Visitors to Asia Pacific spent more on their Visa cards than ever in 2005, injecting US$23.7 billion into the region’s tourism industry, representing a 17% increase over 2004.According to a new Visa Asia Pacific tourism spending report, the biggest increase in tourist spending was in China, where Visa cardholders spent $636 million more last year than they did in 2004.
The report, entitled “Recent trends in spending by visitors to Asia Pacific,” found Asia Pacific Visa cardholders to be the largest international spenders in the region with $10 billion, or 43% of total international spending. The report also named the US and UK as the biggest spending nations in the region, spending $4.7 billion and $3.4 billion respectively.
Destinations that drew the most tourist dollars in 2005 were Australia ($4.5 billion), Thailand ($2.8 billion) and China ($2.7 billion). China is expected to overtake Thailand this year as the market receiving the second-largest amount of tourist dollars. China had attracted more tourist spending than Thailand in the last two quarters of 2005 and is expected to report accelerated growth as interest is fueled by the nation’s major marketing and tourism campaigns in the run-up to the 2008 Beijing Olympics.
“The report shows the growing importance of tourism to Asia Pacific economies; in 2005 alone there were more than 320 million visitors to Asia Pacific who spent up to $110 billion in the region,” said Paul Dowling, executive vice president for Visa International Asia Pacific. “This income is vital to the region’s economic well-being. We hope that by sharing our comprehensive data of where and how visitors spend their money, we can provide businesses, governments and tourism authorities with the information they need to develop their strategies and business models.”
While China experienced the largest annual increase in Visa tourist spending, India continued to establish itself as a growing tourism market. Tourists to India spent $1.2 billion in 2005 - up 34% or $313 million more than they did the year before.
Retail and Trade - Asia Pacific’s Top Spending Category
General retail and trade continued to dominate as the top-spending category among visitors in the region, representing $6 billion - or 26% - of total tourist spending on Visa cards. Department stores, jewelry stores and duty free stores accounted for the largest categories within this sector.
Accommodation and transport also did well with visiting Visa cardholders, representing $5 billion and $2.6 billion respectively. Tourists also used their Visa cards to withdraw cash of $5.3 billion from Automated Teller Machines (ATMs) or over the counter in 2005, an increase of about 22% from 2004.
Arts and craft and clothing stores observed the highest year-on-year spending growth among major retail sub-industries, growing 25% and 24% respectively, which reflects the growing interest in Asia Pacific culture among tourists from within the region and globally.
Point-of-sale transactions made up more than 88% ($21 billion) of the transactions by international Visa cardholders in the region.
China: Momentum Building Ahead of the 2008 Games
Just two years ahead of the Beijing Olympics, robust growth in tourist spending was recorded in China. In 2005, China’s total Visa tourist spending grew 31% over 2004 to $2.7 billion. Asia Pacific Visa cardholders were the biggest international spenders, accounting for more than half of all international spending in China at $1.5 billion.
Visa cardholders from the European Union were the second biggest spenders in China, spending $629 million, representing 23% of the country’s tourist spending on Visa cards. Latin America was the fastest growing source region with 75% growth in spending in China, reflecting closer business and cultural exchanges between the region and the country. Among Visa cardholders, the biggest individual spending nations in China were the US ($428 million) and Japan ($392 million).
Among destinations within China, Shanghai attracted the most visitors in terms of spending in 2005. The thriving commercial hub drew both sightseers and business travelers, who spent $587 million on their Visa cards, followed by Beijing with $490 million, although this ranking order is likely to change in the near future.
“A tourism juggernaut is headed towards Beijing, which is forecast to receive 4.4 million overseas visitors spending $4.5 billion in 2008,” said Dowling. “With China showing every indication of being the region’s second largest tourism market in the next few months, it is critical that Visa and its Chinese member banks work together to help ensure that the payment infrastructure is ready to maximize fully this historical opportunity - so that more visitors to China can pay the way they do so back home.
“So far we are seeing solid results through our strategic partnership with the Beijing Municipal Bureau of Tourism, where we are helping the city generate more inbound travel and tourism revenue, as well as working to help improve Beijing’s payment environment.”
The highest year-on-year spending growth among Visa cardholders in China was noted on professional and commercial services (112%) and education (58%), demonstrating the potential for developing card acceptance and usage at these institutions.