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Asia Pacific Cities Rank Among World’s Most Connected Destinations

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According to the MasterCard Global Destination Cities Index released today, cities in Asia Pacific continued their ascendance as global destinations in 2012, with nearly half of the world’s top 20 cities by visitor arrivals and expenditure heralding from the region.

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 2012.

The Index projects sustained growth among emerging market cities with the top ten Asia Pacific destinations expecting a 9.5% growth in visitor arrivals for 2012 and a 15.3% surge in cross-border spending. Singapore (4th), Hong Kong (6th) and Kuala Lumpur (10th) feature in the Index’s top ten global cities.

Cities in Asia Pacific once again led the charge globally with eight of the top 20 cities by international arrivals, with Bangkok ranked third globally with projected visitors to top 12.2 million visitors this year. Singapore was in fourth place with 11.8 million visitors, with Hong Kong sixth with 11.1 million visitors. Kuala Lumpur ranked 10th with 8.1 million visitors expected.

The region also ranked highly on visitor spending with Bangkok ranked third globally with US$19.3 billion expected to be spent by inbound passengers in 2012, a 16.6% jump from last year. Singapore leapt two places to fifth overall with US$12.7 billion, up 12.7% on last year. Seoul moved into the top ten with US$10.6 billion in cross-border spend, an increase of 16.2%, while Tokyo, still recovering from the triple disasters of 2011 moved up four places to 14th, is officially the world’s third-fastest growing market (24.2%) in terms of cross-border spending.

In terms of growth in visitor numbers six out of the top 20 fastest growing cities in the Index were from Asia Pacific with Tokyo second globally behind Rio de Janeiro (28.6%) with a 21.5% growth in visitor arrivals. Taipei and Beijing also featured in both the top ten growth cities by visitor arrivals and cross-border spending.

“Asia’s destination cities continue their rise, expecting a significant upward trend in visitor arrivals and cross-border spend - most of them on the back of large double digit growth,” observed Dr. Yuwa Hedrick-Wong, global economic advisor, MasterCard Worldwide.

London once again topped the world’s cities by visitor numbers with 16.9 million inbound passengers expected in 2012, just ahead of Paris in second place with 16 million inbound passengers expected.

London also ranked first on cross-border expenditure, ahead of New York in second place, with estimated expenditures in these cities for 2012 amounting to US$21.1 billion and US$19.4 billion respectively.

While cities in Europe and the US still ranked highly in the MasterCard Global Destination Cities Index, Dr. Hedrick-Wong said that the number of emerging market cities featuring in the Index showed Asia’s growing role in the global economy.

“The leading Asian cities are some of the most sought after destinations for visitors from all over the world, and the Index indicates that they will continue to thrive into 2012,” he said. “Another interesting trend that we observe is a rise in cashless payments with many international travelers opting to do electronic transactions rather than using cash. The trend is a response to an increasing demand for safe, simple and smart payments, and highlights the rising importance of cashless commerce for both business and leisure travel,” Dr. Hedrick-Wong concluded.

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 (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).

It is also important to note that the city rankings from the 2011 MasterCard Index of Global Destination Cities are altered retrospectively as updates in data become available.

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