June 01, 2011
City-State to be Among Top Ten Global Destinations by Visitor Arrival Numbers and Expenditures in 2011
Singapore, 1 June 2011: A high volume of international visitor arrivals, coupled with significant visitor expenditures has placed Singapore among the world’s top ten destination cities on both counts, according to the MasterCard Index of Global Destination Cities released today.
The latest Index from MasterCard is a new approach to understanding the global economy and the dynamic flow of commerce across the world. It examines 132 global cities across five continents by visitor arrival and cross border spending in the destination city, and gives growth forecasts for 2011.
With an estimated 11.4 million visitor arrivals in 2011, the Index places Singapore second only to Bangkok (11.5 million) in the Asia-Pacific region. 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. Only one city in North America is in the top twenty, New York, which is ranked twelfth with 7.6 million inbound passengers expected.
While cities in Europe and the US still ranked highly in the MasterCard Index on Global Destination Cities, results point towards many emerging market cities that are showing robust growth with increases in both visitor arrival and cross-border expenditure, and growth rates exceeding 20% in several cities.
Cities in Asia/Pacific led the charge globally having eight of the top twentycities by international arrivals, with Hong Kong (fifth with 10.9 million visitors) and Seoul (eleventh with 7.9 million visitors) among the other cities performing well. Asia also displayed strong visitor growth for 2011 with Kuala Lumpur ranked second in the world with a 21.8% growth forecast, only behind Barcelona which led with an impressive 24.3%. Istanbul ranked third with 20.4%, followed by Shanghai (18.6%) and Hong Kong (17.4%). Singapore had a lower growth rate of visitor arrivals over 2010 with an expected increase of 14.5% this year.
London also ranked highest globally on cross-border expenditure, ahead of New York in second place, and Paris in third. Estimated expenditures in these cities for 2011 amounted to US$25.6 billion, US$20.3 billion and US$14.6 billion respectively.
Singapore performs strongly in this category as well, ranking ninth globally and third in Asia-Pacific with US$10.8 billion, behind Bangkok (US$ 14.4 million and fourth overall) and Sydney (US$ 13.8 billion and sixth overall). Visitor spending helped Hong Kong to tenth overall with US$10.4 billion and Seoul eleventh with US$10.2 billion.
Overall, Asian cities dominate in terms of expenditure growth with seven of the top twenty high growth cities in the world heralding from the region. Kuala Lumpur tops this list as well, as the Malaysian capital ranked number one in the region with an expected growth rate of 30.1%. Singapore (23.9%), Hong Kong (23.6%), Tokyo (20.8%) and Taipei (20.3%) follow behind.
“Singapore’s status as one of Asia’s premier destinations for travelers from all over the world is confirmed by the findings of the new MasterCard Index of Global Destination Cities,” said Ms Julienne Loh, vice president and country manager, Singapore, MasterCard Worldwide. “With a host of options for dining, entertainment and leisure, the city represents a high-value city destination for all types of travelers. Through this index we can now see that other cities in the region, such as Kuala Lumpur and Shanghai, are rising in popularity and Singapore must see this as an opportunity to maintain its attractiveness to travelers.”
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%.
Dubai – a destination on the rise
While cities from the Middle East did not feature prominently on the list, the capital of the U.A.E. is ranked ninth in the world by visitor arrivals and eighteenth by expenditures, growing by 17.3% and 24.0% respectively.
Chinese cities show prominent visitor growth
Beijing and Shanghai are ranked second and third regionally in terms of visitor growth, with growth rates estimated at 20.2% and 18.6% respectively, reflecting their rising attraction as China’s most important destination cities. Shanghai also ranks second in the region for growth in visitor expenditures with 24.3%.
Philippines boosted by Manila’s continued growth
Manila is ranked 10th in the Asia/Pacific region with 3 million visitors for 2011, but the city is forecasted to grow significantly: it is ranked sixth in the region with visitor growth of 15.3%.
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).
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