Outbound Travel Asia PDF

Knowledge Leadership
The Future of Outbound Travel in Asia/Pacific

by Desmond Choong and Yuwa Hedrick-Wong
MasterCard Insights
1Q 2014
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 region known for its attractive destinations for international 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 Vietnam. 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 incomes; 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 aspirational destinations for outbound travelers from these
markets are also identified. Together, they form a regional picture of how much outbound travel originating 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

3
Outbound trips (mn)
Trip Type
2011
(ex. same-day trips to HK & Macau)
LPO
42.6
(ex. all HK and Macau)
LPO
21.7
South Korea
AP
12.7
Japan
AP
17.0
India
LPO
5.8
Malaysia
AP
(ex. cross border overland to Singapore)
8.9
Taiwan
AP
8.8
Singapore
AP
(ex. cross border overland to Malaysia)
7.8
Hong Kong
(ex. non-air travel to China & Macau)
AP
7.1
China
China (ex HK & Macau trips)4
Indonesia
(ex. Singapore and Malaysia same-day)
LPO
4.9
Australia
LPO
6.5
Thailand
(ex. same-day trips to Malaysia & Laos)
AP
5.4
Vietnam
AP
(ex. overland border crossing to China)
2.8
Philippines
LPO
3.0
New Zealand
LPO
1.7
Total - 14 markets
134.9
Asia/Pacific Developed Markets
61.5
Asia/Pacific Emerging Markets
73.4
Key: LPO - Leisure Purpose Trips Only, AP - All Purpose Trips
Using China LPO
MasterCard Insights
Regional Overview
Collectively, the 14 Asia/Pacific markets are expected to
grow by an annual growth rate of 7.9% over the forecast period of 2014-2020. The largest outbound markets 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 remains the largest in Asia/Pacific in 2020, more than
four times of that of South Korea which is the second
largest market.
Emerging Asia/Pacific currently has about one and a

half times more outbound trips than developed Asia/Pacific (mostly due to China). And it will also grow by
more than twice as fast as developed Asia (10.1% versus 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 markets.
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.
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.
2012
2013
2014
2020
2014 -2020
CAGR (Adjusted)
50.5
61.1
71.2
134.0
11.1%
27.3
34.3
40.0
84.8
13.3%
13.7
15.0
15.5
19.2
3.7%
18.5
17.1
17.3
18.4
1.1%
6.4
7.2
7.9
16.5
13.0%
9.6
10.4
10.9
15.2
5.7%
9.4
10.4
10.6
14.2
5.1%
8.0
8.5
8.7
11.8
5.3%
7.8
8.6
8.7
11.6
4.9%
5.4
6.1
6.8
10.6
7.6%
6.9
7.4
8.1
10.0
3.7%
5.7
6.0
6.2
8.7
5.9%
3.4
3.9
4.3
6.4
6.7%
3.2
3.5
3.8
6.2
8.7%
1.7
1.8
1.9
2.3
3.3%
150.3
166.8
181.7
286.3
7.9%
66.1
68.8
70.6
88.7
3.9%
84.1
98.1
111.1
197.5
10.1%
Q1 2014
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 growing at almost the same pace as real GDP. A quick glance
at Chart 1 also reveals that in general the difference between outbound travel growth and real GDP growth
tends to be higher (below the diagonal line) for developing markets (except for Malaysia) and tends to be
lower (hugging or close to the diagonal line) for developed markets.
Chart 1 locates the positions of each of the 14

Asia/Pacific markets in the two-dimensional space combining 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 markets 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 competition from domestic tourism destinations adds to the
overall size of international outbound demand.
Chart 1. Outbound Travel Growth versus Real GDP Growth

