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Knowledge Leadership

MasterCard Insights
1Q 2014
The Future of Outbound Travel in Asia/Pacific
by Desmond Choong and Yuwa Hedrick-Wong
1 MasterCard Insights
The Future of Outbound Travel
in Asia/Pacific
by Desmond Choong
and Yuwa Hedrick-Wong
Introduction
Outbound travel has been growing strongly in recent
years.
1
Asia/Pacific, which has been traditionally a re-
gion known for its attractive destinations for interna-
tional visitors, is also fast becoming a leading source of
outbound travel. This report presents the Asia/Pacific
regional outlook of outbound travel to 2020. Fourteen
markets in Asia/Pacific are covered in the report, an
even split between developing markets and developed
economies. The emerging markets are China, India,
Malaysia, Thailand, Indonesia, Philippines, and Viet-
nam. The developed economies are Japan, South
Korea, Taiwan, Hong Kong, Singapore, Australia and
New Zealand.
Combining real GDP growth projections, household
distribution by income brackets, and survey data on
propensity for outbound travel by household in-
comes; a proprietary model has been constructed to
project outbound travel trips per household by income
brackets in each of the fourteen markets to 20202.
These projections in turn made possible estimations of
household income threshold above which outbound
travel begins to take off. In addition, the top aspira-
tional destinations for outbound travelers from these
markets are also identified. Together, they form a re-
gional picture of how much outbound travel originat-
ing from Asia/Pacific will grow, distribution of
outbound travelers by household incomes, and where
they aspire to visit, both within the region as well as
outside of the region.
Table 1. 2014-2020 Outbound Travel Forecast
Trip Type Outbound trips (mn)
3
2011
Key: LPO - Leisure Purpose Trips Only, AP - All Purpose Trips
LPO
(ex. same-day trips to HK & Macau)
LPO
(ex. all HK and Macau)
AP
AP
LPO
AP
(ex. cross border overland to Singapore)
AP
AP
(ex. cross border overland to Malaysia)
AP
(ex. non-air travel to China & Macau)
LPO
(ex. Singapore and Malaysia same-day)
LPO
AP
(ex. same-day trips to Malaysia & Laos)
AP
(ex. overland border crossing to China)
LPO
LPO
Using China LPO
(ex. same-day trips to HK & Macau)
China
China (ex HK & Macau trips)4
South Korea
Japan
India
5
Malaysia
Taiwan
Singapore
Hong Kong
Indonesia
Australia
Thailand
Vietnam
Philippines
New Zealand
Total - 14 markets
Asia/Pacific Developed Markets
Asia/Pacific Emerging Markets
42.6
21.7
12.7
17.0
5.8
8.9
8.8
7.8
7.1
4.9
6.5
5.4
2.8
3.0
1.7
134.9
61.5
73.4
Regional Overview
Collectively, the 14 Asia/Pacific markets are expected to
grow by an annual growth rate of 7.9% over the fore-
cast period of 2014-2020. The largest outbound mar-
kets in 2020 will be China, followed by South Korea
and Japan. Even if one excludes all trips to Hong Kong
and Macau (which are technically domestic trips as they
are both parts of China), Mainland China outbound re-
mains the largest in Asia/Pacific in 2020, more than
four times of that of South Korea which is the second
largest market.
Currently Japan outbound is the second largest in
the region but South Korea is projected to overtake it
sometime in 2019. Similarly, if the forecasted growth
rates persist past 2020, then India will in turn overtake
South Korea to be the second largest outbound market
by 2022.
Emerging Asia/Pacific currently has about one and a
half times more outbound trips than developed Asia/Pa-
cific (mostly due to China). And it will also grow by
more than twice as fast as developed Asia (10.1% ver-
sus 3.9%) over the forecast period. Table 1 summarizes
the actual growth rates from 2010 to 2013, and the
growth projections to 2020 for the 14 Asia/Pacific mar-
kets.
Q1 2014 2
2012
50.5
27.3
13.7
18.5
6.4
9.6
9.4
8.0
7.8
5.4
6.9
5.7
3.4
3.2
1.7
150.3
66.1
84.1
2013
61.1
34.3
15.0
17.1
7.2
10.4
10.4
8.5
8.6
6.1
7.4
6.0
3.9
3.5
1.8
166.8
68.8
98.1
2014
71.2
40.0
15.5
17.3
7.9
10.9
10.6
8.7
8.7
6.8
8.1
6.2
4.3
3.8
1.9
181.7
70.6
111.1
2020
134.0
84.8
19.2
18.4
16.5
15.2
14.2
11.8
11.6
10.6
10.0
8.7
6.4
6.2
2.3
286.3
88.7
197.5
11.1%
13.3%
3.7%
1.1%
13.0%
5.7%
5.1%
5.3%
4.9%
7.6%
3.7%
5.9%
6.7%
8.7%
3.3%
7.9%
3.9%
10.1%
2014-2020
CAGR (Adjusted)
Note: Due to rounding, numbers presented throughout this document may not add precisely to the totals provided and percentages may
not precisely reflect the absolute figures.
Chart 1 locates the positions of each of the 14
Asia/Pacific markets in the two-dimensional space com-
bining real GDP growth rates (the vertical axis) and the
growth rates of outbound travel (the horizontal axis).
India is the fastest growing outbound market at 13%
over the forecast period, followed by China at 11.1%
excluding trips to Hong Kong and Macau, (but China
would have a faster growth rate than India at 13.3% if
trips to Hong Kong and Macau are excluded). In the
third place is Philippines at 8.7% and in fourth place
Indonesia at 7.6%. The fastest growing developed mar-
kets are Singapore (5.3%), Taiwan (5.1%) and Hong
Kong (4.9%). It is interesting to note that these three
markets are also the smallest in geographic size among
the 14 markets covered, suggesting that limited com-
petition from domestic tourism destinations adds to the
overall size of international outbound demand.
Chart 1 also shows that outbound travel is generally
growing faster than real GDP except in the case of
Japan and South Korea where outbound travel is grow-
ing at almost the same pace as real GDP. A quick glance
at Chart 1 also reveals that in general the difference be-
tween outbound travel growth and real GDP growth
tends to be higher (below the diagonal line) for devel-
oping markets (except for Malaysia) and tends to be
lower (hugging or close to the diagonal line) for devel-
oped markets.
3 MasterCard Insights
Chart 1. Outbound Travel Growth versus Real GDP Growth
0% 2% 4% 6% 8% 10% 12% 14% 16%
JP
Outbound Trip Growth Rate <
Real GDP Growth
16%
14%
12%
10%
8%
6%
4%
2%
0%
Real GDP Growth
2014-2020
Outbound Trip Growth
2014-2020
Bubble Size = 2020
Outbound Trips
O
u
t
b
o
u
n
d

T
r
i
p

G
r
o
w
t
h

R
a
t
e

=

R
e
a
l

G
D
P

G
r
o
w
t
h
Outbound Trip
Growth Rate >
Real GDP
Growth
AU
KR
NZ
TW
HK
SG
MY
TH
VN
PH
I D
CN
I N
In addition to estimating the overall growth rates of
outbound travel trips, it is also important to understand
the growth of outbound travel in relation to the dy-
namics of changing numbers of households as well as
household incomes in these markets. Table 2 summa-
rizes the changing ratios of outbound trips to numbers
of households in recent years. Apart from Japan, all the
developed markets have a ratio of 100% or above in
2020. While a ratio of 100% means on average that
each household has one person who makes a trip
abroad each year, in practice it is more likely that a cer-
tain percentage of households make multiple trips over-
seas each year, and the remaining households do not
go abroad at all. The ratios for Singapore, Hong Kong
and Taiwan are much larger than 100% and not coin-
cidentally are also the fastest growing developed mar-
kets for outbound trips.
Among the emerging markets, Indias ratio of 3% of
outbound leisure trips to total households in 2014 is
startlingly low, even with a forecasted improvement of
almost double to 5.8% in 2020. The ratio is the lowest
in Asia/Pacific and about three times smaller than the
next lowest (Indonesia at 10.7% in 2014 improving to
15.6% in 2020). If India had exactly the same ratio as
Indonesia, then Indian outbound leisure travel would
be 28.2 million trips in 2014 (instead of 7.9 million trips)
and 44.4 million trips in 2020 (instead of 16.5 million
trips). It suggests the enormous potential for Indian out-
bound leisure travel over the next 10-20 years as the
ratio starts to approach those of the other developing
markets.
