New MasterIndex of Travel Forecasts Pick Up in Asia/Pacific Outbound Travel in Second Half of 2003

Asia/Pacific outbound travel is on the rise, led by a significant increase in travelers from China, spearheading the revival of tourism in the region the second half of 2003. However, the anticipated decline in outbound tourists from Korea, Hong Kong and Singapore will impact the region's rate of recovery. These are among the key findings of the inaugural MasterIndex of Travel forecast released by MasterCard International and the Pacific Asia Travel Association (PATA).

The forecast also revealed that Hong Kong, Indonesia and Thailand would be key benefactors of the predicted surge in Chinese travelers in the six-month period ahead. Of the projected 6.3 million Chinese tourists, more than half will be headed for these destinations.

Conducted twice a year in June and December, the new MasterIndex of Travel provides six-month outbound forecasts for 12 key Asia/Pacific markets: Australia, China, Hong Kong, Indonesia, Japan, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan and Thailand. Other highlights from the forecast for the next six months include:

· Nine out of the 12 markets are expected to record year-on-year growth in outbound travel, with the biggest gains from China (18%), Thailand (12%) and Malaysia (6.5%). Three markets show declines: Korea (-7.5%), Hong Kong (-6.5%) and Singapore (-3.6%).

· The Japanese are anticipated to be the top travelers in the region with 8.1 million outbound tourists forecast for the six month period ahead, up 0.8% year-on-year.

· Of the SARS affected markets, Hong Kong's tourism outlook is looking particularly strong, with predicted increases in arrivals from its top source markets of China, Japan, Taiwan, Australia and Malaysia. Arrivals for China will likely be affected in part by the decline in Korean travelers, 39% of which are bound for China.

Mr. John Koldowski, Managing Director, PATA Strategic Intelligence Centre, said that the 12 markets covered in the MasterIndex were all important ones. "Northeast Asia attributes more than 77% of its international arrivals to these 12 source markets and Southeast Asia almost 60%. The South & Central Pacific Island nations are also heavily reliant with 73% of arrivals coming from the 12.

Australia and New Zealand in combination see 53% of their arrivals coming from these dozen countries."

"These 12 markets act as a strategic barometer pointing to the future of travel in our region," he said.

Dr. Yuwa Hedrick-Wong, economic advisor, Asia/Pacific, MasterCard, said: "The first half of 2003 saw two major negative impacts on Asia/Pacific economies - the Iraq war and the SARS outbreak, which devastated both private consumption, as well as tourism and related businesses. We are now seeing positive indications of the tourism recovery across the region over the course of the next six months.

"The trend of gradual improvement that is expected over the course of the second half of 2003 will mean that businesses in a number of key markets have a chance to offset some of their first half losses. We hope the MasterIndex is useful in helping to prepare for the better business environment," added Dr. Hedrick-Wong.

The MasterIndex of Travel provides powerful predictive market intelligence that is highly relevant to the travel and tourism sector, as well as related sectors such as retail, entertainment, food and beverage, the hospitality and leisure industry, and manufacturing. It is built on three pillars: 1) the MasterIndex of Consumer Confidence 2) MasterCard's Asian Lifestyles twice-early report designed to monitor business and personal travel trends across the Asia/Pacific region, and 3) PATA's database of outbound travel statistics.

INDIVIDUAL MARKET FORECASTS FOR SECOND HALF 2003

· Australia's outbound tourism is forecasted to grow by 2.4% over the same period in 2002, with total outbound travelers projected to reach 1.46 million in  the second half of this year. In terms of arrivals, Australia is most affected by New Zealand, which is expected to see its outbound travel grow by 2.5%.

· Outbound travel in China is poised to grow 18% year-on-year to reach 6.32 million travelers, a very strong recovery from the first half of the year. Three out of China's top five Asia/Pacific source markets for arrivals are projected to see their outbound traveler numbers expand - Japan (0.8%), Malaysia (6.5%) and Philippines (3.5%). The other two, Korea and Singapore, are looking at shrinking outbound travel figures for the next six months.