Real GDP Growth
2014-2020
16%
14%
Outbound Trip Growth Rate <
Real GDP Growth
Outbound Trip
Growth Rate >
Real GDP
Growth
12%
10%
8%
rip
dT
n
ou
tb
Ou
6%
=
ate
R
th
ow
Gr
CN
IN
ID
MY
KR
4%
HK
TW
h
wt
ro
G
P
GD
al
Re
PH
VN
TH
SG
NZ
AU
2%
JP
0%
0%
2%
Bubble Size = 2020

Outbound Trips
MasterCard Insights
4%
6%
8%
10%
12%
14%
16%
Outbound Trip Growth

2014-2020
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 dynamics of changing numbers of households as well as
household incomes in these markets. Table 2 summarizes 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 certain percentage of households make multiple trips overseas 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 coincidentally are also the fastest growing developed markets 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 outbound leisure travel over the next 10-20 years as the
ratio starts to approach those of the other developing
markets.
Table 2. Number of Outbound Travel Trips as Percentage of Total Number of Households

Outbound trips as %
of total households
Trip Type
2011
2012
2013
2014
2020
LPO
9.9%
11.7%
14.0%
16.3%
29.7%
LPO
(ex. all HK and Macau)
5.1%
6.3%
7.9%
9.1%
18.8%
South Korea
AP
68.9%
73.8%
80.2%
82.3%
99.6%
Japan
AP
34.4%
37.4%
34.7%
35.0%
37.7%
India
LPO
2.2%
2.5%
2.7%
3.0%
5.8%
(ex. cross border overland to Singapore)
AP
143.9%
150.4%
161.0%
165.5%
211.7%
Taiwan
AP
118.2%
125.8%
139.3%
141.0%
188.2%
Singapore
AP
(ex. cross border overland to Malaysia)
548.4%
546.4%
562.3%
566.1%
696.4%
AP
283.7%
305.9%
332.5%
334.9%
427.8%
China
China (ex HK & Macau trips)
Malaysia
Hong Kong
(ex. non-air travel to China & Macau)
Indonesia
(ex. Singapore and Malaysia same-day)
LPO
8.1%
8.6%
9.7%
10.7%
15.6%
Australia
LPO
75.9%
78.4%
83.1%
89.1%
102.8%
Thailand
(ex. same-day trips to Malaysia & Laos)
AP
31.1%
32.8%
34.2%
35.0%
48.8%
AP
14.5%
17.2%
19.5%
21.4%
30.0%
Philippines
LPO
16.1%
16.9%
17.9%
19.0%
28.3%
New Zealand
LPO
100.3%
101.9%
103.5%
106.8%
122.4%
Using China LPO
15.0%
16.6%
18.2%
19.7%
29.7%
A/P Developed Markets
68.8%
73.4%
76.1%
78.0%
96.7%
A/P Emerging Markets
9.1%
10.3%
11.9%
13.4%
22.6%
Vietnam
Total - 14 markets
(ex. overland border crossing to China)
Key: LPO - Leisure Purpose Trips Only, AP - All Purpose Trips
Q1 2014
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 declining 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).
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 estimated 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 Financial Crisis) has sapped the motivation for outbound
travel. Japanese consumer confidence levels since the
Chart 2. MasterCard Consumer Confidence Index: Japan and Developed Asia/Pacific Compared
100
Optimism
Optimism
Japan
Japan
Asia/Pacific
Developed
Asia/Pacific
Developed
90
80
70
60
50
40
30
20
10
Pessimism
Pessimism
0
H1
1993
H1
1995
H1
1994
H1
1997
H1
1996
MasterCard Insights
H1
1999
H1
1998
H1
2001
H1
2000
H1
2003
H1
2002
H1
2005
H1
2004
H1
2007
H1
2006
H1
2009
H1
2008
H1
2011
H1
2010
H1
2013
H1
2012
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 percentage 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 propensity 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.
Table 3. Outbound Trip Concentration Among the Higher Household Income Brackets
HH Income
Range
OB trips of range
HH in range
as % of total
as % of total HHs
trips = A
=B
Concentration
Ratio (= A/B)
GDP per capita

