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Dubai Edges Closer to Singapore in the 2014 Global Destination Cities Index

Desmond Choong, Research Economist, MasterCard Center for Inclusive Growth.

Dubai and Singapore are inevitably compared to each another. There are plenty of parallels: Both are modern cities with tall, shimmering skyscrapers.  Both are wealthy financial centers where the focus is on commerce. Both places are hot and humid. Both have sizable populations of expatriates and guest workers.

In addition, both have world-class airports and engage in a friendly competition as international air travel hubs. That’s where the comparisons start to get serious. And so both cities are likely to note the findings of a new study on international air travel.

Both Dubai and Singapore rank in the top five of MasterCard’s Global Destination Cities Index for 2014. The Index provides an annual ranking of 132 of the most important destination cities in the world. It generates estimates of the total number of international overnight visitors to each of these cities each year, their cross-border spending in these cities, and breakdown of their numbers by feeder cities.

The index lists London as the world’s top destination city for 2014, followed by Bangkok, Paris, Singapore, and Dubai respectively.

While Singapore (4th) again comes ahead of Dubai (5th), the emirate shows growth momentum that is bound to get noticed in the Lion City.

Singapore’s growth rate is currently at 3.1% but Dubai is the third fastest growing city in the top ten with a growth rate of 7.5%. If their current growth rates are to continue, then Dubai would close the gap and overtake both Singapore (and Paris) within five years to be the third leading global destination city, the Index projects.

Notwithstanding, Singapore does outperform Dubai in the ranking for international visitor spending, coming in at fourth (US$14.34 bn) while Dubai ranks eighth (US$10.9 bn).

However, the numbers of international visitors can also be represented on a per resident basis for each of the destination cities to illustrate the magnitude of their impacts. On the ratio between international visitors and residents in the top 20 destination cities in both 2009 and 2014, Dubai is in a league of its own, with the highest ratio of 4.8 visitors per resident, up from 4.2 in 2009. Singapore has a ratio of 2.3 in 2014, up from 1.4 in 2009.

In terms of dollar amounts for the ratios of international visitors’ spending on a per resident basis, Dubai has the highest ratio at US$3,863 per resident. Singapore is at second place with US$2,600 per resident.

Dubai is first in its region – it has the top rank in the Middle East and Africa region with 11.95 million international overnight visitors, Singapore is second to Bangkok in Asia-Pacific with 12.47 million visitors.

Other indicators show a strong growth momentum. Dubai is projected to generate more international overnight visitors per resident than any other city. In addition, its connectivity with other air hubs around the world has grown by 44.6% in the last 5 years and is currently the 4th most connected city in the world (Singapore is 8th).

Mapping a destination city’s key feeder cities therefore generates valuable insights on a destination city’s growth potential as well as challenges ahead.

Dubai’s top 5 feeder cities are London, Riyadh, Kuwait, Jeddah, and Paris. While growth rates of visitors from Saudi Arabia and Kuwait are either dropping or barely growing, growth rates of visitors from London and Paris are growing strongly in double digits. This is consistent with the trend that international visitors from outside of the region is becoming more important for Dubai, currently accounting for 62% of the total.

The top five feeder cities for Singapore are Jakarta, Tokyo, Shanghai, Hong Kong, and Manila, and all are in Asia Pacific. This is consistent with the fact that 82% of visitors to Singapore are from this region.

So while both Singapore and Dubai make a strong showing in MasterCard’s Global Destination Cities Index for 2014, and both seemed poised to remain in the top 10 for years to come, Dubai’s strong growth as a destination city will be something to watch in the friendly competition between these two cities.

Do you think Singapore can improve its showing in next year’s GDCI to halt Dubai’s rapid rise?