September 14, 2011
Amman,14 September 2011 - The world’s most prominent cities, including those hit hardest by the financial crisis, are leading global recovery through their connectivity and as destination cities for international visitors, according to the inaugural MasterCard Worldwide Index of Global Destination Cities™ released recently. Within Middle East and Africa, Amman featured prominently on the Index, coming in eighth in terms of numbers of inbound international visitors and ninth in terms of international visitor spending.
The latest Index from MasterCard is a new approach to understanding the global economy from the perspective of connectivity between global cities, especially in terms of international travel and cross-border expenditures. The emergent picture depicting this network of connectivity between these global destination cities can serve as a new road map for a deeper understanding of the dynamic flow of global commerce.
The Index estimates that 1.8 million international visitors will visit Amman in 2011 – this reflects a robust growth of 14.1% compared to 2010. Amman is also expected to witness international visitor spend of US$1.3 billion in 2011, making it the ninth most highly ranked city in this category across the Middle East and Africa and representing an increase of 19.9% compared to 2010.
Top cities for Amman’s inbound travel and expenditure are London, Dubai and Abu Dhabi. London is ranked as top inbound origin market, with 137 thousand travellers expected to come to Amman, with an estimated expenditure of US$104 million. Abu Dhabi ranks third for inbound cities travelling to Amman, but is the city with the highest percentage of business travellers, with 37.61% of travellers going to Jordan’s capital for business.
Cairo, Istanbul and Beirut emerged as the top three destination cities for Amman in terms of the number of outbound passenger departures. Beirut and Cairo recorded the highest expected outbound spend, with an estimated expenditure of US$335 million and US$177 million respectively.
The MasterCard Index of Global Destination Cities ranks 132 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 2011. The Index is part of MasterCard’s rich suite of research products, which include the MasterCard Worldwide Index of Consumer Confidence, the MasterCard Worldwide Index of Women’s Advancement, as well as over 70 Insights reports to date. This Index and the accompanying reports are not based on MasterCard volumes or transactional data.
“The MasterCard Index of Global Destination Cities is the newest addition to our knowledge leadership platform. We continually assess and innovate our knowledge leadership platforms to offer relevant and updated insights that support the acceleration of business and drive real value for our customers, associates, merchants and consumers in the region,” said Shaun Rashid, area head, Northern Africa and Levant, MasterCard Worldwide.
“We are delighted to see Amman’s continued growth as a destination for travellers from around the globe. Amman is renowned for its rich history, and has established itself as a key business hub in the Middle East. The Global Cities Index is a part of MasterCard’s endeavor to understand the wider economic significance and impact of inbound travel and expenditure into cities like Amman, and reflects a healthy outlook for Jordan’s capital,” added Basel Eltell, vice president, region manager, Levant.
Overall London topped the world’s cities by visitor numbers with 20.1 million inbound passengers expected in 2011, ahead of Paris in second with 18.1 million. Cities in Asia/Pacific account for eight of the top twentywith Bangkok ranked third globally and, projected to have 11.5 million visitors this year, followed by Singapore with 11.4 million and Hong Kong with 10.9 million visitors. Only one city in North America is in the top twenty, New York, which is ranked twelfth with 7.6 million inbound passengers expected.
MasterCard recently launched its MasterCard Cities website (http://cities.masterintelligence.com/), a new microsite that offers a unique tool to discover the results of the Index through an interactive world map of international air travel between 132 cities across the world.
Middle East & Africa
Riyadh’s rise confirmed by regional rise
Huge visitor expenditure growth is recorded for the city of Riyadh for 2011, which ranks first in the region, with an impressive growth rate of 35.5%. Dubai and Abu Dhabi in the UAE ranked third and fourth respectively, with growth rates estimated at 24% and 21.8%.
Nairobi edges Johannesburg in Sub Sahara
According to the Index, visitor expenditures are expected to grow at 20.8% in Nairobi, exceeding the growth rate of Johannesburg, the only other Sub-Sahara African destination city in the top ten.
Houston leads US cities on visitor numbers
Houston, Texas ranks top of the US cities with a visitor growth increase of 14.3%, followed by New York with 11.7% and Washington DC with10%.
Chicago top on cross-border expenditure
The Index records substantial growth in visitor expenditure for 2011 with Chicago ranked first with 18.8%, followed by Toronto with 17.8% and New York closely behind with 17.3%.
Istanbul beats Europe’s established guard
Turkey’s largest city ranks seventh with 9.4 million visitor arrivals, and also ranks highly on visitor growth, ahead of Western European destination cities such as Frankfurt, Rome and Amsterdam.
European capitals low on visitor growth
Seven out of the top ten European capital cities – behind Amsterdam (ranked 3rd) – record visitor growth in the single digits percentages. By comparison, out of the top ten Asia/Pacific cities by visitor growth, none falls below 10%.
Chinese cities top Asia-Pacific on growth
In the Asia/Pacific region, Beijing and Shanghai are in second and third ranks with visitor growth rates for 2011 estimated at 20.2% and 18.6% respectively, reflecting their rising attraction as China’s most important destination cities. Shanghai also ranks second regionally on visitor expenditure with growth rates of 24.3% for 2011. Beijing also ranks third in both number of visitors to Dubai and how much they spend there.
Australia: a big spending destination
Australia’s two most prominent cities attract very high visitor expenditures. Globally, Sydney is ranked sixth with an estimated visitor expenditure of US$13.8 billion, even though the city does not even feature in the top ten by visitor arrivals. The city of Melbourne also ranked 19th with an estimated visitor expenditure of US$7.5 billion.
Latin American cities record contraction
Of the top ten destination cities in visitor arrivals, the Venezuelan capital Caracas, Quito (Ecuador), and Santo Domingo (Dominican Republic) are expected to see a contraction in growth rates for 2011 because many of their top origin cities are seeing a reduction in outbound traveler numbers.
Lima signals emerging market trend
The Index finds emerging market destination cities recording both high visitor arrival and expenditure growth. Peru’s capital, Lima, growth rates for visitor arrivals and expenditure are 20.3% and 25.7% respectively.
For the full report go to: www.masterintelligence.com
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).
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 Adjunct Professor at the Sauder School of Business, University of British Columbia, Vancouver, B.C. Canada, and is a frequent speaker at numerous international high-profile conferences.
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