Q1 2014 4
Table 2. Number of Outbound Travel Trips as Percentage of Total Number of Households
Trip Type
Outbound trips as %
of total households
2011
LPO
(ex. same-day trips to HK & Macau)
LPO
(ex. all HK and Macau)
AP
AP
LPO
AP
(ex. cross border overland to Singapore)
AP
AP
(ex. cross border overland to Malaysia)
AP
(ex. non-air travel to China & Macau)
LPO
(ex. Singapore and Malaysia same-day)
LPO
AP
(ex. same-day trips to Malaysia & Laos)
AP
(ex. overland border crossing to China)
LPO
LPO
Using China LPO
(ex. same-day trips to HK & Macau)
9.9%
5.1%
68.9%
34.4%
2.2%
143.9%
118.2%
548.4%
283.7%
8.1%
75.9%
31.1%
14.5%
16.1%
100.3%
15.0%
68.8%
9.1%
2012
11.7%
6.3%
73.8%
37.4%
2.5%
150.4%
125.8%
546.4%
305.9%
8.6%
78.4%
32.8%
17.2%
16.9%
101.9%
16.6%
73.4%
10.3%
2013
14.0%
7.9%
80.2%
34.7%
2.7%
161.0%
139.3%
562.3%
332.5%
9.7%
83.1%
34.2%
19.5%
17.9%
103.5%
18.2%
76.1%
11.9%
2014
16.3%
9.1%
82.3%
35.0%
3.0%
165.5%
141.0%
566.1%
334.9%
10.7%
89.1%
35.0%
21.4%
19.0%
106.8%
19.7%
78.0%
13.4%
2020
29.7%
18.8%
99.6%
37.7%
5.8%
211.7%
188.2%
696.4%
427.8%
15.6%
102.8%
48.8%
30.0%
28.3%
122.4%
29.7%
96.7%
22.6%
Key: LPO - Leisure Purpose Trips Only, AP - All Purpose Trips
China
China (ex HK & Macau trips)
South Korea
Japan
India
Malaysia
Taiwan
Singapore
Hong Kong
Indonesia
Australia
Thailand
Vietnam
Philippines
New Zealand
Total - 14 markets
A/P Developed Markets
A/P Emerging Markets
Japan is an anomaly among the developed markets
with an outbound trip to household ratio of only 37.7%
in 2020. Japans ratio has never breached 40% from
the statistics we have seen since 1970 which is only six
years after outbound travel in Japan was deregulated
in 1964. In comparison, the ratio for South Korea is es-
timated at almost 100% in 2020. Some reasons given
by the Japan Tourism Marketing Co. for lackluster
Japanese outbound travel is that the structural change
in Japanese society owing to a declining population, a
stagnant economy, natural disasters within Japan, and
a series of negative external events since 2001 (SARs,
Indian Ocean Tsunami, Twin towers bombing, Global Fi-
nancial Crisis) has sapped the motivation for outbound
travel. Japanese consumer confidence levels since the
1990s seems to concur with this view as shown in Chart
2: Japanese consumer confidence has been consistently
pessimistic and below the other Asia/Pacific developed
market average except for the period between 2005
and 2007, and more recently in the first half of 2013.
Another supporting statistic of this trend is that the
number of valid Japanese passports issued has been de-
clining since 2005 from about 35 million to about 31
million in 2010. Finally, it is worthwhile noting that
Japan has an excellent domestic tourism product
(ranked 14th in the world by the World Economic
Forum) which competes with outbound international
travel (domestic tourism in Japan accounting for 90 to
95% of total travel).
5 MasterCard Insights
Chart 2. MasterCard Consumer Confidence Index: Japan and Developed Asia/Pacific Compared
100
90
80
70
60
50
40
30
20
10
0
H1
1993
Optimism Japan Asia/Pacific Developed
Pessimism
H1
1994
H1
1995
H1
1996
H1
1997
H1
1998
H1
1999
H1
2000
H1
2001
H1
2002
H1
2003
H1
2004
H1
2005
H1
2006
H1
2007
H1
2008
H1
2009
H1
2010
H1
2011
H1
2012
H1
2013
Optimism
Pessimism
Japan Asia/Pacific Developed
Table 3 shows how outbound trips are dispersed
across households by using a concentration ratio which
is simply the percentage of outbound trips taken by a
specific household income range divided by the per-
centage of total households in that income range. For
example, if 10% of all outbound trips are accounted
for by 10% of households in a paticular income range,
then the concentration ratio is 1, suggesting an even
distrbution of outbound trips among households within
the income range. Thus, as seen in Table 3, households
with incomes over US$15,000 in Taiwan have a propen-
sity for travel similar to the population at large; whereas
Indian households with incomes over US$10,000 have
a propensity for outbound travel ten times higher than
the population at large.
Q1 2014 6
Table 3. Outbound Trip Concentration Among the Higher Household Income Brackets
OB trips of range
as % of total
trips = A
HH in range
as % of total HHs
= B
Concentration
Ratio (= A/B)
GDP per capita
US$ 2014
HH Income
Range
Taiwan
Hong Kong
Singapore
Australia
Japan
New Zealand
South Korea
Malaysia
Vietnam
Philippines
Thailand
Indonesia
China
India
>US$15k
>US$20k
>US$30k
>US$45k
>US$45k
>US$40k
>US$25k
>US$15k
>US$5k
>US$10k
>US$10k
>US$10k
>US$10k
>US$10k
95.1%
90.6%
86.1%
95.2%
85.5%
89.2%
90.5%
87.0%
80.5%
72.7%
88.5%
97.3%
92.8%
96.3%
91.7%
85.5%
77.4%
85.6%
73.8%
71.0%
64.7%
62.0%
37.5%
33.7%
39.9%
33.6%
26.4%
8.9%
1.0
1.1
1.1
1.1
1.2
1.3
1.4
1.4
2.1
2.2
2.2
2.9
3.5
10.8
22,002.03
41,420.59
53,670.98
62,127.16
41,149.60
41,806.73
25,188.93
10,651.95
2,063.76
2,938.13
6,165.62
3,432.37
7,137.89
1,389.20
A concentration ratio of "1" therefore denotes that
outbound trips are perfectly distributed across the
household income brackets. As the ratio increases, the
more concentrated outbound trips are among the
higher income households. As illustrated in Chart 3,
the developed markets have a ratio between 1.0 (Tai-
wan) and 1.4 (South Korea) implying that outbound
travel is quite evenly spread across the household in-
come brackets. Among emerging markets, however, it
ranges from outbound travel being quite evenly spread
(Malaysia at 1.4) to being extremely concentrated
among the higher income households as in the case of
India at 10.8.
7 MasterCard Insights
Chart 3. Relating GDP per Capita to Concentration Ratio
11.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
$0 $10k $20k $30k $40k $50k $60k $70k
Ratio of
Outbound Trips
to HHs
Ratio of Concentration of Outbound Trips
to Household by Income Against GDP per Capita
Share of outbound trips getting more
concentrated at richer households
At 1.0, trips are perfectly distributed across households
GDP per Capita (US$ 2014)
KR
TW
MY
VN
TH
PH
ID
CN
IN
NZ
JP
HK
SG AU
The household propensity for outbound interna-
tional leisure travel can also be analyzed in terms of
changing household incomes. As shown in Chart 4, at
household income of US$30,000 and above, the aver-
age propensity curves for developing and developed
markets follow a similar trajectory although the peaks
of the curves are different (i.e. higher for developed
markets). What is interesting is the shape of the curves
below US$30,000. In the range of household income
between US$10,000 and US$30,000, the gap in the
propensity for outbound travel steadily narrows, sug-
gesting that in this income bracket, households in de-
veloping markets are rapidly catching up in their
propensity for outbound travel with their counterparts
in developed markets. But the gap opens up again be-
yond the US$30,000 income level. For the developing
market households the inflection point is around the
US$10,000 mark after which the propensity for inter-
national leisure travel rises rapidly till the US$30,000
level. This inflection point suggests that US$10,000
household income is the threshold level of international
outbound leisure travel for the developing Asia/Pacific
markets.
Q1 2014 8
Chart 4. The Income Threshold of International Travel for Leisure
80%
70%
60%
50%
40%
30%
20%
10%
0%
Developed Country Average Emerging Asia Average
140-
150k
120-
130k
90-
100k
70-
80k
50-
60k
40-
45k
30-
35k
20-
25k
10-
15k
2.5-
5k
5-
10k
<2.5k 130-
140k
15-
20k
25-
30k
35-
40k
45-
50k
60-
70k
80-
90k
100-
120k
>150k
Propensity
to Travel
Propensity for Travel Internationally for Leisure by Household Income (US$)
Household Income (US$)
Over 2012 and 2013, MasterCard surveyed over
22,000 people across 14 markets in Asia/Pacific to
gauge their aspirational destinations for their outbound
travel around the world. Without being prompted, they
were asked which destinations they would visit if cost
were not an issue. Table 4 summarizes the results of
the top 20 aspirational destinations of the 14 Asia/Pa-
cific markets.
The destinations were identified in terms of both
cities and countries. For example, some respondents
chose London as their top aspirational travel destina-
tion, whereas others chose UK. And others even chose
Europe as their aspirational destination. So the list is a
mix of cities, countries and regions. But these destina-
tions can also be grouped into city-country combina-
tions (e.g. London-UK and Paris-France) to re-calculate
their attractiveness to travelers from Asia/Pacific. For
developed Asia/Pacific travelers, the Paris (#1) - France
(#14) combination, ties with the New York (#2) - USA
(#5) combination at 10.1% each of the aspirational
mindshare. Together with London (#3) - UK (#9) com-
bination at 8.5%, Tokyo (#7) - Japan (#4) combination
at 7.0%, and Rome (#6) - Italy (#16) combination at
4.5%, these top five city-country combinations ac-
count for 56.3%of the total mindshare. Asia/Pacific
destinations represented in the top 20 make up 14.1%
of mindshare which the fourth ranked Tokyo-Japan
combination accounts for half at 7.0%. The next high-
est Asia/Pacific destination is Australia (#8) with less
than half (2.4%) of the Tokyo-Japan combination as-
pirational mindshare. This bodes well for Japan which
just hit 10 million foreign arrivals for 2013 (a record)
on the back of a weakened yen and relaxing of travel
visa restrictions for inbound visitors. The government
plans to double the number of visitors to 20 million by
2020 (which coincidentally is also the year that Tokyo
hosts the Olympic Games).