US$ 2014
Taiwan
>US$15k
95.1%
91.7%
1.0
22,002.03
Hong Kong
>US$20k
90.6%
85.5%
1.1
41,420.59
Singapore
>US$30k
86.1%
77.4%
1.1
53,670.98
Australia
>US$45k
95.2%
85.6%
1.1
62,127.16
Japan
>US$45k
85.5%
73.8%
1.2
41,149.60
New Zealand
>US$40k
89.2%
71.0%
1.3
41,806.73
South Korea
>US$25k
90.5%
64.7%
1.4
25,188.93
Malaysia
>US$15k
87.0%
62.0%
1.4
10,651.95
Vietnam
>US$5k
80.5%
37.5%
2.1
2,063.76
Philippines
>US$10k
72.7%
33.7%
2.2
2,938.13
Thailand
>US$10k
88.5%
39.9%
2.2
6,165.62
Indonesia
>US$10k
97.3%
33.6%
2.9
3,432.37
China
>US$10k
92.8%
26.4%
3.5
7,137.89
India
>US$10k
96.3%
8.9%
10.8
1,389.20
Q1 2014
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 (Taiwan) and 1.4 (South Korea) implying that outbound
travel is quite evenly spread across the household income 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.
Chart 3. Relating GDP per Capita to Concentration Ratio

Ratio of Concentration of Outbound Trips
to Household by Income Against GDP per Capita
Ratio of
Outbound Trips
to HHs
11.0
IN
4.5
Share of outbound trips getting more

concentrated at richer households
4.0
CN
3.5
3.0
ID
2.5
PH
TH
2.0
VN
1.5
KR
MY
NZ
1.0
JP
SG
AU
HK
TW
0.5
At 1.0, trips are perfectly distributed across households

0.0
$0
$10k
$20k
$30k
$40k
GDP per Capita (US$ 2014)
MasterCard Insights
$50k
$60k
$70k
The household propensity for outbound international 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 average 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, suggesting that in this income bracket, households in developing markets are rapidly catching up in their
propensity for outbound travel with their counterparts
in developed markets. But the gap opens up again beyond 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 international 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.
Chart 4. The Income Threshold of International Travel for Leisure

Propensity for Travel Internationally for Leisure by Household Income (US$)
Propensity
to Travel
Developed Country Average
Emerging Asia Average
80%
70%
60%
50%
40%
30%
20%
10%
0%
< 2.5k
5152.5- 10k 10- 20k

5k
15k
25354520- 30k 30- 40k 40- 50k 5025k

35k
45k
60k
6070k
>150k
8010013070- 90k 90- 120k 120- 140k 14080k
100k
130k
150k
Household Income (US$)
Q1 2014
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/Pacific markets.
The destinations were identified in terms of both
cities and countries. For example, some respondents
chose London as their top aspirational travel destination, 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 destinations can also be grouped into city-country combinations (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) combination 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 account 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 highest Asia/Pacific destination is Australia (#8) with less
than half (2.4%) of the Tokyo-Japan combination aspirational 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
Table 4. Top 20 Aspiration Destinations

Top 20 Aspiration Destinations of Developed Asia/Pacific Travelers
1
Paris
8.5%
11
Europe
1.7%
New York
7.0%
12
Los Angeles
1.7%
London
6.7%
13
Hong Kong
1.7%
Japan
4.1%
14
France
1.6%
USA
3.1%
15
Sydney
1.6%
Rome
3.0%
16
Italy
1.5%
Tokyo
2.9%
17
Switzerland
1.5%
Australia
2.4%
18
S. Korea
1.5%
UK
1.8%
19
Maldives
1.2%
10
Hawaii
1.8%
20
Canada
1.1%
Top 20 account for 56.3% of total

