London Crowned As Top Destination City for Second Year in a Row, According to MasterCard Global Index
Business and Leisure Travel Drives Growth of Cashless Commerce Across 132 Cities
To tweet this news, copy and paste http://bit.ly/KaNZi0 to your Twitter handle with the hashtags #MasterCard and #DestinationCities
LONDON, UK, June 11, 2012: On the back of the Queen’s Diamond Jubilee London has established itself as the hottest city in the world right now and continues to own centre stage as it ranks as the top visitor destination in the second annual Global Destination Cities Index, according to MasterCard Worldwide. For the second year running, the British capital is also expected to attract the highest international visitor spend, ahead of New York, Bangkok, Paris and Singapore.
In terms of international visitor numbers, Rio de Janeiro (up by 28.6%), Tokyo (up by 21.5%), Abu Dhabi (up by 17.9%), Tunis (up by 17.7%), Istanbul (up by 14.7%) and Toronto (up by 7.6%) are all projected to see the biggest increases for their respective regions, while Asia-Pacific (up by 9.5%) is set to show the biggest growth in 2012 of all the global regions. According to the Index, despite a challenging economic climate, overall international visitor numbers are projected to increase by a steady 5.7% and spend by 10.6% respectively for the top 20 ranked cities in the report, compared to 2011 figures. To view the Index as an interactive map, please click here.
Attracted by the city’s landmark museums, world-class restaurants and West End shows, as well as the ease of doing business, visitors to London are set to spend higher than average per head than visitors to all other cities cited in the MasterCard report. As the global centre of interconnectivity, London is also well poised to become a ‘cashless capital’ in the not so distant future. MasterCard projects that electronic transactions could overtake cash for consumer payments in the UK by 2025.
Ann Cairns, President of International Markets, MasterCard Worldwide, comments: ‘‘This Index paints a picture of an ever more interconnected world where electronic transactions play a critical role in enabling global commerce. When we look at the way international travellers are spending, it is clear that cash is not satisfying the growing demand for safe, simple and smart payments.’’
On London’s number one ranking, the Mayor of London, Boris Johnson, said: “As our fantastic Diamond Jubilee celebrations demonstrated, London knows how to throw a party and, as we prepare to host the greatest Games the world has ever seen, it is no surprise our capital is the top choice for tourists. Alongside a huge array of events, festivals and activities planned for a summer like no other, London boasts the world-class museums, restaurants, theatres and shopping experience that ensure we’re unbeatable.’’
Dr Yuwa Hedrick-Wong, Global Economic Advisor for MasterCard Worldwide and author of the report, concludes: ‘‘In spite of a challenging global economic backdrop, this year’s Index projects that there are hotspots of robust growth around the globe, in terms of both international visitor arrivals and expenditure. With a new generation of international travellers from emerging markets flocking to the world’s top destinations, global cities continue to represent an important engine of growth.”
“This year we’ve also seen a real distinction between financial markets and consumer markets. Modern financial markets are truly interconnected so a crisis in one region quickly impacts the rest of the world. Cities focused on consumers rise and fall based on local conditions, such as employment and income, with conditions varying greatly from one city to the next, irrespective of the global economic environment.”
Recognising the unique experiences cities have to offer for locals and visitors alike MasterCard continues to expand its Priceless Cities platform, with Beijing and Sydney having recently joined London, New York and Toronto. As part of this programme, MasterCard cardholders can enjoy exclusive access to the very best in arts, sport and entertainment from West End theatre in London, to the best seats in the house at the Yankees in New York and visiting a private section of the Great Wall of China.
The MasterCard Index of Global Destination Cities ranks cities in terms of the number of their total international visitor arrivals and the cross-border spending by these same visitors in the destination cities, and gives visitor and passenger growth forecasts for 2012.
This Index and the accompanying reports are not based on MasterCard volumes or transactional data.
Analysis of Global Destination Cities Index key highlights:
- London has again secured global dominance. The top five origin cities for London are set to be Dublin, New York, Stockholm, Amsterdam and Frankfurt. The numbers of visitors from Frankfurt is predicted to increase by an impressive 20.8%. Visitors from New York will spend more than twice as much once they arrive as those from Dublin. Interestingly, these spending patterns are set to be reciprocated – Londoners visiting New York will spend more than those originating from each of the other four of their top five origin cities. The predicted increase in spend in the UK capital is in line with a positive trend in the number of UK card transactions, over the last year – transactions increased by 8.3% from 2010-2011, according to Euromonitor, an independent research company.