The developing Asia/Pacific traveler list of top 20
aspirational destinations also features Paris, London
and New York in the top ranks but what is interesting
is that Asia/Pacific destinations have a much stronger
representation with 28.5% of aspirational destinations
within the top 20 list. Singapore which did not even
appear in the top 20 developed Asia/Pacific list ranks
number two in the developing market list. The Tokyo
(#5) - Japan (#7) combination is unique in that it ranks
9 MasterCard Insights
Table 4. Top 20 Aspiration Destinations
Paris
New York
London
Japan
USA
Rome
Tokyo
Australia
UK
Hawaii
1
2
3
4
5
6
7
8
9
10
8.5%
7.0%
6.7%
4.1%
3.1%
3.0%
2.9%
2.4%
1.8%
1.8%
Europe
Los Angeles
Hong Kong
France
Sydney
Italy
Switzerland
S. Korea
Maldives
Canada
11
12
13
14
15
16
17
18
19
20
1.7%
1.7%
1.7%
1.6%
1.6%
1.5%
1.5%
1.5%
1.2%
1.1%
Top 20 account for 56.3% of total
Of which Asia/Pacific Destinations 14.1%
Top 20 Aspiration Destinations of Developed Asia/Pacific Travelers
very highly in both lists (7.2% in the developing mar-
kets top 20 and 7.0% developed markets top 20) with
almost the same percentage. One reason for the
stronger showing of Asia/Pacific destinations within the
developing markets top 20 aspirational list is the rela-
tive immaturity of outbound travel in these developing
markets. Two cases in point are the top 20 list of In-
donesian residents which features Singapore and Kuala
Lumpur (both short haul destinations) in the top five,
and the top 20 list of Vietnam residents which have
Singapore and Bangkok (both also short haul destina-
tions) in the top six. The appearance of highly ranked
aspirational yet short haul destinations illustrates the
relative immaturity of the Indonesian and Vietnamese
outbound travel market, as a mature market would
have realized the short haul aspirational destinations
earlier in the development cycle (i.e. short haul desti-
nations would not be aspirational in a mature market
as they are the first to be realized after which they stop
being aspirational).
The appearance of domestic destinations in the in-
dividual top 20 lists of India (Mumbai, Delhi, Goa and
Srinagar) and Japan (Okinawa, Kyoto and Hokkaido)
may go some length to explain why Japan and India
have the lowest propensity to travel internationally
among the developed and developing Asia/Pacific mar-
kets respectively (none of the other 12 markets feature
any domestic locations within their top 20 aspirational
list). In fact of the top 50 aspirational destinations for
India, 21 of them are domestic and account for 17% of
aspirational destination mindshare. It suggests that
there is still a pent up demand for domestic travel
which competes with international travel for the over-
all household travel budget. In the case of Japan, it may
explain in part why the propensity for international
travel has a lower trajectory rate as one moves higher
along the income brackets compared to South Korea
which has no domestic locations within its list of aspi-
rational destinations. Similarly it may explain why
India's propensity for international outbound leisure
travel rises much more slowly after the US$10,000 in-
flection point compared to China (which shares the
same inflection point).
Q1 2014 10
Paris
Singapore
London
New York
Tokyo
USA
Japan
Hong Kong
Australia
Sydney
1
2
3
4
5
6
7
8
9
10
8.4%
6.0%
5.7%
4.3%
4.1%
3.3%
3.1%
3.0%
2.9%
2.2%
Seoul
Rome
Maldives
France
Switzerland
South Korea
New Zealand
Bangkok
Malaysia
Canada
11
12
13
14
15
16
17
18
19
20
1.8%
1.8%
1.8%
1.6%
1.6%
1.5%
1.3%
1.3%
1.2%
1.2%
Top 20 account for 58.2% of total
Of which Asia/Pacific Destinations 28.5%
Top 20 Aspiration Destinations of Developing Asia/Pacific Travelers
11 MasterCard Insights
Market Details
Philippines
International outbound leisure travel trips by residents
of the Philippines are estimated at 3.8 million in 2014
and are forecasted to grow by an average of 8.7% per
year to reach 6.2 million trips by 2020. Total outbound
trips will grow about five times faster than total house-
hold growth (8.7% versus 1.7%) over the forecast pe-
riod resulting in a ratio of outbound trips to households
that is projected to reach 28.3% in 2020 from 19% in
2014.
Breaking down outbound trips by household in-
come, households earning above US$10,000 per
annum (which make up 34% of all households) will
generate about 73% of all outbound international
leisure trips in 2014. Projecting forward to 2020, the
higher levels of outbound travel growth will come from
the households earning above US$10,000 (34% of
households are in this category and they account for
73% of all outbound travel). The primary driver for this
is that the number of households earning above
US$10,000 are also growing much faster than the
number of households earning below US$10,000.
The propensity to travel by household income ex-
hibits a point of inflection at the US$15,000 household
income threshold, where households earning above
US$15,000 per year exhibit a propensity for outbound
leisure travel that is more than twice that of households
earning below US$15,000.
Table 5. Philippines
Outbound
Leisure purpose
trips only
2011 2012 2013e 2014e 2020f
2014-2020
CAGR
Outbound trips (mn)
Households (mn)
Total outbound trips
as percentage
of total households
3.0
18.4
16.1%
3.2
19.1
16.9%
3.5
19.5
17.9%
3.8
19.8
19.0%
6.2
21.9
28.3%
8.7%
1.7%
Q1 2014 12
In terms of aspirational destinations, Paris takes top
position, followed by the medium and short haul des-
tinations of Singapore and Hong Kong. The percent-
age of Philippine residents who have selected Hong
Kong as an aspirational destination (5.8%) is the high-
est among the 14 Asia/Pacific economies; similarly the
selection of Singapore (6.3%) is the second highest
(after Vietnam at 9.9%) among the 14 Asia/Pacific
markets.
2.0
1.5
1.0
0.5
0.0
Chart 5. Philippines: Propensity for International Leisure Travel
and Average Number of Trips per Outbound Household by Household Income (US$)
32%
15% 14%
11%
8%
2014: Average number of trips per outbound household (LHS)
Propensity to travel (RHS)
<2.5k >25k
35%
2.5-
5k
5-
10k
10-
15k
15-
25k
0.4
0.6
0.8 0.8
1.7
1.9
40%
35%
30%
25%
20%
15%
10%
5%
0%
13 MasterCard Insights
Thailand
International outbound leisure travel trips by Thai resi-
dents are estimated at 6.2 million in 2014, and are
forecasted to grow by an average of 5.9% per year to
reach 8.7 million trips by 2020. As overall household
growth is expected to remain stagnant over the fore-
cast period, the ratio of outbound trips to total house-
holds is projected to reach 48.8% in 2020 from 35%
in 2014.
In Thailand about 88% of outbound trips are ac-
counted for by households earning above US$10,000
per annum in 2014. This income range accounts for
about 40% of all households. Projecting forward to
2020, the higher levels of outbound travel growth will
come from the households earning above US$15,000
(25% of households are in this category and they ac-
count for 75% of all outbound travel). The primary
driver for this is that the number of households earn-
ing above US$15,000 is also growing much faster than
the number of households earning below US$15,000.
The propensity to travel by household income ex-
hibits a point of inflection at US$10,000 household in-
come levels at which we see a steeper increase in the
propensity to travel.
Table 6. Thailand
All Purpose Outbound trips
(includes same-day
cross-border travel to
Malaysia and Laos)
2011 2012 2013e 2014e 2020f
2014-2020
CAGR
Outbound trips (mn)
Households (mn)
Total outbound trips
as percentage
of total households
5.4
17.3
31.1%
5.7
17.5
32.8%
6.0
17.5
34.2%
6.2
17.6
35.0%
8.7
17.8
48.8%
5.9%
0.2%
Q1 2014 14
Chart 6. Thailand: Propensity for International Leisure Travel
and Average Number of Trips per Outbound Household by Household Income (US$)
In terms of aspirational destinations, Tokyo and
Japan take the top two positions. When combined they
account for about 20% of the mindshare for aspira-
tional destinations among Thai households. Paris and
France have a combined mindshare of 8.1%. This is fol-
lowed by the Seoul -South Korea combination at 9.3%,
then the London-UK combination at 7.5%. These top
four combinations account for about 45% of aspira-
tional destination mindshare.
Given the relative proximity of Japan (6 hours flight
time) and South Korea (5 hours) to Thailand versus Lon-
don (12 hours) and Paris (12 hours), we see Japan and
South Korea clearly benefiting much more from any
growth of outbound Thai travel (resulting from the
growth of household disposable income) over London
and Paris. That is to say it would be relatively easier for
Thai travellers to realize their aspirations for travel to
the Seoul-Korea and Tokyo-Japan over the London-UK
and Paris-France combinations.