Of which Asia/Pacific Destinations 14.1%
MasterCard Insights
very highly in both lists (7.2% in the developing markets 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 relative immaturity of outbound travel in these developing
markets. Two cases in point are the top 20 list of Indonesian 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 destinations) 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 destinations would not be aspirational in a mature market
as they are the first to be realized after which they stop
being aspirational).
may go some length to explain why Japan and India

have the lowest propensity to travel internationally
among the developed and developing Asia/Pacific markets 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 overall 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 aspirational destinations. Similarly it may explain why
India's propensity for international outbound leisure
travel rises much more slowly after the US$10,000 inflection point compared to China (which shares the
same inflection point).
The appearance of domestic destinations in the individual top 20 lists of India (Mumbai, Delhi, Goa and
Srinagar) and Japan (Okinawa, Kyoto and Hokkaido)
Top 20 Aspiration Destinations of Developing Asia/Pacific Travelers

1
Paris
8.4%
11
Seoul
1.8%
Singapore
6.0%
12
Rome
1.8%
London
5.7%
13
Maldives
1.8%
New York
4.3%
14
France
1.6%
Tokyo
4.1%
15
Switzerland
1.6%
USA
3.3%
16
South Korea
1.5%
Japan
3.1%
17
New Zealand
1.3%
Hong Kong
3.0%
18
Bangkok
1.3%
Australia
2.9%
19
Malaysia
1.2%
10
Sydney
2.2%
20
Canada
1.2%
Top 20 account for 58.2% of total

Of which Asia/Pacific Destinations 28.5%
Q1 2014
10
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 household growth (8.7% versus 1.7%) over the forecast period resulting in a ratio of outbound trips to households
that is projected to reach 28.3% in 2020 from 19% in
2014.
Table 5. Philippines
Outbound
Leisure purpose
trips only
2011
2012
2013e
2014e
2020 f
2014-2020
CAGR
Outbound trips (mn)
3.0
3.2
3.5
3.8
6.2
8.7%
Households (mn)
18.4
19.1
19.5
19.8
21.9
1.7%
Total outbound trips

as percentage
of total households
16.1%
16.9%
17.9%
19.0%
28.3%
Breaking down outbound trips by household income, 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.
11
MasterCard Insights
The propensity to travel by household income exhibits 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.
Chart 5. Philippines: 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)
2.0
40%
35%
32%
35%
1.5
30%
25%
1.0
1.9
14%
15%
1.7
15%
11%
0.5
20%
10%
8%
0.8
0.8
0.6
5%
0.4
0.0
0%
< 2.5k
2.55k
510k
In terms of aspirational destinations, Paris takes top

position, followed by the medium and short haul destinations of Singapore and Hong Kong. The percentage of Philippine residents who have selected Hong
Kong as an aspirational destination (5.8%) is the high-
Q1 2014
1015k
1525k
>25k
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.
12
Thailand
International outbound leisure travel trips by Thai residents 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 forecast period, the ratio of outbound trips to total households is projected to reach 48.8% in 2020 from 35%
in 2014.
Table 6. Thailand
All Purpose Outbound trips
(includes same-day
cross-border travel to
Malaysia and Laos)
2011
2012
2013e
2014e
2020 f
2014-2020
CAGR
Outbound trips (mn)
5.4
5.7
6.0
6.2
8.7
5.9%
Households (mn)
17.3
17.5
17.5
17.6
17.8
0.2%

as percentage
of total households
31.1%
32.8%
34.2%
35.0%
48.8%
In Thailand about 88% of outbound trips are accounted 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 account for 75% of all outbound travel). The primary
driver for this is that the number of households earning above US$15,000 is also growing much faster than
the number of households earning below US$15,000.
13
MasterCard Insights
The propensity to travel by household income exhibits a point of inflection at US$10,000 household income levels at which we see a steeper increase in the
propensity to travel.
Chart 6. Thailand: Propensity for International Leisure Travel

3.0
100%
85%
87%
81%
2.5
80%
70%
70%
68%
2.0
58%
60%
1.5
42%
2.3
33%
1.0
1.9
2.0
2.4
2.4
40%
2.0
1.6
0.5
15%
0.4
1.2
16%
20%
0.9
0.4
0%
0.0
< 5k
510k
1015k
1520k
2025k
In terms of aspirational destinations, Tokyo and

