However, Canadian cities not expected to crack the top 20 international destination cities ranking

TORONTO, May 27, 2013:  Toronto is expected to be slightly ahead of Vancouver for fourth place among overnight international travelers in North America, but tourists are expected to spend $2.3-billion (35 per cent more) in Vancouver than in Toronto in 2013, according to MasterCard’s Global Destination Cities Index, an analysis of international travel and visitor spending in 132 major cities.

“This suggests that Vancouver has done a better job creating the activities, the arts, culture, entertainment and historic sites that visitors will pay to experience,” said Dr. Yuwa Hedrick-Wong, the economist who serves as Global Economic Advisor to MasterCard. “That’s important because those visitor dollars create a lot of jobs, economic activity and social benefits.”

“When cities attract more visitors, that creates a need to upgrade infrastructure and improve the cityscape and the overall urban environment,” said Dr. Hedrick-Wong. The Index indicates a strong connection between a city’s investment in infrastructure and amenities and its tourist draw.

Three Canadian cities ranked within the top ten destination cities for international travelers in North America, with Toronto in fourth place, Vancouver in fifth and Montreal in ninth place.

In the international rankings, Bangkok beat London as this year’s premier destination for international travelers. No Canadian city ranked among the top 20 destinations.

This is the first time an Asian city ranked first since the Index was launched in 2010. London is now followed by Paris, Singapore, New York, Istanbul, and Dubai. Paris remains third, but has shown a decline in the estimated number of international visitor arrivals. Istanbul and Dubai show the strongest growth (along with Bangkok) in increasing their arrival numbers by 9.5 percent and 10.9 per cent respectively.

“Bangkok’s rise to number one is emblematic of the rise of the Global South, which encompasses much of Africa and Asia as well as South America,” said Dr. Hedrick-Wong. “To the extent that the destination cities attract more international visitors, there is inevitable pressure to improve public infrastructure and facilities. With the right policy responses, a virtuous circle can be set in motion: more international visitors leading to more and better investment to improve the cityscape and the overall urban environment, which in turn makes the destination city more attractive to more international visitors.”

Vancouver is expected to trail only New York and Los Angeles among North America cities in the amount overnight visitors spend. Visitors are estimated to spend $6.5-billion in Vancouver in 2013 compared to only $4.2-billion in Toronto, even though both cities will attract 3.4-million overnight visitors a year.

On a global scale, among the top 132 cities covered in the MasterCard Index, Vancouver just edged into the top 20 of expected international visitor spending at number 17. New York still leads all, followed by London, Paris, Bangkok and Singapore rounding out the top five.

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 2013. The Index and the accompanying reports are not based on MasterCard volumes or transactional data.

Highlights and Analysis of the 2013 Global Destination Cities Index:

NEW NUMBER ONE:  Bangkok is 2013’s top destination city by international visitor arrivals as it surpassed London by the slimmest of margins. This is the first time an Asian city is in the top rank since the Index was launched in 2010. London is now followed by Paris, Singapore, New York, Istanbul, and Dubai.  Paris retains its number three ranking, but is the only destination city among the top 20 that shows a decline in the estimated number of international visitor arrivals, by -0.7 percent in 2013.  Istanbul and Dubai show the strongest growth (along with Bangkok) in their arrival numbers by 9.5 percent and 10.9, percent respectively. With the exception of Bangkok assuming the number one ranking, the lineup of the global top 20 in 2013 is the same as in 2012.

RISE OF THE GLOBAL SOUTH:  Of the 12 destination cities showing the fastest increase in air travel connectivity, all are located east and south of Istanbul with the exception of Moscow.  Bangkok, this year’s Top Destination City, demonstrated growth rates of better than 18 percent in 2011 and 2012, with a further 9.8 percent growth in 2013.  Dubai shows the strongest growth (along with Bangkok) in increasing their arrival numbers by 10.9 percent. 

CITIES WHERE AIR CONNECTIVITY IS UP:  The city with the fastest-growing air travel connectivity in North America is Toronto, which ranks 13. The fastest growing city in Western Europe in air travel connectivity is Berlin, which ranks 17.  The African city with the fastest growing air connectivity is Cairo, which ranks 19, and in Latin America it is Bogotá, which ranks 22. This geographical pattern clearly suggests that destination cities in emerging markets in the Middle East and Asia are expanding the fastest in being connected to the rest of the world through having more flights to more cities, and more frequent flights to cities where they are already connected. This will strongly drive the growth of their visitor arrivals and cross-border spending in the coming years.