The percentage of Thai residents who have selected
the Tokyo-Japan combination as an aspirational desti-
nation (19.5%) is the highest (Taiwan is second with
14.6%) among the 14 Asia/Pacific markets. Interest-
ingly, Thailand is the only South East Asian outbound
market that did not select Paris as their number one
aspirational destination.
2014: Average number of trips per outbound household (LHS)
Propensity to travel (RHS)
3.0
2.5
2.0
1.5
1.0
0.5
0.0
0.4 0.4
0.9
1.2
1.6
1.9
2.0 2.0
2.3
2.4 2.4
5-
10k
10-
15k
15-
20k
20-
25k
25-
30k
30-
35k
35-
45k
45-
70k
70-
130k
<5k >130k
100%
80%
60%
40%
20%
0%
87%
85%
81%
70% 70%
68%
58%
42%
33%
16%
15%
15 MasterCard Insights
Malaysia
International outbound leisure travel trips by Malaysian
residents are estimated at 10.9 million in 2014, and are
forecasted to grow by an average of 5.7% per year to
reach 15.2 million trips by 2020. Total outbound trips
will grow about 4 times faster than total household
growth (5.7% versus 1.5%) over the forecast period
resulting in a ratio of outbound trips to households that
is projected to reach 211.7% in 2020 from 165.5% in
2014.
Breaking down outbound trips by household in-
come, about 87% of outbound trips are accounted for
by households earning above US$15,000 per annum
in 2014. About 62% of all Philippines households fall
into this income bracket. Dividing these percentages
(87% by 62%) yields a concentration ratio of 1.4. A
similar ratio calculated for Thailand and the Philippines
comes in at about 2.2. As mentioned above, India has
the highest ratio among the 14 markets at 10.8.
Projecting forward to 2020, the higher levels of
outbound travel growth in Philippines will come from
the households earning above US$30,000 (28% of
households are in this category and they account for
54% of all outbound travel). The primary driver for this
is that the number of households earning above
US$30,000 is also growing much faster than the num-
ber of households earning below US$30,000.
The propensity to travel by household income ex-
hibit a point of inflection occurring at the US$15,000
household income levels at which we see a steeper in-
crease in the propensity to travel.
Table 7. Malaysia
All Purpose
Outbound Trips
(excludes cross border land
travel to Singapore)
2011 2012 2013e 2014e 2020f
2014-2020
CAGR
Outbound trips (mn)
Households (mn)
Total outbound trips
as percentage
of total households
8.9
6.1
143.9%
9.6
6.4
150.4%
10.4
6.5
161.0%
10.9
6.6
165.5%
15.2
7.2
211.7%
5.7%
1.5%
Q1 2014 16
In terms of aspirational destinations, the Paris-
France combination is the most desired city-country
destination with 10.2% of mindshare, followed by the
London-UK combination at 9.8%, and Tokyo-Japan at
9.5%. In fourth and fifth position are the Seoul - South
Korea combination with 6.8% and the Sydney - Aus-
tralia combination with 6.2%. These five combinations
account for close to 42% of total aspirational mind-
share. What is interesting for the fourth and fifth
ranked combinations is that the country ranks higher
than the city which is the reverse of the top three. This
implies that the country has a stronger brand name
recognition among Malaysians than the city; in the case
of Paris (#1) and London (#2), the city brand name is
much stronger than the country (France-#29 and UK-
#14), while Tokyo (#3) is not much higher than Japan
(#4).
The percentage of Malaysian residents who have
selected the London- UK combination as an aspira-
tional destination (9.8%) is the highest among the 14
Asia/Pacific markets apart from Australia (12.6) and
New Zealand (11.6).
Given the relative proximity of Japan (7 hours) and
Sydney (8- 9 hours) to Malaysia versus London (13-14
hours) and Paris (13-14 hours), Japan and South Korea
could clearly benefit much more from any growth of
outbound Malaysian travel (resulting from the growth
of household disposable income) over London and
Paris. That is to say it would be easier for Malaysians to
realize their aspirations for travel to Australia and Japan
over UK and France.
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
100%
80%
60%
40%
20%
0%
5-
10k
Chart 7. Malaysia: Propensity for International Leisure Travel
and Average Number of Trips per Outbound Household by Household Income (US$)
<5k >70k
1.3
30%
1.4
33%
10-
15k
1.7
40%
15-
20k
2.3
53%
20-
25k
2.6
59%
25-
30k
3.3
75%
30-
35k
3.6
82%
35-
45k
3.6
83%
45-
70k
3.7
85%
4.0
91%
2014: Average number of trips per outbound household (LHS)
Propensity to travel (RHS)
17 MasterCard Insights
Singapore
International outbound leisure travel trips by Singa-
porean residents are estimated at 8.7 million in 2014,
and are forecasted to grow by an average of 5.3% per
year to reach 11.8 million trips by 2020. Total out-
bound trips will grow about three times faster than
total household growth (5.3% versus 1.7%) over the
forecast period resulting in a ratio of outbound trips to
households that is projected to reach 696% in 2020
from 566.1% in 2014. Singaporean households have
the highest ratio of outbound trips to households
among the 14 Asia/Pacific markets. The lack of do-
mestic tourism is possibly a strong reason for such high
ratios.International outbound leisure travel trips by Sin-
gaporean residents are estimated at 8.7 million in
2014, and are forecasted to grow by an average of
5.3% per year to reach 11.8 million trips by 2020. Total
outbound trips will grow about three times faster than
total household growth (5.3% versus 1.7%) over the
forecast period resulting in a ratio of outbound trips to
households that is projected to reach 696% in 2020
from 566.1% in 2014. Singaporean households have
the highest ratio of outbound trips to households
among the 14 Asia/Pacific markets. The lack of do-
mestic tourism is possibly a strong reason for such high
ratios.
About 86% of outbound trips in Singapore are ac-
counted for by households earning above US$30,000
per annum in 2014. This range accounts for about
77.4% of all households and suggests that outbound
travel is quite evenly spread across income levels. The
concentration ratio is therefore 1.1 (86% by 77.4%)
which is the lowest (tied with Taiwan which is also at
1.1) among the 14 Asia/Pacific markets.
Projecting forward to 2020, growth of outbound
travel will come from the households earning above
US$100,000 (21% of households are in this category
and they account for 27% of all outbound travel). The
number of households earning above US$100,000 is
also growing much faster than the number of house-
holds earning below US$100,000.
The propensity to travel by household income ex-
hibits a linear type curve which is consistent with our
earlier observation that outbound travel by Singa-
porean residents is quite evenly spread across income
levels.
Table 8. Singapore
All Purpose Outbound trips
(excludes cross border land
travel to Malaysia)
2011 2012 2013e 2014e 2020f
2014-2020
CAGR
Outbound trips (mn)
Households (mn)
Total outbound trips
as percentage
of total households
7.8
1.4
548.4%
8.0
1.5
546.4%
8.5
1.5
562.3%
8.7
1.5
566.1%
11.8
1.7
696.4%
5.3%
1.7%
Q1 2014 18
Chart 8. Singapore: Propensity for International Leisure Travel
and Average Number of Trips per Outbound Household by Household Income (US$)
In terms of aspirational destinations, the Tokyo-
Japan combination at 8.6% is the most desired desti-
nation followed by the New York-USA combination at
8.7%, the Paris-France combination at 8.6%, and the
London-UK combination at 7.2%. In fifth and sixth po-
sition are the Seoul-South Korea combination with
5.9% and the Sydney-Australia combination with
4.9%. These six combinations account for close to
45% of total aspirational mindshare.
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
100%
80%
60%
40%
20%
0
5-
20k
20-
30k
30-
40k
40-
50k
50-
60k
60-
70k
70-
80k
80-
100k
100-
140k
<5k >140k
87%
85%
78%
75%
67%
62%
60%
7.5
7.4
7.2
6.6
6.4
5.6
5.3
5.1
88%
7.6
90%
7.9
93%
7.9
93%
2014: Average number of trips per outbound household (LHS)
Propensity to travel (RHS)
19 MasterCard Insights
Indonesia
International outbound leisure travel trips by Indone-
sian residents are estimated at 6.8 million in 2014, and
are forecasted to grow by an average of 7.6% per year
to reach 10.6 million trips per year by 2020. Total out-
bound trips will grow about seven times faster than
total household growth (7.6% versus 1.1%) over the
forecast period resulting in a ratio of outbound trips to
households that is projected to reach 15.6% in 2020
from 10.7% in 2014.
Breaking down outbound trips by household in-
come, households earning above US$15,000 per
annum constitute about 75% of the all outbound in-
ternational leisure trips in 2014, and at the same time
makes up only 18% of all households. Dividing these
percentages (75% by 18%) yields a concentration ratio
of 4.2 which presents a very skewed picture of out-
bound travel where a minority number of households
account for the lion's share of outbound travel. Among
the 14 Asia/Pacific markets covered Indonesia has the
second highest ratio (India is the highest at 10.8), fol-
lowed by China at 3.6. Projecting forward to 2020, the
higher levels of outbound travel growth will come from
the households earning above US$10,000 (34% of
households are in this category and they account for
97% of all outbound travel).). The primary driver for
this is that the number of households earning above
US$10,000 is also growing much faster than the num-
ber of households earning below US$10,000.