Japan take the top two positions. When combined they
account for about 20% of the mindshare for aspirational destinations among Thai households. Paris and
France have a combined mindshare of 8.1%. This is followed 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 aspirational destination mindshare.
Given the relative proximity of Japan (6 hours flight
time) and South Korea (5 hours) to Thailand versus London (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
Q1 2014
2530k
3035k
3545k
4570k
70130k
>130k
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 destination (19.5%) is the highest (Taiwan is second with
14.6%) among the 14 Asia/Pacific markets. Interestingly, Thailand is the only South East Asian outbound
market that did not select Paris as their number one
aspirational destination.
14
Malaysia
International outbound leisure travel trips by Malaysian
residents are estimated at 10.9 million in 2014, and are
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.
Table 7. Malaysia
All Purpose
Outbound Trips
(excludes cross border land
travel to Singapore)
2011
2012
2013e
2014e
2020 f
2014-2020
CAGR
Outbound trips (mn)
8.9
9.6
10.4
10.9
15.2
5.7%
Households (mn)
6.1
6.4
6.5
6.6
7.2
1.5%

as percentage
of total households
143.9%
150.4%
161.0%
165.5%
211.7%
Breaking down outbound trips by household income, 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
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-
15
MasterCard Insights
ber of households earning below US$30,000.

The propensity to travel by household income exhibit a point of inflection occurring at the US$15,000
household income levels at which we see a steeper increase in the propensity to travel.
Chart 7. Malaysia: Propensity for International Leisure Travel

100%
4.5
91%
85%
4.0
82%
83%
75%
80%
3.5
59%
3.0
53%
60%
2.5
40%
4.0
2.0
33%
3.6
30%
3.6
3.7
40%
3.3
1.5
2.6
2.3
1.0
1.7
1.3
1.4
< 5k
510k
20%
0.5
0.0
0%
1015k
1520k
2025k
In terms of aspirational destinations, the ParisFrance 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 - Australia combination with 6.2%. These five combinations
account for close to 42% of total aspirational mindshare. 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).
Q1 2014
2530k
3035k
3545k
4570k
>70k
The percentage of Malaysian residents who have

selected the London - UK combination as an aspirational 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.
16
Singapore
International outbound leisure travel trips by Singaporean residents are estimated at 8.7 million in 2014,
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 domestic tourism is possibly a strong reason for such high
ratios.International outbound leisure travel trips by Singaporean 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
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 domestic tourism is possibly a strong reason for such high
ratios.
Table 8. Singapore
(excludes cross border land
travel to Malaysia)
2011
2012
2013e
2014e
2020 f
2014-2020
CAGR
Outbound trips (mn)
7.8
8.0
8.5
8.7
11.8
5.3%
Households (mn)
1.4
1.5
1.5
1.5
1.7
1.7%

as percentage
of total households
548.4%
546.4%
562.3%
566.1%
696.4%
About 86% of outbound trips in Singapore are accounted 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 households earning below US$100,000.
17
MasterCard Insights
The propensity to travel by household income exhibits a linear type curve which is consistent with our
earlier observation that outbound travel by Singaporean residents is quite evenly spread across income
levels.
Chart 8. Singapore: Propensity for International Leisure Travel