CITIES TO WATCH:  A closer analysis of the global top five destination cities from 2010 to 2013 with regard to growth rates offers some tea leaves for future indices.  If all top 10 destination cities maintain their current rates of growth in the next few years, then by 2016 Istanbul will surpass Singapore, New York and Paris in terms of international visitor arrivals; and Dubai will similarly surpass Singapore and New York in 2016 and Paris in 2017.

Region by Region Overview

  • The rebalancing that the globe is undergoing is also reflected in this year’s index in the dominance of the Asia/Pacific region. Bangkok is the top ranked city in Asia which boasts the largest number of Destination Cities this year at 32.  Bangkok is followed by Singapore, Kuala Lumpur, Hong Kong, Seoul, Shanghai, Tokyo, Taipei, Beijing, and Guangzhou. Significantly, five of the top 10 in 2013 are in the Greater China region. 

The storyline of cross-border spending in the region is Tokyo which moves up from the seventh rank in arrivals to the third rank in spending, reflecting the higher costs of living in Tokyo. Two Australian cities, Sydney and Melbourne, appear in the top 10 in spending—ranking fifth and 10th, respectively.  Like Tokyo, this is a reflection of the higher costs of living in these two cities as well as the tendency to stay longer when foreigners visit these cities.

When it comes to growth rates over the past three years, Tokyo has shown a strong recovery in 2012, bouncing back to 20 percent from a severe contraction of 20 percent in 2011 as a result of the earthquake, tsunami and Fukushima nuclear disasters. 

  • Although London comes in a very close second this year, it continues to rank first in Europe in international visitor arrivals, followed by Paris, Istanbul, Barcelona, and Milan. In fact, the lineup of the top 10 in Europe remains unchanged from 2012.  What stands out are the astonishing growth rates of Istanbul, which rebounded vigorously from a contraction in 2010 to exceed 25 percent in 2012, then moderated to 9.5 percent in 2013. If Istanbul continues to grow and Paris continues to decline at their current rates, Istanbul will surpass Paris in numbers of international visitor arrivals by 2016. Cross-border spending wasn’t as robust as in years past.  That said, Barcelona has recovered from a contraction in 2012, rising to an estimated growth rate of 4.7 percent in 2013.

 

  • When it comes to growth, Latin America is a tale of two regions.  On the one hand, the lineup of the top 10 destination cities led by Mexico City remains unchanged.  But this apparent stability masks rapidly changing growth dynamics as a different story emerges when you look at the top 5 destination cities by international overnight visitors.  When it comes to growth rates, Lima is gaining traction as the fastest-growing at 12.7 percent, followed by Sao Paulo at 10.7 percent. If these growth rates are maintained, then Sao Paulo could surpass Mexico City and Buenos Aires in 2017, and Lima could overtake Buenos Aires in 2018.  Among Latin America’s top 10 destination cities by international overnight visitor spend, Bogotá is the fastest growing.

 

  • If Istanbul is on the rise in Europe, its counterpart in the Middle East and Africa is unquestionably Dubai which retains its number one rank in the region.  In fact, the line-up remains unchanged in the last year.  But the news story coming out of Dubai is how much it has pulled away from the rest.  Its international arrival number is almost twice that of Riyadh in second rank, and about four times as high as the third-ranked Johannesburg.

The destination city with the strongest growth rate of international visitor arrivals is Abu

  1. If the same growth rates are maintained in the coming years, Abu Dhabi will overtake Lagos in 2016 and match Johannesburg in 2017. 

We have an outlier in Beirut in terms of visitor cross-border spending.  Beirut comes in at number three even though it is not among the top 10 in visitor arrivals, a testimony to its ability to attract visitors that are big spenders. 

  • In North America, the song remains the same: New York, New York, as the Big Apple retains its top ranked destination city in the region, followed by Los Angeles and Miami. Toronto comes in at 4th.  The top 10 roster for North America remains unchanged.  The resilience story in growth rates in international visitor arrivals belongs to Miami, which suffered a contraction of five percent in 2011, but rebounded vigorously to an eight percent gain in 2012, and then close to 11 percent in 2013. 

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Contact:

Alanna Glicksman, MasterCard Canada

Alanna_Glicksman@mastercard.com or (416) 365-5590

Leslie Jackson, Ketchum Public Relations

Leslie.Jackson@ketchum.com or (416) 355-7421

Methodology

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 (airfare 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 MasterCard

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