- Although the report predicts that Paris will have fewer international visitors this year – a marginal decline of 0.6% – it will still hold the number two slot in terms of actual numbers of visitors. What’s more, those visiting are set to spend slightly more – their spend is expected to increase by 1.5%. Interestingly, Paris will not be one of the top origin cities by air travel for the lead destination city, London, despite its proximity, although Parisians will be travelling further afield – they feature in the top five origin city lists for both New York and Dubai in the report. This predicted increase in traveller spend within the French capital is in line with the upward trend in the number of card transactions for France. Euromonitor data shows an increase in the number of card transactions of 7.1% from 2010-2011 for the Country.
- New York again comes second in the spend rankings, although international visitor spend in the Big Apple is set to increase by 6.8%. In visitor number terms, New York is predicted to remain in 13th place, although, international visitor numbers are expected to rise by 5.2% in 2012. New York continues to appeal to long haul travellers and Canadians. Looking at the top five origin cities for visitors, the majority sit across the water, with London, Paris, Frankfurt and Tokyo all making an appearance in the predicted rankings. Toronto in Canada completes the top five, claiming the second slot. The predicted increase in visitor spend for New York also mirrors the recent growth trend in terms of the number of card transactions in the US. The Country has enjoyed card growth of 5.5% over the last full year, according to Euromonitor, whilst the number of cash transactions has fallen by 5.2% over the same period.
- Bangkok is one of the rising stars of the report and is cited as the number one city in terms of projected international visitor numbers and spend within the Asia/Pacific region. The city will witness growth of 6.5% in terms of visitors and an impressive 16.6% in international spend. Most traffic is set to come from Tokyo and these visitors will also be spending more than visitors from the other top origin cities. Traffic to Bangkok will be concentrated within the region. Interestingly, Thailand has also been witnessing fast growth in terms of the numbers of card payments over the last year, up 8.4%, according to Euromonitor.
- Singapore remains stable in the visitor number rankings, despite the fact that it is set to experience significant growth in visitor numbers, up 9.9% on the previous year. It has also climbed two spaces to claim the fourth spot in the international spend rankings, a rise of 12.7%. This increase mirrors the recent growth in the number of card transactions for the Country, up 4.7% according to Euromonitor.
- Istanbul is the fastest growing city in the top five in terms of international visitor numbers, set to grow14.7% on last year and it has climbed one space in the rankings to claim the fifth spot. It is also rising up the charts when we look at visitor spend, with a predicted increase of a staggering 20.7% since MasterCard’s last report. Turkey is another Country that has enjoyed fast growth in terms of the number of transactions by card, recently, up 12.2% over the last year, according to Euromonitor.
Region by Region overview:
- According to the report, the outlook for international travel to and expenditure in Europe is fairly rosy for 2012. The top ten cities show a projected combined overall increase in visitor numbers of 2.8% and a rise of 8.1% in terms of projected total international spend. The average international spend per visit is expected to rise for these European cities to $1,172, up 5.1% on last year.
- The Asia/Pacific regional story stands out as the real success story of the report, with total visitor numbers for the top ten cities predicted to grow by 9.5% and total international spending set to increase by a solid 15.3%. Average international spending per visit for these cities is set to increase to $1,350, up 5.4% on the previous year. Bangkok claims the top slot in terms of visitor spend in the report and Tokyo, in sixth place, shows the fastest predicted spend growth, at 24.2%. Hot on its heels is Taipei, with a healthy predicted visitor spend growth of 20.5%.
- The growth figures for Latin America show real signs of positivity, with projected visitor numbers up by 7.3% for the top ten destination cities in the region and total international predictions for spend growth at 7.9%. Though there is set to be a lower average international spend per visit of $982, this is up by 0.6% on last year. Buenos Aires takes the number one slot in spend terms, whilst Quito and Bogota will be the fastest growing, says the report. Meanwhile, Recife will be the fastest growing regional city within our report in terms of visitor numbers, with impressive anticipated growth of 37.6%.