9.0
100%
85%
8.0
87%
88%
90%
93%
93%
78%
75%
80%
7.0
67%
6.0
62%
60%
60%
5.0
4.0
7.2
6.4
3.0
5.1
5.3
7.4
7.5
7.6
7.9
7.9
40%
6.6
5.6
2.0
20%
1.0
0.0
< 5k
520k
2030k
3040k
4050k
5060k
6070k
7080k
80100k
100140k
>140k
In terms of aspirational destinations, the TokyoJapan combination at 8.6% is the most desired destination 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 position 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.
Q1 2014
18
Indonesia
International outbound leisure travel trips by Indonesian 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 outbound trips will grow about seven times faster than
households that is projected to reach 15.6% in 2020
from 10.7% in 2014.
Table 9. Indonesia
Outbound Leisure
Purpose trips only
(excludes Singapore and
Malaysia same-day trips)
2011
2012
2013e
2014e
2020 f
2014-2020
CAGR
Outbound trips (mn)
4.9
5.4
6.1
6.8
10.6
7.6%
Households (mn)
60.7
62.1
62.9
63.6
67.8
1.1%

as percentage
of total households
8.1%
8.6%
9.7%
10.7%
15.6%
Breaking down outbound trips by household income, households earning above US$15,000 per
annum constitute about 75% of the all outbound international 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 outbound 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), followed by China at 3.6. Projecting forward to 2020, the
higher levels of outbound travel growth will come from
97% of all outbound travel).). The primary driver for
19
MasterCard Insights
this is that the number of households earning above

US$10,000 is also growing much faster than the number of households earning below US$10,000.
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 consumer outbound travel rises rapidly after US$40,000.
Chart 9. Indonesia: Propensity for International Leisure Travel

6.0
95%
100%
90%
85%
5.0
80%
70%
4.0
60%
50%
3.0
4.7
4.9
4.4
2.0
3.6
25%
0.1
40%
2.6
18%
14%
1.0
20%
9%
0.9
5%
1%
2%
2%
0.3
0.5
1.3
0.7
0%
0.0
< 2.5k
2.55k
57.5k
7.510k
1015k
1520k
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 followed by London at 6.7%, then Kuala Lumpur at
5.6%, which is another short haul destination like Singapore. 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 selected Kuala Lumpur (5.6%) as a top 20 aspirational
destination. (Indian residents are the only ones who selected Malaysia (4.8%) as a top 20 aspirational destination).
2030k
3040k
4050k
5070k
7090k
90100k
>100k
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 outbound 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 outbound Indonesian travel.
It is interesting that none of the top 20 aspirational

destinations are countries for Indonesians (they are all
Q1 2014
20
Vietnam
International outbound leisure travel trips by Vietnamese residents are estimated at 4.3 million in 2014,
trips will grow about eight times faster than total
household growth (6.7% versus 0.8%) over the forecast 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.
Table 10. Vietnam

(excludes border crossing
to China on foot)
2011
2012
2013e
2014e
2020 f
2014-2020
CAGR
Outbound trips (mn)
2.8
3.4
3.9
4.3
6.4
6.7%
Households (mn)
19.4
19.8
20.0
20.2
21.2
0.8%

as percentage
of total households
14.5%
17.2%
19.5%
21.4%
30.0%
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 households 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 households earning below US$10,000.
income divider after which propensity to consumer
outbound travel rises rapidly.
21
MasterCard Insights
Chart 10. Vietnam: Propensity for International Leisure Travel

7.0
100%
85%
6.0
86%
81%
80%
75%
5.0
64%
69%
60%
4.0
51%
3.0
35%
5.0
5.4
5.6
5.7
40%
4.6
4.2
25%
2.0
20%
3.4
20%
1.0
2.3
10%
1.7
1.3
0.7
0%
0.0
< 5k
2.55k
1015k
1520k
2025k
In terms of aspirational destinations, the ParisFrance combination ranks first with 13.3% of mindshare. 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 destinations account for 64% of total aspirational mindshare. The percentage of Vietnams travelers who
selected Paris (11.9%) and Singapore (9.9%) as aspirational 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.
Q1 2014
2530k
3035k
3545k
4570k
70130k
>130k
Like Indonesia, the fact that Singapore and

Bangkok are in the top six illustrates the relative immaturity 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 income).
22
China
International outbound leisure travel trips by China's
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 average 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. Excluding Hong Kong and Macau as destinations, this ratio is
projected to reach 18.8% in 2020 from 9.1% in 2014
Table 11. China

