Inbound tourism to fuel growth in Asean: Mastercard
A key contributor to the stellar economic growth of Southeast Asia over the last decade is the even faster growth of inbound tourism spending, according to a study by Mastercard.
The report “The Asean Opportunity: How City Planners and Governments Can Make Cities Even Smarter by Increasing Investments in Inbound Tourism Growth” found that cities which make strategic investments in inbound tourism growth will deliver a higher standard of living for residents, create greater financial inclusion, and jumpstart economic development.
With urbanisation taking place across Asean, it results in a larger workforce, higher demand for goods and services as well as increases in tourism-related inbound income, said the report. This leads to a rise in gross domestic product, as seen in Vietnam, Malaysia, and others in the region.
The benefits do not just applicable to major tourist destinations, but also to lesser-known locales.
For example, while capital cities in Asean like Bangkok and Kuala Lumpur continued to top the list for most international arrivals, destinations in Thailand such as Phuket, Pattaya and Chiangmai have also grown in popularity.
The report suggested that the growing volume of visitors to lesser-known destinations revealed how governments can invest in such lesser-known locales so as to more equitably spread the benefits and strains of tourism throughout the country.
Many leading destinations have already invested in infrastructure, but opportunities remain for ongoing innovation in areas such as crowd management and traveller experience to draw in new and repeat tourists. According to the report, these initiatives help to create new jobs, improve standards of living for residents and ultimately drive economic growth.
It noted that countries where there is particular opportunity to capitalise on inbound traveller experience to foster greater GDP growth include the Philippines, Singapore and Indonesia.
The report flagged growing areas of opportunity in travel, namely business travel and education.
Business travel has grown rapidly in Asean, and has outperformed the overall travel market over the past three years. The top 10 Asean cities that attract the most business travellers have all experienced double-digit growth in corporate expenditure, with Vietnamese cities Da Nang, Hanoi and Ho Chi Minh City occupying three of the top 10 spots.
Another key tourist segment that was identified is students. While Singapore remains the region’s education hub with more than triple the spend of the next destination, Vietnamese cities such as Hanoi, Khanh Hoa and Ho Chi Minh City logged the highest growth in inbound student expenditure in the past three years, due in part to the country’s recent boom in online education.
This influx of inbound travellers present an opportunity for Southeast Asian cities to diversity inbound spend beyond the leisure space, said the report.