THE NEW DYNAMIC
Outbound travel numbers from Asia-Pacific’s emerging markets will grow twice as fast as those from developed countries over the next five years, according to a new report.
China is expected to lead the way as outbound travellers from emerging Asia-Pacific countries outnumber those from the region’s developed nations over the next five years, according to a new Mastercard report.
Its Future of Outbound Travel in Asia Pacific 2016 to 2021 study reveals that outbound numbers from emerging Asia-Pacific markets currently outstrip those from the developed nations by one and a half times.
And it says that this gap will grow more than twice as fast over the next five years – 7.6% versus 3.3% Compound Annual Growth Rate (CAGR).
Collectively, Asia-Pacific markets are expected to grow by 6% annually from 2016 to 2021.
Not surprisingly, the largest outbound travel market in 2021 is expected to be China with 103.4 million trips – constituting 40% of all Asia-Pacific outbound travel, nearly four times that of the second and third markets being South Korea (25.6 million) and India (21.5 million) respectively.
Forecasted international outbound trips from the top 10 Asia-Pacific markets by 2021, include:
1.China – 103.4 million
2.South Korea – 25.6 million
3.India – 21.5 million
4.Japan – 19.4 million
5.Taiwan – 16.3 million
6.Malaysia – 14.2 million
7.Australia – 11.8 million
8.Singapore – 11.7 million
9.Indonesia – 10.6 million
10.Thailand – 9.1 million
“The burgeoning middle class is driving the growth of outbound travel in Asia-Pacific, along with other trends such as the emergence of the Asian millennial traveller, and on the other end of the spectrum, the senior traveller, as well as new technology and infrastructure developments,” says Eric Schneider, Mastercard Advisors’ senior vice president for Asia Pacific.
“Asia-Pacific travellers will continue to fuel global tourism growth in years to come, providing vast opportunities for businesses to benefit through the development of products and solutions that seek to improve their overall travel experiences.”
Myanmar is projected to be the fastest growing outbound travel market with a 10.6% annual growth rate over the next five years, followed by Vietnam (9.5%), Indonesia (8.6%), China (8.5%), and India (8.2%).
Among developed Asia-Pacific markets, the fastest growing are South Korea (3.8%), followed by Singapore (3.5%), Australia (3.5%) and New Zealand (3.4%).
Outbound travel growth versus real GDP growth
According to the study, outbound travel is forecast to grow faster than real GDP with the exception of Bangladesh, the Philippines and Malaysia.
Outbound travel growth tends to be higher than real GDP growth for emerging markets compared to developed markets (except for Japan) where outbound travel growth is much closer to their forecasted real GDP growth.
Emerging markets such as Myanmar (10.6% vs 7.7%), Vietnam (9.5% vs 6.2%), Indonesia (8.6% vs 5.7%), Thailand (4.8% vs 3.1%) and China (8.5% vs 6%) are expected to grow faster than real GDP.
Growth of outbound travel in relation to total number of households
By 2021, all developed markets in Asia-Pacific (except for Japan) will have a ratio of over 100% for outbound travel trips to total number of households.
It is worth noting that while a ratio of 100% means that on average each household has at least one person who makes a trip abroad each year, in practice it is more likely that a certain percentage of households make multiple trips overseas each year, implying that there are households that do not go abroad at all.
Households in Singapore (693.6%), Hong Kong (248.9%) and Taiwan (232%) have the highest propensity to travel abroad.
Forecasted top 10 fastest growing Asia Pacific markets by international outbound trips (2016-2021 CAGR), include:
1.Myanmar – 10.6%
2.Vietnam – 9.5%
3.Indonesia – 8.6%
4.China – 8.5%
5.India – 8.2%
6.Sri Lanka – 6.1%
7.Thailand – 4.8%
8.Philippines – 4.4%
9.South Korea – 3.8%
10. Australia/Singapore/Malaysia – 3.5%
Among emerging markets, Malaysia is expected to record the highest ratio of 198.7% by 2021, whereas India (7.3%), Bangladesh (7.4%), Myanmar (14.6%) and Indonesia (15.4%) are among the lowest, indicating strong growth potential for outbound travel in these markets over the next ten to twenty years, assuming an increasing propensity to travel is combined with a healthy increase in households.
About the report
For the record, the Mastercard’s Future of Outbound Travel in Asia Pacific Report considers China, India, Malaysia, Thailand, Indonesia, Philippines, Vietnam, Bangladesh, Myanmar and Sri Lanka to be the region’s emerging nations.
It presents an update of Asia-Pacific’s regional outlook of outbound travel from 2016 to 2021 at various household income ranges combined with a five-year forecast of household growth.
The data is taken from the 2011 to 2016 editions of the Mastercard Survey on Consumer Purchasing Priorities – Travel.
Data for outbound travel from 2013 to 2015 was taken from the national statistics boards of the relevant markets, and that for 2015 and 2016 were calculated using estimates from the 2016 edition of the Mastercard Asia Pacific Destinations Index.