The propensity to travel by household income ex-
hibits a point of inflection at the US$40,000 household
income divider. The US$15,000 income level is the first
bracket in which household propensity to consumer
outbound travel rises above 10%. Propensity to con-
sumer outbound travel rises rapidly after US$40,000.
Table 9. Indonesia
Outbound Leisure
Purpose trips only
(excludes Singapore and
Malaysia same-day trips)
2011 2012 2013e 2014e 2020f
2014-2020
CAGR
Outbound trips (mn)
Households (mn)
Total outbound trips
as percentage
of total households
4.9
60.7
8.1%
5.4
62.1
8.6%
6.1
62.9
9.7%
6.8
63.6
10.7%
10.6
67.8
15.6%
7.6%
1.1%
Q1 2014 20
Chart 9. Indonesia: Propensity for International Leisure Travel
and Average Number of Trips per Outbound Household by Household Income (US$)
In terms of aspirational destinations, Paris is in first
place, followed by Singapore, and both account for
more than 10% of aspirational destination mindshare
with a combined 24.9% of total mindshare. This is fol-
lowed by London at 6.7%, then Kuala Lumpur at
5.6%, which is another short haul destination like Sin-
gapore. The percentage of Indonesian residents who
have selected Paris (13.1%) and Singapore (11.8%) as
alternative destinations is the highest among the 14
Asia/Pacific markets. Interestingly, only Indonesians se-
lected Kuala Lumpur (5.6%) as a top 20 aspirational
destination. (Indian residents are the only ones who se-
lected Malaysia (4.8%) as a top 20 aspirational desti-
nation).
It is interesting that none of the top 20 aspirational
destinations are countries for Indonesians (they are all
cities). The fact that Singapore and Kuala Lumpur are
in the top five illustrates the relative immaturity of the
market, as a mature market would have realized the
short haul aspirational destinations earlier in the out-
bound travel cycle. This would seem to bode well for
Singapore and Kuala Lumpur going forward as they
stand to benefit the most from any growth in out-
bound Indonesian travel.
100%
80%
60%
40%
20%
0%
2.5-
5k
5-
7.5k
7.5-
10k
10-
15k
15-
20k
20-
30k
30-
40k
40-
50k
50-
70k
70-
90k
90-
100k
<2.5k >100k
95%
90%
85%
70%
50%
25%
18%
14%
9%
5%
0.3
0.5
0.7
0.9
1.3
2.6
3.6
4.4
4.7
4.9
2% 2%
1%
0.1
2014: Average number of trips per outbound household (LHS)
Propensity to travel (RHS)
6.0
5.0
4.0
3.0
2.0
1.0
0.0
21 MasterCard Insights
Vietnam
International outbound leisure travel trips by Viet-
namese residents are estimated at 4.3 million in 2014,
and are forecasted to grow by an average of 6.7% per
year to reach 6.4 million trips by 2020. Total outbound
trips will grow about eight times faster than total
household growth (6.7% versus 0.8%) over the fore-
cast period resulting in a ratio of outbound trips to
households that is projected to reach to reach 30% in
2020 from 21.4% in 2014.
Households earning above US$5,000 per annum
constitute 81% of all outbound international leisure
trips in 2014 and at the same time makes up 37.5% of
all households. Projecting forward to 2020, the higher
levels of outbound travel growth will come from the
households earning above US$10,000 (11% of house-
holds are in this category and they account for 48% of
all outbound travel). The primary driver for this is that
the number of households earning above US$10,000
is also growing much faster than the number of house-
holds earning below US$10,000.
The propensity to travel by household income ex-
hibits a point of inflection at the US$15,000 household
income divider after which propensity to consumer
outbound travel rises rapidly.
Table 10. Vietnam
All Purpose Outbound trips
(excludes border crossing
to China on foot)
2011 2012 2013e 2014e 2020f
2014-2020
CAGR
Outbound trips (mn)
Households (mn)
Total outbound trips
as percentage
of total households
2.8
19.4
14.5%
3.4
19.8
17.2%
3.9
20.0
19.5%
4.3
20.2
21.4%
6.4
21.2
30.0%
6.7%
0.8%
Q1 2014 22
In terms of aspirational destinations, the Paris-
France combination ranks first with 13.3% of mind-
share. Singapore is in second place at 9.9%, and is
followed by the New York-USA combination with
9.6%. The Bangkok-Thailand combination is next with
9.1%, followed by the Tokyo-Japan combination with
8.3%, the London-UK combination at 8.1%, and the
Seoul-Korea combination at 5.9%. These seven desti-
nations account for 64% of total aspirational mind-
share. The percentage of Vietnams travelers who
selected Paris (11.9%) and Singapore (9.9%) as aspi-
rational destinations is second highest, after Indonesia,
among the 14 Asia/Pacific markets. Interestingly, only
the Vietnamese selected Bangkok-Thailand (9.1%) as a
top 20 aspirational destination.
Like Indonesia, the fact that Singapore and
Bangkok are in the top six illustrates the relative im-
maturity of the market, as a mature market would have
realized the short haul aspirational destinations earlier
in the outbound travel cycle (i.e. short haul destinations
would not be aspirational in a mature market as they
are easily realized). This bodes well for Singapore and
Bangkok going forward as they stand to benefit the
most from any growth in outbound Vietnamese travel
(resulting from the growth of household disposable in-
come).
100%
80%
60%
40%
20%
0%
2.5-
5k
Chart 10. Vietnam: Propensity for International Leisure Travel
and Average Number of Trips per Outbound Household by Household Income (US$)
10-
15k
15-
20k
20-
25k
25-
30k
30-
35k
35-
45k
45-
70k
70-
130k
<5k
>130k
69%
64%
51%
35%
25%
20%
10%
5.0
4.6
4.2
3.4
2.3
1.7
1.3
0.7
75%
5.4
81%
5.6
85%
5.7
86%
2014: Average number of trips per outbound household (LHS)
Propensity to travel (RHS)
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
23 MasterCard Insights
China
International outbound leisure travel trips by China's
residents are estimated at 71.2 million in 2014, and are
forecasted to grow by an average of 11.1% per year to
reach 134 million trips by 2020. Excluding Hong Kong
and Macau as destinations, outbound trips are much
lower at 40 million in 2014, but are growing faster and
are projected to reach 84.8 million in 2020 by an aver-
age of 13.3% per annum. Total outbound trips will
grow much faster than total household growth (11.1%
versus 0.5%) over the forecast period resulting in a
ratio of outbound trips to households that is projected
to reach 29.7% in 2020 from 16.3% in 2014. Exclud-
ing Hong Kong and Macau as destinations, this ratio is
projected to reach 18.8% in 2020 from 9.1% in 2014
Households earning above US$10,000 per annum
constitute about 93% of all outbound international
leisure trips in 2014 and at the same time make up only
26% of all households. Dividing these percentages
(93% by 26%) yields a skewed concentration ratio of
3.6 reflecting a minority number of households ac-
counting for the lion's share of outbound travel.
Among the 14 Asia/Pacific markets China has the third
highest concentration ratio after India at 10.8 and In-
donesia at 4.2. Projecting forward to 2020, the higher
levels of outbound travel growth will come from the
households earning above US$10,000 (26% of house-
holds are in this category and they account for 93% of
all outbound travel). The primary driver for this is that
the number of households earning above US$10,000
is also growing much faster than the number of house-
holds earning below US$10,000.
The propensity to travel by household income ex-
hibits a point of inflection at the US$10,000 household
income divider, after which the propensity to consumer
outbound travel rises rapidly.
Table 11. China
Outbound Leisure
Purpose trips only,
excludes same-day trips to
Hong Kong and Macau
2011 2012 2013e 2014e 2020f
2014-2020
CAGR
China - Outbound trips
(mn)
China - Outbound trips
(mn)
(ex. all HK & Macau)
Households (mn)
Total outbound trips
as percentage of total
households
Total outbound trips
as percentage of total
households
(ex all HK & Macau)
42.6 50.5 61.1 71.2 134.0 11.1%
21.7 27.3 34.3 40.0 84.8 13.3%
429.6 432.3 435.1 437.8 451.7 0.5%
9.9% 11.7% 14.0% 16.3% 29.7%
5.1% 6.3% 7.9% 9.1% 18.8%
Q1 2014 24
In terms of aspirational destinations, the Paris-
France combination ranks first with an overwhelming
14.1% of mindshare (in 2012, Chinese arrivals rank
ninth in terms of tourist arrivals in France by origin
countries, and the first eight ranks are held by Euro-
pean countries and the US). The Sydney-Australia com-
bination follows with 7.9%, then the New York-USA
combination at 7.5%.
China is the largest source market for Maldives, the
number two ranked city location, and the number of
Chinese tourists to Maldives has grown by more than
five times in the five-year period between 2007 and
2012.
