Latest MasterIndex of Travel Forecasts Slowdown in Growth of Outbound Travel Across Asia Pacific in 1H 2007

MasterCard Worldwide has announced the results of its latest MasterIndex of Travel report, predicting a slowdown in growth of outbound travel across the Asia Pacific region in the first half of 2007.

While markets across Asia Pacific continue to see growth in outbound travel, with China (12%), Malaysia (7.8%) and Thailand (7.2%) experiencing the highest year-on-year growth, the rate of growth across most markets in Asia Pacific have dropped compared to the previous survey.

“This near term outlook of outbound travel appears to be consistent with our long term view of a massive expansion of overseas travel in Asia in the coming decade. Some marginal slowdown in growth in some markets is to be expected. The important thing to note is that growth momentum remains intact,” observed Dr. Yuwa Hedrick-Wong, economic advisor to MasterCard Worldwide in Asia Pacific.

Markets seeing the greatest slowdown in the rate of growth in outbound travel are Hong Kong, Korea and Malaysia. Hong Kong’s rate of growth of outbound travel is expected to slow down significantly from a robust 15% (seen in the previous survey for the second half of 2006) to a less optimistic 4.5%. For Korea and Malaysia, a slowdown in their year-on-year growth from a previously recorded 9% and 12.5% respectively, to 3.6% and 7.8% respectively, is predicted for the first half of 2007.

Mirroring the earlier forecast in the second half of 2006, Malaysia is expected to continue to take the lead in the number of outbound travelers (including visitors to Singapore). Over 21.5 million outbound visits are expected to be made by Malaysians for work and  leisure from January to June 2007. Key markets that stand to benefit from the continued increase in Malaysians traveling overseas include Singapore, China, Indonesia and Hong Kong.

Released twice a year, the MasterIndex of Travel also includes a survey of business and personal travel trends among the urban middle class across 13 markets (Australia, China, Hong Kong, Indonesia, Japan, Korea, Malaysia, New Zealand, the Philippines, Singapore,  Taiwan, Thailand and Vietnam). Intra-regional travel for pleasure continues to increase, with 39% of the consumers polled having traveled internationally over the past 12 months. Business travel remained constant at 19%.

Personal travelers continued to name destinations in Asia Pacific (82% vs. 83% six months ago) as their top choice for personal travel, with an increasing number of respondents now also preferring to travel to destinations in North America (27% vs. 18% six months ago). Similarly, for business travelers, destinations in Asia Pacific (87% vs. 88%) emerged as being the most frequented, compared to destinations in America (13% vs. 11%) and Europe (12% vs. 12%).

In terms of business travel, a greater number of business travelers (35% vs. 31% six months ago) said they needed to travel more compared to the previous period. Of the 13 markets, business travelers in Vietnam (73%), Japan (50%), Australia (47%) and New Zealand (43%) felt this need for increased travel. "We have observed for some time that better IT connectivity seems to create more, not less, need for direct face-to-face contacts in business development in Asia; hence the growth in business travel has risen hand-in-hand with the expanding power of IT,” added Dr. Hedrick-Wong.

A total of 5,405 consumers from 13 markets participated in the survey (with Vietnam as the additional market included in the survey component). Fieldwork was conducted between 11 October and 30 October 2006, with a sample of 400 or more consumers in each of the markets.

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