· Excluding travel to China, Hong Kong residents are expected to be traveling less with an estimated 2.67 million outbound travelers, down 6.5% year-on-year. As far as arrivals into Hong Kong are concerned, with the exception of Korea and Singapore, its other top seven regional source markets - Australia, China, Japan, Malaysia and Taiwan - are expected to see outbound travel expand over the remainder of the year.

· Indonesia is projected to see an 8% outbound expansion, with the number of outbound travelers reaching 1.15 million for the next six months. Arrivals from its top five source markets in the region - Australia, China, Malaysia, Singapore and Taiwan - are estimated at 2.58 million. All, but Singapore, are forecasted to increase outbound travel.

· The projected 8.1 million outbound travelers from Japan represents 0.8% growth in the second half of the year. In terms of arrivals, Japan receives 22% of Korean outbound travelers, 15% of those from the Philippines and 13% of those from Taiwan. It will be particularly affected by the slump in Korea's outbound traffic.

· Korea's outbound travel will decline by some 7.5% over the next six months. The total number of overseas trips made by Koreans over the second half of the year will come to about 2.79 million. Korea's top four source markets for arrivals are Indonesia, Japan, Philippines and Thailand, all forecasted to grow in their outbound numbers.

· Outbound numbers for Malaysia are expected to reach 1.92 million, representing a 6.5% growth. Indonesia, Singapore and Thailand, its top three source markets in the region, are estimated to bring in 3.7 million visitors over the next six months.

· Overseas trips made by New Zealanders are predicted to grow by 2.5% to  0.54 million. Australia is the only Asia/Pacific market that is among the top sources for New Zealand arrivals. Its outbound travel is projected to increase by 2.4%, resulting in 0.34 million arrivals.

· Philippines is anticipated to expand by 3.5% to 0.48 million outbound trips. It has no Asia/Pacific market among its top sources for arrivals - tourist arrivals are heavily dependent on non-Asia/Pacific markets.

· Singapore's outbound travel is expected to decline by 3.6% with the total number of trips estimated at 4.65 million. An estimated 1.68 million arrivals are forecasted for the next six months from its top five Asia/Pacific source markets - Australia, Indonesia, Malaysia, Hong Kong and Korea.

· The number of Taiwan's outbound travelers is expected to grow marginally at 0.4%, with the number of overseas trips made by Taiwanese in the second half of this year estimated at 3.63 million. Its top four Asia/Pacific source markets are Hong Kong, Indonesia, Philippines and Thailand, which are projected to contribute 0.45 million arrivals into Taiwan.

· Outbound travel from Thailand will grow by 12% year-on-year with total overseas trips reaching 0.92 million. Its top seven Asia/Pacific source markets - China, Hong Kong, Japan, Korea, Malaysia, Singapore and Taiwan - will make a total of 3.05 million trips into Thailand over the next six months.

About MasterIndex of Travel

MasterIndex of Travel is a short-term forecast of outbound travel in 12 key Asia/Pacific markets - Australia, China, Hong Kong, Indonesia, Japan, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan and Thailand. The forecasting is done twice a year, in June and December, to provide powerful predictive market intelligence that is highly relevant not only to the travel and tourism sector, but to sectors such as retail, entertainment, food and beverage, hospitality and leisure, as well as manufacturing.

The analytical foundation of the MasterIndex of Travel is based on the development of a set of techniques that have successfully linked MasterCard's MasterIndex of Consumer ConfidenceTM with PATA's database of outbound travel statistics. The survey findings of the MasterIndex of Consumer Confidence are used as a leading indicator of how consumers may act in terms of overseas travel over the six-month period ahead. Thus, a link is made between consumer sentiment and actual consumer behaviour.

The MasterIndex of Consumer Confidence - the most comprehensive and longest running consumer sentiment survey in the Asia/Pacific region - celebrated its 10th anniversary in 2002. Over the last decade, the survey has demonstrated its predictive precision and proved to be an excellent barometer of the consumer pulse in this region. Today, the survey is much sought after by analysts, academics and decision-makers in financial institutions, government agencies and multi-national organizations.

Supplementing the quantitative forecast in the findings is MasterCard's Asian Lifestyle survey, that reports, twice a year, on Asian travelers' choice of destinations and airlines, average length and average amount spent, for both personal and business travel.