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
5-
10k
10-
15k
15-
20k
20-
25k
25-
30k
30-
35k
35-
40k
40-
45k
45-
50k
50-
60k
60-
70k
70-
80k
80-
90k
90-
120k
120-
140k
140-
150k
Chart 11. China: Propensity for International Leisure Travel
and Average Number of Trips per Outbound Household by Household Income (US$)
<5k >150k
5%
0.2
8%
0.3
18%
0.7
29%
1.1
48%
1.8
57%
2.1
62%
2.3
72%
2.7
79%
2.9
3.1
3.0
82%
81%
85% 85% 85% 85% 85% 85% 85%
3.2 3.2 3.2 3.2 3.2 3.2 3.2
2014: Average number of trips per outbound household (LHS)
Propensity to travel (RHS)
25 MasterCard Insights
India
International outbound leisure travel trips by Indias res-
idents are estimated at 7.9 million in 2014, and are
forecasted to grow by an average of 13.0% per year to
reach 16.5 million trips by 2020. Total outbound trips
will grow much faster than total household growth
(13.0% versus 1.1%) over the forecast period result-
ing in a ratio of outbound trips to households that is
projected to reach 5.8% in 2020 from 3.0% in 2014.
Among the 14 Asia/Pacific markets, India has the low-
est ratio of outbound trips to households and is about
three times lower than China outbound (9.1%, ex HK
and Macau) and Indonesia (10.7%)
Indian households earning above US$10,000 per
annum constitute about 96% of all outbound interna-
tional leisure trips (2014) and at the same time make
up only 8.9% of all households. Dividing these per-
centages (96% by 8.9%) yields a concentration ratio
of 10.8 which presents a very skewed picture of the
distribution of outbound travel by households. Among
the 14 Asia/Pacific markets India has the highest con-
centration ratio followed by Indonesia at 4.2 (i.e. the
concentration of outbound travel in India is more than
twice as concentrated as Indonesia). As mentioned
above, China follows Indonesia with a ratio of 3.6. Pro-
jecting forward to 2020, the higher levels of outbound
travel growth will come from Indian households earn-
ing above US$7,500 (16% of households are in this
category and they account for 99.7% of all outbound
travel).
The propensity to travel by household income ex-
hibits a point of inflection at the US$7,500 household
income divider after which propensity to consumer
outbound travel rises rapidly. Comparing India to China
we see that the propensity curve for India rises much
more slowly as income increases compared to China.
Table 12. India
All Purpose Outbound trips
(excludes border crossing
to China on foot)
2011 2012 2013e 2014e 2020f
2014-2020
CAGR
Outbound trips (mn)
Households (mn)
Total outbound trips
as percentage
of total households
5.8
257.4
2.2%
6.4
260.6
2.5%
7.2
263.8
2.7%
7.9
266.9
3.0%
16.5
285.1
5.8%
13.0%
1.1%
Q1 2014 26
In terms of aspirational destinations, the New York-
USA combination ranks first with 9.7% of mindshare.
Singapore is next at 8.8%, followed by the London-UK
combination at 6.5%, Malaysia at 4.8%, Australia at
4.3% and Japan at 4.1%. These six destinations ac-
count for 37.1% of total aspirational mindshare. Inter-
estingly, only the Indians selected Malaysia (4.8%) as a
top 20 aspirational destination.
Singapore and Malaysia have the shortest flight
times from India (5-6 hours) which bodes well for the
two countries going forward as they stand to benefit
the most from any growth in outbound Indian travel.
One thing to note is that four of the top 20 aspirational
destinations selected by Indians are actually domestic.
In fact of the top 50 destinations, 21 of them are do-
mestic and account for 17% of aspirational mindshare.
This suggests that there is still a lot of pent up demand
for domestic travel in India which competes with in-
ternational travel for the overall household travel
budget and may explain in part why the propensity to
consume international outbound travel rises much
more slowly after the US$10,000 inflection point com-
pared to China (which shares the same inflection
point).
6.0
5.0
4.0
3.0
2.0
1.0
0.0
100%
80%
60%
40%
20%
0%
2.5-
5k
5-
7.5k
7.5-
10k
10-
15k
15-
20k
20-
30k
30-
40k
40-
50k
50-
70k
70-
90k
90-
100k
Chart 12. India: Propensity for International Leisure Travel
and Average Number of Trips per Outbound Household by Household Income (US$)
<2.5k >100k
95%
90%
85%
70%
50%
5%
0.8
2.2
0% 0% 0%
15%
1.1
30%
20%
1.7
40%
2.8
3.9
4.7
5.0
5.3
0.3
2014: Average number of trips per outbound household (LHS)
Propensity to travel (RHS)
0.1
27 MasterCard Insights
Japan
International outbound leisure travel trips by Japanese
residents are estimated at 17.3 million in 2014, and are
forecasted to grow by an average of 1.1% per year to
reach 18.4 million trips by 2020. Total outbound trips
will grow faster than total household growth which is
declining (1.1% versus -0.2%) over the forecast period
resulting in a ratio of outbound trips to households that
is projected to reach 37.7% in 2020 from 35.0% in
2014. This ratio is the lowest among the seven devel-
oped markets in Asia/Pacific covered. The next lowest
ratio for a developed market is Korea with 82.3%
which is more than double Japan's.
About 80% of outbound trips in Japan are ac-
counted for by households earning above US$50,000
per annum in 2014. This range accounts for about
65.4% of all households and suggests that outbound
travel is quite evenly spread across income levels. Pro-
jecting forward to 2020, outbound travel growth will
come from the households earning between
US$25,000-US$70,000 (62% of households are in this
category and they account for 42% of all outbound
travel). The total number of Japanese households is
slowly declining but households in this income bracket
are still increasing (albeit at a very low rate of growth).
The propensity to travel by household income ex-
hibits a point of inflection at the US$70,000 household
income threshold, above which it rises more rapidly.
Despite the inflection point, the overall propensity
curve is still more or less linear. This is consistent with
our earlier observation that outbound travel by Japan-
ese residents is quite evenly spread across income lev-
els.
Table 13. Japan
All Purpose
Outbound trips
2011 2012 2013e 2014e 2020f
2014-2020
CAGR
Outbound trips (mn)
Households (mn)
Total outbound trips
as percentage
of total households
17.0
49.4
34.4%
18.5
49.4
37.4%
17.1
49.4
34.7%
17.3
49.3
35.0%
18.4
48.9
37.7%
1.1%
- 0.2%
Q1 2014 28
In terms of aspirational destinations, the Paris-
France combination ranks first with 9.5% of mind-
share. The New York- USA combination follows at
6.8%, then the Rome-Italy combination at 5.8%, the
US state of Hawaii at 5.4%, and London at 4.7%.
Three of the top 20 aspirational destinations are (Oki-
nawa - #7, Kyoto - #12 and Hokkaido - #18). This sug-
gests that there is still some pent up demand for
domestic travel which competes with international
travel for the overall household travel budget and may
explain in part why the propensity to consume has a
lower trajectory rate compared to South Korea which
has no domestic locations within its list of aspirational
destinations.
70%
60%
50%
40%
30%
20%
10%
0%
10-
25k
Chart 13. Japan: Propensity for International Leisure Travel
and Average Number of Trips per Outbound Household by Household Income (US$)
25-
35k
35-
45k
45-
50k
50-
60k
60-
70k
70-
90k
90-
120k
120-
150k
<10k >150k
0.6
0.5
1.8
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
16%
20%
26%
27%
0.7
0.8 0.8
0.9 0.9
1.2
1.3
1.4
1.7 29%
30%
31%
41%
44%
48%
59%
2014: Average number of trips per outbound household (LHS)
Propensity to travel (RHS)
29 MasterCard Insights
Australia
International outbound leisure travel trips by Australian
residents are estimated at 8.1 million in 2014, and are
forecast to grow by an average of 3.7% per year to
reach 10 million trips by 2020. Total outbound trips will
grow about three times faster than total household
growth (3.7% versus 1.2%) over the forecast period
resulting in a ratio of outbound trips to households that
is projected to reach 102.8% in 2020 from 89.1% in
2014.
About 87% of outbound trips are accounted for by
Australian households earning above US$70,000 per
annum in 2014. This range accounts for about 70.5%
of all households and suggests that outbound travel is
quite evenly spread across income levels. Projecting for-
ward to 2020, outbound travel growth will mostly
come from households earning above US$100,000
(51.6% of households are in this category and they ac-
count for 70% of all outbound travel). The primary
driver for this is that the number of households earn-
ing above US$100,000 is also growing much faster
than the number of households earning below
US$100,000 (which are actually declining).
The propensity to travel by household income ex-
hibits a linear type curve which is consistent with our
earlier observation that outbound travel by Australian
residents is quite evenly spread across income levels.
Table 14. Australia
Outbound Leisure
Purpose trips only
2011 2012 2013e 2014e 2020f
2014-2020
CAGR
Outbound trips (mn)
Households (mn)
Total outbound trips
as percentage
of total households
6.5
8.6
75.9%
6.9
8.8
78.4%
7.4
8.9
83.1%
8.1
9.0
89.1%
10.0
9.7
102.8%
3.7%
1.2%
Q1 2014 30
In terms of aspirational destinations, the New York-
USA combination is the most desired at 13.8%. This is
followed by the London-UK combination at 12.5%,
the Paris-France combination at 11.8%, the Rome-Italy
combination at 5.6%, and the Tokyo-Japan combina-
tion at 3.9%. These five combinations account for
close to 46% of total aspirational mindshare. It is in-
teresting to note that there are five US destinations in
the top 20 (including the country itself as a destination)
which account for almost 20% of total mindshare.
