Thursday 28 Mar 2024
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This article first appeared in The Edge Financial Daily on September 27, 2017

SINGAPORE: Mastercard Inc is forecasting the number of tourists visiting Kuala Lumpur this year to grow 7.2% from 11.28 million last year. Tourist expenditure in the city is also projected to rise 4.5% from US$7.22 billion (RM30.4 billion).

“KL is a leader among Asia-Pacific countries for leisure tourism as 92.2% of visitors who entered the city in 2016 did so for leisure purposes,” said Eric Schneider, senior vice president for Asia-Pacific at Mastercard Advisors, the business services arm of the global payments company.

“The rise of leisure and business travel across the region presents a vital imperative for governments and private stakeholders to invest in smart networks and infrastructures,” added Schneider.

He was speaking at a media briefing here yesterday in conjunction with the release of Mastercard’s Global Destination Cities Index (GDCI) 2017.

Schneider said inbound tourism in Asia-Pacific countries has contributed significantly to their respective gross domestic product (GDP) rates. Kuala Lumpur’s tourist expenditure contributed about 6% to its GDP in 2016, while Singapore’s tourist expenditure made up 5.4% of its GDP in the same year.

“[Tourist] expenditure is a significant part of the respective countries’ GDP, and this [trend] will keep on going.”

Globally, tourist expenditure in Dubai ranks among the highest, at 26.3% of its national GDP. Bangkok comes in second at 12.2% contribution to GDP.

Launched in 2011, the GDCI ranks 132 top destination cities, analysing international visitor volume and expenditure.

Mastercard found that Asia-Pacific destinations raked in US$91.16 billion in travel expenditure in 2016, outperforming European and North American destinations, at US$74.74 billion and US$55.02 billion respectively.

Bangkok registered the most international overnight tourists in 2016, with 19.41 million, and the number is expected to grow by 4% this year.

Kuala Lumpur ranked eighth on the list of highest international overnight visitors in 2016, with the majority of inbound travellers coming from China at 15.2%, followed by Thailand (11.2%), Indonesia (10.9%), Singapore (10.6%)and India (6.4%).

Schneider attributes the growth in tourism, particularly in the Asia-Pacific region, to increased flight and travel connectivity, relaxation of visa regulations, weakening of Asian currencies, as well as the increase in Chinese outbound travellers since 2009.

“Chinese outbound tourists now make up a large majority of the tourist origin markets in the Asia-Pacific, and it is unlikely this trend will diminish anytime soon,” Schneider said.

The GDCI reveals that for 2016, across the top five destination cities by international overnight visitors in Asia-Pacific, the most number of inbound tourists came from China.

Tourists from China made up 34.3% of Bangkok’s visitors, 17.5% of Singapore’s visitors, 20.3% of Tokyo’s visitors, and 47.7% of Seoul’s visitors.

Schneider opines that China is moving from a more capital intensive economy to one that is more consumer-based, so outbound travel from the country is expected to continue rising.

He added that other emerging tourist origin markets to look out for would be India, the Philippines and Indonesia.

“India is quickly growing to become [a large contributor] to the inbound tourist market in Asia-Pacific countries because of its rapidly growing economy, which sees about 6% GDP growth year-on-year.”

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