 2024 – the highest level ever – even before the peak travel season begins. Driven by a weak yen (the lowest since 1990), Japan’s favorable exchange rate is expected to help it remain the clear tourism frontrunner throughout 2024, benefitting Japanese businesses catering to tourists and the local economy overall.
APAC passenger traffic is rebounding, particularly for shorter, intra-regional trips. For example, this summer’s top destinations for travelers from Singapore include Bangkok, Kuala Lumpur, and Perth.
Thailand tourism is expected to fully recover in 2024, according to MEI, with total visitor arrivals now only 7% below 2019, pre-pandemic levels[3]. Notably, inbound flight traffic from South Asia and the ASEAN region is nearly 20% above 2019 levels
“Consumers in the Asia Pacific region have an intense desire and willingness to travel and are becoming increasingly savvy to ensure they get the best value and unforgettable experiences from their trips,” said David Mann, chief economist, Asia Pacific, Mastercard. “For tourism authorities, retailers, the hospitality and F&B sectors, the bottom line is that costs matter. In today’s economy, foreign exchange rates and spending power have become vital components in driving a traveler’s assessment of value when they are making their plans. This suggests that businesses targeting tourism dollars need to review their current strategies, and shift them if necessary, to maintain their appeal to travelers.”
Summer holiday hot spots (June-Aug 2024[4])
While Japan was the top trending destination during the last 12 months[5], looking ahead, Munich ranks as the #1 summer destination (in terms of share gain in flight bookings) due to its hosting of the UEFA EURO 2024 football championship in June. Tokyo comes in a close second while Bali (#6) and Bangkok (#7) are also among the top 10 cities where demand is gaining momentum in the next three months.
Chinese Mainland Domestic Tourism Rebounds While Outbound Travel Continues to Recover
The Chinese Mainland’s travel dynamic has shifted, as more Chinese tourists prioritize domestic trips over international ones.
The Chinese Mainland’s domestic tourism story is a positive one, as air passenger traffic has fully normalized and even exceeded 2019 levels, benefiting local businesses.
Meanwhile, international tourism traffic leaving the Chinese Mainland continues to recover and is now at 80.3% of 2019 levels.
Additional upside growth is expected in 2024, supported by visa exemptions in APAC and beyond, as well as an increase in international flight capacity, benefiting destinations such as Singapore, Malaysia and Thailand.
More Indians are Traveling Than Ever Before
Strengthened by a burgeoning middle class, additional route capacity, and a strong desire to travel, 2024 marks the year when more Indians are traveling internationally than at any time in history.
In the first three months of 2024, 97 million passengers traveled through Indian airports. Just 10 years ago, the same figure would have taken a whole year to achieve.
Domestic passenger traffic is up 21% compared to 2019 levels while international passenger traffic is up 4%, as of March 2024.
Indian travelers to key markets are up significantly in 2024 compared to 2019: 53% increase in visitors to Japan, 248% increase to Vietnam, 59% increase to the United States (notable as total overseas arrivals to the U.S. are still 7% below 2019 levels, largely due to the strong USD).
Leisure for Longer
In APAC (excluding ANZ) in 2024, tourists are extending their trips by an average of 2 days to a total duration of 7.4 days, motivated by the affordability of destinations, warm weather, and favorable exchange rates. This compares to the 2019 average of 6.1 days per trip.
In Australia and New Zealand (ANZ), overseas visitors are staying for an average of 5.4 days, an increase of 0.6 days compared to 2019.
The APAC destinations with the longest increase in trip duration between 2019-2024 are India (+2 days), Vietnam (+2 days), Indonesia (+1.9 days), and Japan (+1.4 days), largely due to their lower growth in hotel prices during this period compared to other markets.
Longer stays generally translate to more spend per trip too, which benefits local economies.
Thrill Seekers Want Experiences and Nightlife
Consumers globally continue to prioritize experiences over material goods. This is playing out in the travel sector as spending on experiences and nightlife totals 12% of tourism sales – the highest point in at least five years. Meanwhile, retail shopping is recovering at a slower pace.
Australian tourists are the highest spenders globally on experiences and nightlife.
In 2024, Aussies are spending one of every five dollars (19%) on these activities – significantly higher than the global average (12%).
Tourists from the Chinese Mainland are also increasingly seeking out experiences, spending 10% on this category in 2024, up from 7% in 2023.
Casual Trumps Luxury for Fashion and Food
Tourists today prefer laid-back vibes, except in spots where luxury retail and fine dining provide exceptional value for money.
Notably, luxury fashion sales soared YoY in the year ending March 2024 in Japan (152%) and Hong Kong SAR (208%), despite casual fashion still leading the pack in most places.
Hong Kong SAR’s surge is partly attributed to its late reopening in 2023, whereas Japan’s boom stems from a weak yen and robust inbound tourism.
Australia, India, and Thailand now enjoy burgeoning fine dining scenes, leading to premium dining outperformance compared to casual dining, which remains dominant elsewhere.
“Amidst the evolving tourism landscape and continuing surge in travel throughout 2024, the Mastercard Economics Institute aids businesses and policymakers in translating macroeconomic forces and data insights into actionable strategies at the country, category, and company levels, in addition to counseling on possible scenarios and the implications they have on demand,” added Mann.
Explore the full Travel 2024: Breaking Boundaries report here.
Source : https://www.pata.org/
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