2.5
2.0
1.5
1.0
0.5
0.0
80%
70%
60%
50%
40%
30%
20%
10%
0%
20-
30k
30-
40k
40-
45k
45-
50k
50-
60k
60-
70k
70-
80k
80-
90k
90-
100k
100-
120k
120-
150k
Chart 14. Australia: Propensity for International Leisure Travel
and Average Number of Trips per Outbound Household by Household Income (US$)
<20k >150k
70%
65%
57%
55%
53%
50%
43%
41%
40%
39%
35%
30%
27%
2014: Average number of trips per outbound household (LHS)
Propensity to travel (RHS)
0.8 0.8
1.0
1.1 1.1 1.1
1.2
1.4
1.5 1.5
1.6
1.8
2.0
31 MasterCard Insights
New Zealand
International outbound leisure travel trips by New
Zealand residents are estimated at 1.9 million in 2014,
and are forecasted to grow by an average of 3.3% per
year to reach 2.3 million trips by 2020. Total outbound
trips will grow over three times faster than total house-
hold growth (3.3% versus 1.0%) over the forecast pe-
riod resulting in a ratio of outbound trips to households
that is projected to reach 122.4% in 2020 from
106.8% in 2014.
About 80% of outbound trips are accounted for by
New Zealand households earning above US$40,000
per annum in 2014. This range accounts for about
57% of all households and suggests that outbound
travel is quite evenly spread across income levels. Pro-
jecting forward to 2020, outbound travel growth will
mostly come from households earning above
US$100,000 (19% of households are in this category
and they account for 39% of all outbound travel). The
primary driver for this is that the number of households
earning above US$100,000 is also growing much
faster than the number of households earning below
US$100,000.
The propensity to travel by household income ex-
hibits a point of inflection at the US$35,000 household
income divider after which propensity to consumer
outbound travel rises more rapidly. Despite the inflec-
tion point, the overall propensity curve is still more or
less linear which is consistent with our earlier observa-
tion that outbound travel by New Zealand residents is
quite evenly spread across income levels.
Table 15. New Zealand
Outbound Leisure
Purpose trips only
2011 2012 2013e 2014e 2020f
2014-2020
CAGR
Outbound trips (mn)
Households (mn)
Total outbound trips
as percentage
of total households
1.7
1.7
100.3%
1.7
1.7
101.9%
1.8
1.7
103.5%
1.9
1.8
106.8%
2.3
1.9
122.4%
3.3%
1.0%
Q1 2014 32
In terms of aspirational destinations, the London-
UK combination is the most desired destination at
12.4%. This is followed by the New York-USA combi-
nation at 11.3%, and the Paris-France combination at
11.2%. These three combinations account for close to
35% of total aspirational mindshare. There are five US
destinations in the top 20 (including the country itself
as a destination) which account for almost 17% of
total mindshare.
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
80%
70%
60%
50%
40%
30%
20%
10%
0%
20%
25%
30%
41% 41%
42%
45%
57%
63%
64%
70%
0.8
1.0
1.3
1.7 1.7
1.8
1.9
2.4
2.7 2.7
3.2
15-
25k
25-
35k
35-
40k
40-
50k
50-
60k
60-
70k
70-
80k
80-
100k
100-
130k
<15k >130k
Chart 15. New Zealand: Propensity for International Leisure Travel
and Average Number of Trips per Outbound Household by Household Income (US$)
2014: Average number of trips per outbound household (LHS)
Propensity to travel (RHS)
33 MasterCard Insights
South Korea
International outbound leisure travel trips by South Ko-
rean residents are estimated at 15.5 million in 2014,
and are forecasted to grow by an average of 3.7% per
year to reach 19.2 million trips by 2020. Total out-
bound trips will grow much faster than total household
growth (3.7% versus 0.4%) over the forecast period
resulting in a ratio of outbound trips to households that
is projected to reach 99.6% in 2020 from 82.3% in
2014. Among the seven developed economies cov-
ered, South Korea has the second lowest ratio after
Japan (35% in 2014)
About 82% of outbound trips are accounted for by
South Korean households earning above US$30,000
per annum in 2014. This range accounts for about
52.4% of all households and suggests that outbound
travel is quite evenly spread across income levels. Pro-
jecting forward to 2020, most outbound travel growth
will come from households earning above US$45,000
(23.6% of households are in this category and they ac-
count for 50% of all outbound travel). The primary
driver for this is that the number of households earn-
ing above US$45,000 is also growing much faster than
the number of households earning below US$45,000.
The propensity to travel by household income ex-
hibits a point of inflection at the US$25,000 household
income divider after which propensity to consumer
outbound travel rises more rapidly. Despite this, the
overall propensity curve is still more or less linear which
is consistent with our earlier observation that outbound
travel by South Korean residents is quite evenly spread
across income levels.
Table 16. South Korea
All Purpose
Outbound trips
2011 2012 2013e 2014e 2020f
2014-2020
CAGR
Outbound trips (mn)
Households (mn)
Total outbound trips
as percentage
of total households
12.7
18.4
68.9%
13.7
18.6
73.8%
15.0
18.7
80.2%
15.5
18.8
82.3%
19.2
19.3
99.6%
3.7%
0.4%
Q1 2014 34
In terms of aspirational destinations, the Paris-
France combination is the most desired destination at
13.8%. This is followed by the New York-USA combi-
nation at 11.0%, and the London-UK combination at
6.7%. The Sydney-Australia combination follows with
7.9%, and the Rome-Italy combination comes next at
5.6%. These five combinations account for close to
45% of total aspirational mindshare. There are four US
destinations in the top 20 (including the country itself
as a destination) which account for almost 16% of
total mindshare.
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
62%
59%
54%
46%
42%
37%
25%
22% 21%
65%
70%
72%
77%
Chart 16. South Korea: Propensity for International Leisure Travel
and Average Number of Trips per Outbound Household by Household Income (US$)
2014: Average number of trips per outbound household (LHS)
Propensity to travel (RHS)
20-
30k
30-
40k
40-
45k
45-
50k
50-
60k
60-
70k
70-
80k
80-
90k
90-
100k
100-
120k
120-
150k
<20k >150k
0.9 0.9
1.1
1.5
1.8
1.9
2.3
2.5
2.6
2.7
2.9
3.0
3.2
35 MasterCard Insights
Hong Kong
International outbound leisure travel trips by Hong
Kong residents are estimated at 8.7 million in 2014,
and are forecasted to grow by an average of 4.9% per
year to reach 11.6 million trips by 2020. Total out-
bound trips will grow about seven times faster than
total household growth (4.9% versus 0.7%) over the
forecast period resulting in a ratio of outbound trips to
households that is projected to reach 427.8% in 2020
from 334.9% in 2014. Hong Kong households have
the second highest ratio of outbound trips to house-
holds after Singapore, among the 14 Asia/Pacific mar-
kets covered (335% in 2014; Singapore at 566%). The
lack of domestic tourism in these two economies
(owing to their geographical size) is possibly the main
reason for such high ratios.
Some 74% of outbound trips in Hong Kong are ac-
counted for by households earning above US$35,000
per annum in 2014. This range accounts for about
60.4% of all households and suggests that outbound
travel is quite evenly spread across income levels. Di-
viding these percentages (74.3% by 60.4%) yields a
ratio of concentration 1.2 which is the 3rd lowest (after
Singapore and Taiwan which are tied at 1.1) among the
14 Asia/Pacific markets, which means outbound travel
by Hong Kong residents is the most evenly spread
across income levels.
Projecting forward to 2020, most outbound travel
growth will come from households earning above
US$80,000 (20% of households are in this category
and they account for 29% of all outbound travel). The
primary driver for this is that the number of households
earning above US$80,000 is also growing much faster
than the number of households earning below
US$80,000.
The propensity to travel by household income ex-
hibits a point of inflection at the US$35,000 household
income divider after which propensity to consumer
outbound travel rises more rapidly. Despite this, the
overall propensity curve is still more or less linear which
is consistent with our earlier observation that outbound
travel by Hong Kong residents is quite evenly spread
across income levels.
Table 17. Hong Kong
All Purpose Outbound
trips (excludes non-air
travel to China and Macau)
2011 2012 2013e 2014e 2020f
2014-2020
CAGR
Outbound trips (mn)
Households (mn)
Total outbound trips
as percentage
of total households
7.1
2.5
283.7%
7.8
2.6
305.9%
8.6
2.6
332.5%
8.7
2.6
334.9%
11.6
2.7
427.8%
4.9%
0.7%
Q1 2014 36
In terms of aspirational destinations, the Tokyo -
Japan combination is the most desired destination at
14.7%. This is followed by the London-UK combina-
tion at 8.0%, and the New York-USA combination at
6.0%. Australia follows with 5.7% and South Korea
comes next at 4.2%. These five combinations account
for close to 42% of total aspirational mindshare. Eight
of the top 20 destinations are within Asia/Pacific with
Japan (#1) being the highest ranked one.
