The travel industry is reaching new heights in 2024, with tourism spending and passenger traffic skyrocketing, as revealed in the latest Mastercard Economics Institute (MEI) report. The fifth annual report, “Travel Trends 2024: Breaking Boundaries,” explores the dynamic travel landscape across 74 markets, including 13 in the Asia Pacific region (APAC).
Record-Breaking Travel Trends
Despite varying exchange rates and affordability challenges, the travel industry is booming. Nine of the last ten record-setting days in global cruise and airline spending have occurred this year. The MEI predicts this trend will continue as consumers prioritize meaningful experiences, allocating more of their budgets to travel.
Key Insights from MEI’s Data
The report draws on Mastercard’s aggregated and anonymized transaction data, including Mastercard SpendingPulse™ and third-party sources, offering a deep dive into 2024’s tourism trends. Notable themes in APAC include:
- Trending APAC Destinations: APAC accounts for half of the top ten travel hot spots, ranked by the increase in tourism transactions over the past year.
- Japan Leads the Way: Japan is the top trending destination globally, with a 0.9% increase in tourism transactions compared to Ireland’s 0.4%. In March 2024, Japan welcomed 3,081,600 international visitors, the highest ever recorded, driven by a favorable exchange rate and a weak yen.
- Rising APAC Passenger Traffic: Intra-regional travel is rebounding, with top summer destinations for Singapore travelers including Bangkok, Kuala Lumpur, and Perth.
- Thailand’s Tourism Recovery: Thailand’s tourism is expected to fully recover in 2024, with visitor arrivals now only 7% below pre-pandemic levels. Inbound flight traffic from South Asia and ASEAN 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 Hot Spots and Global Trends
Looking ahead, Munich is set to be the top summer destination due to the UEFA EURO 2024 football championship. Tokyo, Bali, and Bangkok also rank among the top ten cities gaining momentum.
Chinese Mainland Travel Dynamics
- Domestic Tourism Surge: Domestic air passenger traffic in the Chinese Mainland has fully normalized, surpassing 2019 levels and benefiting local businesses.
- International Travel Recovery: Outbound travel is at 80.3% of 2019 levels, with growth expected to continue, supported by visa exemptions and increased international flight capacity.
Indian Travel Boom
A growing middle class, increased route capacity, and a strong travel desire mean 2024 will see more Indians traveling internationally than ever before. In the first quarter of 2024, 97 million passengers passed through Indian airports, a number that would have taken a year to achieve a decade ago.
- Domestic and International Traffic Growth: Domestic passenger traffic is up 21% compared to 2019, while international traffic is up 4%.
- Significant Increases in Key Markets: Indian travelers to Japan, Vietnam, and the U.S. have increased dramatically, with notable rises in visitor numbers.
Longer Leisure Stays
In APAC (excluding ANZ), tourists are extending their trips by an average of 1.2 days to 7.4 days, driven by affordability, favorable exchange rates, and warm weather. This trend benefits local economies as longer stays generally translate to more spending per trip.
Thrill Seekers and Experience Spending
Globally, consumers continue to prioritize experiences over material goods. Spending on experiences and nightlife has reached its highest point in five years, making up 12% of tourism sales. Australian tourists are the highest spenders in this category, with 19% of their travel budget going towards experiences and nightlife.
Casual Over Luxury
Tourists prefer casual fashion and food, except where luxury offers exceptional value. Luxury fashion sales have soared in Japan and Hong Kong SAR, driven by a weak yen and late reopening respectively. Meanwhile, fine dining is thriving in Australia, India, and Thailand, outperforming casual dining.
These trends highlight the evolving preferences and behaviors of travelers, setting the stage for an exciting year ahead in the global travel sector.
“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.
Tags: David MannDavid Mann, Mastercard Mastercard
