SINGAPORE–(BUSINESS WIRE)–Mastercard, a leader in financial technology, today unveiled a report
that demonstrates the transformative power of tourism in fueling the
development of smarter cities and accelerating economic growth.
“The ASEAN Opportunity: How City Planners and Governments Can Make
Cities Even Smarter by Increasing Investments in Inbound Tourism Growth”
explores how cities can leverage public-private partnerships and data
analytics to optimally allocate resources to grow inbound tourism.
Specifically, the report demonstrates how cities can leverage insights
from anonymized and aggregated Mastercard transaction data to better
reach and attract key traveler segments. Such strategic investments in
inbound tourism growth will in turn deliver a higher standard of living
for residents, create greater financial inclusion and jump-start
Urban Vibrancy Creates Opportunity and Challenges
Urbanization is gathering pace at unprecedented levels, with the UN
predicting that nearly 70% of the world’s population will live in urban
areas by 2050, and 90% of this increase in urban population will be in
Asia and Africa.
With urbanization comes many benefits, including a larger workforce,
higher demand for goods and services as well as increases in
tourism-related inbound income, which in turn leads to a rise in GDP, as
seen in Vietnam, Malaysia, and others in the region. At the same time,
urbanization brings new challenges. As cities reach critical mass,
growing populations mean rising demand for jobs and resources and
increased pressure on healthcare, education and transportation systems.
“No one entity can solve for these challenges by themselves, and
Mastercard believes strategic public-private partnerships can bring
rapid improvements to quality of life, deliver efficient and seamless
everyday experiences and create differentiation specifically in a high
visibility and high growth area such as tourism,” said Rupert Naylor,
Senior Vice President of Mastercard Advisors in Asia Pacific.
A key contributor to the impressive economic growth of Southeast Asia
over the last decade is the even faster growth in inbound travel spend,
driven both by major tourist destinations as well as by lesser-known
For example, while Bangkok, Singapore and Kuala Lumpur continue to top
the list for most international arrivals, Vietnamese cities Hanoi and Ho
Chi Minh have risen rapidly and cracked the top 10 list this year.
Phuket, Pattaya, and Chiang Mai—destinations in Thailand—have also grown
in popularity, suggesting travelers are becoming more experiential and
open to trying new destinations.
This growing volume of visitors to lesser-known destinations reveals how
governments can invest in up-and-coming destinations so as to more
equitably spread the benefits (and strains) of tourism throughout the
country. However, to realise the full potential of this strategy,
investments in infrastructure for these lesser-known destinations will
be critical, both in terms of connectivity to these locations, but also
within the destinations themselves—including cleanup of public spaces,
improved access to clean water, more efficient public transportation and
greater financial inclusion for merchants in these cities.
One example of unsustainable development is in the Philippines. Boracay,
a popular beach destination, was temporarily closed to tourists from
April till October this year due to its inability to provide the
infrastructure support needed to sustainably drive tourism growth,
resulting in a loss of valuable inbound traveler expenditure.
While many leading destinations have already invested in such
infrastructure, opportunities remain for ongoing innovation in areas
such as crowd management and traveler experience to draw in new and
repeat tourists. These initiatives help to create new jobs, improve
standards of living for residents and ultimately drive economic growth.
Inbound tourism also has the potential to spur increased economic
development for countries with lower GDP growth, bringing in revenue and
generating employment. Countries where there is a particular opportunity
to capitalize on inbound traveler expenditure to foster greater GDP
growth include the Philippines, Singapore and Indonesia.
Business travel has been growing rapidly in several Southeast Asian
countries, and has outperformed the overall travel market in the region
over the past three years. The top 10 Southeast Asian cities that
attract the most business travelers have all experienced double-digit
growth in corporate expenditure, with Vietnamese cities Da Nang, Hanoi
and Ho Chi Minh City occupying three of the top 10 spots.
Another key tourist segment for the region is students. While Singapore
remains the region’s education hub, with more than triple the spend of
the next destination, Hanoi, Khanh Hoa and Ho Chi Minh City logged the
highest growth in inbound student expenditure in the past three years,
in part due to Vietnam’s recent boom in online education.
Mastercard transaction insights further show that, beyond corporate and
student travel, travelers to specific Southeast Asian destinations are
purpose-driven. For example, Thailand experiences higher tourist spend
on healthcare, while Vietnam sees increased spend in fine dining, and
Myanmar and Laos see significant spend on tour packages.
Harnessing the Power of Insights
For both existing and potential tourist destinations, the critical
dilemma facing governments and city planners is this: How can we make
the most informed decision to allocate available resources that will
drive maximum impact in order to attract new tourist segments and
ultimately, drive tourism spend?
Inbound tourism spend insights help uncover granularity such as where
tourist segments are coming from, where they travel, what the profiles
of different segments look like and what different segments do in
different locations. This granularity provides governments and city
planners with the information they need to take action towards growing
inbound tourism expenditure.
For example, by leveraging Mastercard transaction insights to identify
in which categories spend is the highest, cities can create
category-specific tourism campaigns. Similarly, better understanding
travel “corridors”—such as travelers from Russia visiting beaches in
Thailand, and Bali experiencing significant inflow from visitors from
Australia and India—will enable city planners to tailor their offerings
to align with the preferences and ne of specific tourist segments,
including implementing language support initiatives for specific
countries in popular destinations.
“Consumer spending in travel has a ripple effect on economies, creating
jobs and opportunities for local businesses and communities. Through our
deep data insights and analytics experience, Mastercard is working with
governments and city planners to enable nimble, data-led decision-making
and optimized planning and investment that can drive economic growth and
financial inclusion. We are also building custom programs that improve
access and enhance the visitor experiences while co-creating solutions
that address issues such as over-tourism and over-crowding in specific
locations,” said Naylor.
Mastercard (NYSE:MA), www.mastercard.com,
is a technology company in the global payments industry. Our global
payments processing network connects consumers, financial institutions,
merchants, governments and businesses in more than 210 countries and
territories. Mastercard 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.
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