The global travel sector is breaking boundaries in 2024 as consumer spending on tourism remains robust and passenger traffic soars, according to the latest report from the Mastercard Economics Institute (MEI).
Despite fluctuating exchange rates, climate concerns and varying levels of affordability, travel is booming, with nine out of the last 10 record-setting spending days in the global cruise and airline industries occurring this year. Looking ahead, the MEI anticipates this momentum will continue as consumers around the world prioritise meaningful experiences and allocate more of their budgets to travel. People are becoming more strategic about how, when and where they travel, with 2024 seeing significant shifts in travel patterns.
APAC destinations are trending in a big way and have demonstrated the greatest momentum among travellers. This is measured and ranked by the change in share of tourism transactions over the past 12 months ending March 2024.
In the Asia Pacific region, a few themes stand out, including:
- Japan emerged as the #1 trending destination worldwide(at 0.9%), as it welcomed more than three million foreign visitors in March 2024 – the highest level ever – even before the peak travel season begins. Driven by a weak yen (the lowest since 1990), Japan’s favourable exchange rate is expected to help it remain the clear tourism frontrunner throughout 2024.
- APAC passenger traffic is rebounding, particularly for shorter, intra-regional trips. For example, this summer’s top destinations for travellers from Singapore include Bangkok, Kuala Lumpur, and Perth.
- Thailand tourism is expected to fully recover in 2024, according to MEI, with total visitor arrivals now only 7% below 2019, pre-pandemic level. Notably, inbound flight traffic from South Asia and the ASEAN region is nearly 20% above 2019 levels.
Summer holiday hot spots (June-Aug 2024)
While Japan was the top trending destination during the last 12 months, looking ahead, Munich ranks as the #1 summer destination (in terms of share gain in flight bookings) due to its hosting of the UEFA EURO 2024 football championship in June.
Tokyo comes in a close second while Bali (#6) and Bangkok (#7) are also among the top 10 cities where demand is gaining momentum in the next three months. The other cities in the Top 10 are #3 Tirana (Albania), #4 Nice (France), #5 Cancun (Mexico), #8 Kerkyra (Corfu, Greece), #9 Frankfurt (Germany) and #10 Aruba.
Tourism continues to outperform in European countries, partly driven by Americans
The travel industry in Europe shines as one of the most resilient sectors within the European economy, Despite facing inflation and higher interest rates post-pandemic, 2023 marked the year in which a full recovery in the number of overnight stays was reached, totalling 2.91 billion stays in 2023, up from 2.88 billion in 2019.
The outperformance of travel is due to high tourism in Croatia, Greece, Portugal and Spain as well as the increase of American tourists to Europe. For example, official tourism statistics show that the U.S. share of arrivals in Spain rose from 4% in 2019 to 5% in 2023, in Portugal from 6% to 9%, and in the UK from 13% to 16%. The challenge now is to accommodate additional demand with limited flight and accommodation capacity.
U.S. passenger traffic to overseas countries is 20% higher than pre-Covid record
Through Q1 2024, the U.S, travel scene has been marked by a contrasting inbound and outbound dynamic. By November 2022, the number of U.S. travellers departing overseas (excluding Canada and Mexico) had exceeded 2019 levels. Today, U.S. travel overseas is 20% above that level as of March 2024.
By comparison, visitor traffic arrivals into the U.S. from abroad remain 6% below 2019 levels as of March 2024. However, at its current pace, the MEI estimates foreign passenger traffic in the U.S. should exceed 2019 levels later this year.
Chinese Mainland Domestic Tourism Rebounds While Outbound Travel Continues to Recover
The Chinese Mainland’s travel dynamic has shifted, as more Chinese tourists prioritise domestic trips over international ones.
- The Chinese Mainland’s domestic tourism story is a positive one, as air passenger traffic has fully normalised and even exceeded 2019 levels.
- Meanwhile, international tourism traffic leaving the Chinese Mainland continues to recover and is now at 80.3% of 2019 levels.
- Additional upside growth is expected in 2024, supported by visa exemptions in APAC and beyond, as well as an increase in international flight capacity, benefiting destinations such as Singapore, Malaysia and Thailand.
More Indians are Traveling Than Ever Before
Strengthened by a burgeoning middle class, additional route capacity, and a strong desire to travel, 2024 marks the year when more Indians are traveling internationally than at any time in history.
- In the first three months of 2024, 97 million passengers travelled through Indian airports. Just 10 years ago, the same figure would have taken a whole year to achieve.
- Domestic passenger traffic is up 21% compared to 2019 levels while international passenger traffic is up 4%, as of March 2024.
- Indian travellers to key markets are up significantly in 2024 compared to 2019: 53% increase in visitors to Japan, 248% increase to Vietnam, 59% increase to the United States (notable as total overseas arrivals to the U.S. are still 7% below 2019 levels, largely due to the strong USD).
Explore the full Travel 2024: Breaking Boundaries report here.