- The regional outlook for the Middle East and Africa is equally bright, with visitor numbers for the top ten cities set to grow by 7.2%, total international spending predicted to rise by 10.4% and average spend per visit set to grow by 3%. Visitors will spend the most in Dubai and this is also a fast growing city within the top ten for that region. Abu Dhabi will be the fastest growing in terms of spend, according to the report, up 20.7% this year. Looking at the full list of cities, Durban will be the fastest growing for the region in terms of visitor numbers and is predicted to be the second fastest growing city in our report.
- The predicted growth in North America also looks healthy. Looking at the top ten cities, visitor numbers are set to swell by 4.1% and international spending to grow by 5.8%. Average spend per visit will also go up by 1.6% to an impressive $2,442, claims the report. New York will be the city where visitors will spend the most, up 6.8% on last year. There will also be increasing numbers of visitors flocking to the Big Apple, with visitor numbers set to grow by 5.2%. Dallas and Boston, though not in the Top Ten, will also show fast growth in terms of visitor spend, both predicted to go up by 13.6% on last year, as well as healthy increases in projected visitor numbers. Toronto, the fastest growing city in North America’s top ten, will also grow fast in terms of international visitor spend, with a projected increase of 10.2% on last year.
For further information, please contact:
Bernhard Mors, MasterCard Worldwide, +1-914-325-9676, firstname.lastname@example.org
Corinne Raes, MasterCard Europe, +32-498-585237, email@example.com
Doyel Maitra, MasterCard UK, +44-844-875-1522, firstname.lastname@example.org
The MasterCard Worldwide Index of Global Destination Cities is compiled using international flight and flight capacity information purchased from OAG Global, a provider of international aviation data. Flight schedules are also used for calculating flight frequency between pairs of cities. Airlines also publish on a regular basis their historical load factor, and advance flight schedules, which are then used to estimate the actual outbound passenger departures, and for forecasting outbound passenger departures in the coming year.
On any given flight there are visitors from the departure country, returning residents of the destination city after visiting the departure country, and a third group: non-residents connecting through the departure country to the destination city on their way to a second destination city. This group can be a low proportion of the passengers for typically non-hub cities, but very high for destination cities that are “hubs” such as Singapore, Amsterdam, and Frankfurt.
On a country level, the UN Database of “Trade in Service” in the “Travel Component” provides estimates of how much each year residents spend abroad (air fare paid in home country not included). An algorithm is applied to this total outbound expenditure and estimated total number of outbound passengers to derive an estimate of average per outbound passenger’s expenditure overseas.
A margin of error is also unavoidable in such estimates, as not all outbound trips are of equal length, and the cost of living varies a great between arrival cities such that even if each trip of equal length, expenditure per passenger between different arrival cities would still be very different.
This margin of error is reduced significantly by imposing a minimum of expenditures in the algorithm, after a number of iterative testing (US$500 per trip for bordering arrival country and US$700 per trip for non-bordering arrival country).
Please note, the city rankings from the 2011 MasterCard Index of Global Destination Cities are altered retrospectively as updates in data become available.
About Dr Yuwa Hedrick-Wong, Ph.D., Global Economic Advisor, MasterCard Worldwide
Dr Yuwa Hedrick-Wong is a business strategist and economist with 25 years of experience gained in over thirty countries. He was appointed Global Economic Advisor to MasterCard Worldwide in 2009. Prior to this role, he was Economic Advisor to MasterCard in Asia/Pacific, a position he held since 2001. As economic advisor, he chairs a MasterCard Knowledge Panel of leading economists, policy analysts, academics and business strategists for regular exchange and knowledge sharing. In 2007 he was appointed Advisor at Southern Capital Group, a private equity fund; and in 2008 he was appointed to the Investment Council of ICICI, India’s largest private bank.
Yuwa is also currently HSBC Visiting Professor of International Business at the University of British Columbia, Vancouver, B.C. Canada, and is a frequent speaker at numerous international high-profile conferences.
MasterCard (NYSE: MA), www.mastercard.com, is a global payments and technology company. It operates the world’s fastest payments processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories. MasterCard’s products and solutions make everyday commerce activities – such as shopping, traveling, running a business and managing finances – easier, more secure and more efficient for everyone. Follow us on Twitter @mastercardnews, join the conversation on the Cashless Conversations Blog and subscribe for the latest news.