APAC destinations gain momentum: Mastercard

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).

In a report released yesterday, titled “Travel Trends 2024: Breaking Boundaries”, data shows that APAC destinations are significantly trending, comprising half of the top 10 hot spots that have demonstrated the greatest momentum among travelers.

According to the MEI, APAC passenger traffic is rebounding, particularly for shorter, intra-regional trips. For example, this summer’s top destinations for travelers from Hong Kong include Bangkok, Okinawa, Fukuoka, Nagoya, Tokyo, Seoul, Manila and Kaohsiung.

“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.”

The Chinese mainland’s travel dynamic has shifted, as more Chinese tourists prioritize domestic trips over international ones.

Yet, 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.

Meanwhile, international tourism traffic leaving the Chinese mainland continues to recover and is now at 80.3% of 2019 levels.

As cited in the report, Japan emerged as the #1 trending destination worldwide growing 0.9%, 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, the report noted.

Meanwhile, Mastercard has noted that tourists today prefer laid-back vibes, except in spots where luxury retail and fine dining provide exceptional value for money.

In Hong Kong, tourism spending on casual dining and fine dining is respectively 248% and 237% higher in the year ending March 2024 than at the same time last year.

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.

The report provides comprehensive insights into the evolving landscape of the travel industry across 74 markets, including 13 in the APAC  region.