With Asia’s hot spots attracting more global travellers than ever before, jumping to 342.2 million visits in 2018 from only 159.1 million in 2009, it’s easy to see the sizeable opportunity on the table for SMEs spanning hospitality, retail, tourism, food and beverages and other industries. With total travel spend in the Asia Pacific region more than doubling to US$281.1 billion from US$117.6 billion during the same period, entrepreneurs that can capitalise on this trend stand to gain a lucrative piece of the pie.
According to Mastercard’s latest Asia Pacific Destinations Index (APDI), the five most popular destinations for international travellers – Bangkok, Singapore, Kuala Lumpur, Tokyo and Seoul – welcomed over one-fifth or 22 per cent of all overnight visitors to the region in 2018. These five hot spots also captured more than one-quarter or 25.2 per cent of total international travel spending in the region.
Sydney has also seen a growth in tourists travelling to Australia for leisure, with expenditure increasing as a result. Sydney has seen consistent growth in overnight arrivals of 5.4 per cent a year on average over the last nine years, almost doubling from 2.7 million in 2009 to 4.4 million in 2018. This is projected to increase by six per cent in 2019.
Not surprisingly, mainland Chinese travellers comprise the majority of overnight arrivals in the region by a large margin – and their numbers only continue to climb, though the actual figures are lesser-known. Looking to the future, India should also factor into merchants’ business plans. In 2018, Indian travellers made 14.9 million overseas trips globally, with nearly half of those being to destinations in Asia Pacific.
Mastercard’s Index also reveals how much travellers are spending on average in each destination, as well as what they’re spending it on. For example, spend in Sydney by tourists has risen by 6.5 per cent a year on average since 2009, Increasing from US$4.54 billion to US$8.03 billion in 2018.
As you might expect, lodging takes precedence in several top destinations in the region. In Sydney, almost 30 per cent of traveller spend goes towards accommodation, a powerful insight for hoteliers. Meanwhile, hospitality and retail therapy are almost equal in expenditure in Australia’s top city. Travellers are spending 15.8 per cent for food and beverages and 14.4 per cent for shopping, with other expenditure percentages dedicated to services, transport and other.
In Bangkok, the world’s number one travel destination, opportunities abound for businesses across all segments. Travellers spent an average of US$184 per day in Thailand’s capital city, a contrast from spending in Sydney at an average of US$83, with a fairly even split between accommodation, food and beverages and shopping, with accommodation having a slight edge over the other categories at 25.3 per cent. The average length of stay in Bangkok is 4.8 days, compared with Sydney at 22 days. Visitors to Australian destinations tend to have longer average stays, the research shows.
With Asia’s upward travel trajectory only set to continue, small businesses seeking to win a share of visitors’ travel budgets would do well to think about where most travellers to their cities are coming. This will ensure that that they maximise their marketing budget accordingly, and better tailor their offerings to those customers that are most likely to come through their (physical and digital) doors.
Richard Wormald, Division President Australasia, Mastercard