120%
100%
80%
60%
40%
20%
0%
20-
35k
>140k
Chart 17. Hong Kong: Propensity for International Leisure Travel
and Average Number of Trips per Outbound Household by Household Income (US$)
6.0
5.0
4.0
3.0
2.0
1.0
0.0
<20k
64% 64%
82% 82%
84%
87%
90%
95%
96% 96% 97%
94%
3.4
35-
45k
3.4
45-
50k
4.3
50-
60k
4.3
60-
70k
4.5
70-
80k
4.6
80-
90k
4.8
90-
100k
5.0
100-
120k
5.1
120-
140k
5.1 5.1
5.0
2014: Average number of trips per outbound household (LHS)
Propensity to travel (RHS)
37 MasterCard Insights
Taiwan
International outbound leisure travel trips by Taiwanese
residents are estimated at 10.6 million in 2014, and are
forecasted to grow by an average of 5.1% per year to
reach 14.2 million trips by 2020. Total outbound trips
will grow much faster than total household growth
(5.1% versus 0.2%) over the forecast period resulting
in a ratio of outbound trips to households that is pro-
jected to reach 188.2% in 2020 from 141% in 2014.
Close to 82% of outbound trips in Taiwan are ac-
counted for by households earning above US$25,000
per annum in 2014. This range accounts for about
73% of all households and suggests that outbound
travel is quite evenly spread across income levels. Di-
viding these percentages (82% by 73%) yields a con-
centration ratio of 1.1 which is the lowest (tied with
Singapore which is also at 1.1) among the 14 Asia/Pa-
cific markets.
Projecting forward to 2020, growth in outbound
travel will come from households earning above
US$35,000 (51% of households are in this category
and they account for 64% of all outbound travel). The
primary driver for this is that the number of households
earning above US$35,000 are also growing much
faster than the number of households earning below
US$35,000.
Despite this, the overall propensity to travel curve by
household income is still more or less linear which is
consistent with our earlier observation that outbound
travel by Taiwanese residents is quite evenly spread
across income levels.
Table 18. Taiwan
All Purpose
Outbound trips
2011 2012 2013e 2014e 2020f
2014-2020
CAGR
Outbound trips (mn)
Households (mn)
Total outbound trips
as percentage
of total households
8.8
7.4
118.2%
9.4
7.4
125.8%
10.4
7.5
139.3%
10.6
7.5
141.0%
14.2
7.6
188.2%
5.1%
0.2%
Q1 2014 38
In terms of aspirational destinations, the Tokyo-
Japan combination is the most desired destination at
14.7%. This is followed by the Paris-France combina-
tion at 9.2%, the New York- USA combination at
8.1%, and the London- UK combination at 5.1%.
These four combinations account for close to 37% of
total aspirational mindshare. There are four Japanese
destinations in the top 20 (including the country itself
as a destination) which account for almost 18% of
total mindshare. Nine of the top 20 destinations are
within Asia/Pacific with Japan being the highest ranked
one.
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
>60k
Chart 18. Taiwan: Propensity for International Leisure Travel
and Average Number of Trips per Outbound Household by Household Income (US$)
<2.5k
30%
81%
1.0
2.8
2.5-
5k
40%
1.4
5-
15k
50%
1.7
15-
25k
54%
1.9
25-
35k
59%
2.0
35-
45k
64%
2.2
45-
60k
67%
2.3
3.0
2.5
2.0
1.5
1.0
0.5
0.0
2014: Average number of trips per outbound household (LHS)
Propensity to travel (RHS)
39 MasterCard Insights
Appendix: Research
Methodology and Data Sources
Forecasting Methodology
The forecast of outbound travel in Asia/Pacific begins
with real GDP growth from 2014 to 2020. The IMF
WEO series of GDP forecasts released in October 2013
(for the 2014 to 2018 period) is adopted. It is then ex-
tended to 2020 extrapolating the growth trends of
2014 to 2018.
The next step is to apply the "propensity to travel"
for each household income brackets obtained from
MasterCard surveys from 2012 to 2013 (see data
source below). This is then in turn applied to the esti-
mated numbers of households in each income bracket
using estimates from Canback-Danglar, thereby gener-
ating estimates of average trips per household by their
annual incomes.
For each household income bracket the total num-
ber of outbound trips = average number of trips of the
bracket X propensity to travel of the bracket X number
of households in the bracket. Initially the distribution
of average number of trips per household across the
annual household income brackets follows the propen-
sity to travel distribution curve and then was iteratively
adjusted until the sum of total outbound trips across
all brackets equalizes with the total number of out-
bound trips at the national level for each year. This
process was done for 2011,2012 and 2013 to obtain
the average number of trips per household bracket for
the three years. The result is a model that can be ap-
plied to estimate the average number of trips per
household bracket for the 2014 to 2020 period.
Data Source
The main source of data for this project is the 2012 and
2013 editions of MasterCard Worldwide Survey of Pur-
chasing Priorities. These surveys have been conducted
bi-annually since 1993 on 400 to 800 respondents per
market aged 18 - 64. Coverage extends to 27 coun-
tries across Asia/Pacific, Middle East and Africa. The
survey is extensive and feature sections on consumer
confidence, travel, dining, luxury shopping, financial
behavior and well-being.
To calculate the number of households within the
stated income brackets, data from Canback-Danglar
was used.
Data for outbound travel itself was taken from the
national statistics boards of the relevant markets. In
general we have tried to eliminate same-day excur-
sionist travel for all markets (e.g. China to Hong Kong)
as these numbers can be so large that they are several
times the tourist (i.e. overnight) travel size. Further-
more, a sizable portion of these same-day trips are
overland for reasons of day to day shopping or for day
employment (i.e. cross over for work during the day
and cross back home at night). In cases where same-
day excursionist travel are not available to net out from
overall outbound travel we have used proxies like over-
land or non-air travel (e.g. Singapore-Malaysia both
ways and Hong Kong to China) This report is focused
on leisure travel and where possible we have tried to
use only leisure purpose outbound travel numbers (i.e.
extracting business and employment travel where pos-
sible). Note that there are some reports that forecast
India outbound at 50 million by 2020, but these in-
variably use all-purpose trips as their forecast base (in-
cluding trips for employment purposes). This report
focuses on leisure travel only where possible. Official
surveys on outbound travel for India indicate that close
to 60% of all outbound travel is for business or em-
ployment purposes and we have adjusted our out-
bound numbers accordingly.
Q1 2014 40
41 MasterCard Insights
1. See Global Destination Cities Index by MasterCard World-
wide.
2. See Appendix for research methodology.
3. In general we have tried to eliminate same-day excursion-
ist travel for all markets (e.g. China to Hong Kong) as these
numbers can be so large that they are several times the
tourist (i.e. overnight) travel size. Furthermore, a sizable por-
tion of these same-day trips are overland for reasons of day
to day shopping or for day employment (i.e. cross over for
work during the day and cross back home at night). In cases
where same-day excursionist travel are not available to net
out from overall outbound travel we have used proxies like
over-land or non-air travel (e.g. Singapore-Malaysia both
ways and Hong Kong to China) This report is focused on
leisure travel and where possible we have tried to use only
leisure purpose outbound travel numbers (i.e. extracting
business and employment travel where possible).
4. China reports its outbound travel inclusive of same day
trips and also trips to Hong Kong and Macau which are part
of China. As these are Special Administrative Regions they
sit astride the line between domestic travel and international
travel for outbound mainland Chinese. As such, we present
both views here (including and excluding outbound trips to
Hong Kong and Macau). For both sets of numbers we have
stripped out same day travel and estimated overnight travel
only.
5. Note that there are some reports that forecast India out-
bound at 50 million by 2020, but these invariably use all-
purpose trips as their forecast base (including trips for
employment purposes). This report focuses on leisure travel
only where possible. Official surveys on outbound travel for
India indicate that close to 60% of all outbound travel is for
business or employment purposes and we have adjusted our
outbound numbers accordingly.
Q1 2014 42
About the Authors
Desmond Choong
Desmond Choong is a Research Economist with the
MasterCard Center for Inclusive Growth. In this capac-
ity, he sources, reviews and develops research aimed at
advancing the Center's goals. Based in Singapore, he is
an economist and business analyst with extensive ex-
perience in the Asia/Pacific region and a focus on index
modeling, market sizing and macroeconomic analysis.
He has spent thirteen years consulting for multinational
companies across a wide range of industries, including
finance, resources, and travel and hospitality. Desmond
has taught International Trade at Boston University and
holds a B.A. in English/Economics from Boston College
and a M.A. in Political Economics from Boston Univer-
sity.
Yuwa Hedrick-Wong
Yuwa is currently Chief Economist, MasterCard Center
for Inclusive Growth, and Global Economic Advisor,
MasterCard. He is also HSBC Professor of International
Business at the University of British Columbia, Canada.
He is an economist with 25 years of experience
gained in over thirty countries. He is a Canadian who
grew up in Vancouver and has spent the last 20 years
working in Europe, Sub-Sahara Africa, and Asia/Pacific.
He has served as advisor to over fifty leading multina-
tional companies.
He is a published author on consumer markets,
economic development, trade and international rela-
tions. Yuwa studied philosophy, political science, and
economics at Trent University, and pursued post-grad-
uate training at the University of British Columbia and
Simon Fraser University in Canada, where he received
his Ph.D.
He lives on Salt Spring Island, off the west coast of
Canada, with his wife and their cat; and is an enthusi-
astic apprentice in the fine art of gardening.
2011 MasterCard
www.mastercardworldwide.com
2014 MasterCard
www.mastercardworldwide.com

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