Outbound Leisure
Purpose trips only,
excludes same-day trips to
Hong Kong and Macau
2011
China - Outbound trips

(mn)
42.6
China - Outbound trips

(mn)
(ex. all HK & Macau)
2013e
2014e
2020 f
2014-2020
CAGR
50.5
61.1
71.2
134.0
11.1%
21.7
27.3
34.3
40.0
84.8
13.3%
Households (mn)
429.6
432.3
435.1
437.8
451.7
0.5%

as percentage of total
households
9.9%
11.7%
14.0%
16.3%
29.7%

as percentage of total
households
(ex all HK & Macau)
5.1%
6.3%
7.9%
9.1%
18.8%
2012
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 accounting 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 Indonesia 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 households 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-
23
MasterCard Insights
holds earning below US$10,000.

income divider, after which the propensity to consumer
outbound travel rises rapidly.
Chart 11. China: Propensity for International Leisure Travel

3.5
82%
79%
85%
85%
85%
85%
85%
85%
85%
90%
81%
80%
72%
3.0
70%
62%
2.5
57%
60%
48%
2.0
50%
1.5
29%
2.9
3.1
3.0
3.2
3.2
3.2
3.2
3.2
3.2
3.2
40%
2.7
2.3
30%
2.1
1.0
18%
1.8
20%
8%
0.5
1.1
5%
10%
0.7
0.2
0.3
0.0
0%
< 5k
510k
1015k
1520k
2025k
2530k
3035k
3540k
4045k
4550k
5060k
6070k
7080k
80- 90- 120- 140- >

90k 120k 140k 150k 150k
In terms of aspirational destinations, the ParisFrance 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 European countries and the US). The Sydney-Australia combination 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.
Q1 2014
24
India
International outbound leisure travel trips by Indias residents are estimated at 7.9 million in 2014, and are
will grow much faster than total household growth
(13.0% versus 1.1%) over the forecast period resulting 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 lowest 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%)
Table 12. India

(excludes border crossing
to China on foot)
2011
2012
2013e
2014e
2020 f
2014-2020
CAGR
Outbound trips (mn)
5.8
6.4
7.2
7.9
16.5
13.0%
Households (mn)
257.4
260.6
263.8
266.9
285.1
1.1%

as percentage
of total households
2.2%
2.5%
2.7%
3.0%
5.8%
Indian households earning above US$10,000 per

annum constitute about 96% of all outbound international leisure trips (2014) and at the same time make
up only 8.9% of all households. Dividing these percentages (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 concentration 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. Projecting forward to 2020, the higher levels of outbound
travel growth will come from Indian households earn-
25
MasterCard Insights
ing above US$7,500 (16% of households are in this

category and they account for 99.7% of all outbound
travel).
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.
Chart 12. India: Propensity for International Leisure Travel

6.0
95%
100%
90%
85%
5.0
80%
70%
4.0
60%
50%
3.0
5.3
40%
4.7
30%
2.0
5.0
40%
3.9
0.1
20%
2.8
1.0
20%
2.2
15%
1.7
5%
0%
0%
0%
1.1
0.8
0.3
0.0
0%
< 2.5k
2.55k
57.5k
7.510k
1015k
1520k
In terms of aspirational destinations, the New YorkUSA 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 account for 37.1% of total aspirational mindshare. Interestingly, only the Indians selected Malaysia (4.8%) as a
top 20 aspirational destination.
2030k
3040k
4050k
5070k
7090k
90100k
>100k
This suggests that there is still a lot of pent up demand

for domestic travel in India which competes with international 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 compared to China (which shares the same inflection
point).
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 domestic and account for 17% of aspirational mindshare.
Q1 2014
26
Japan
International outbound leisure travel trips by Japanese
will grow faster than total household growth which is
declining (1.1% versus -0.2%) over the forecast period
2014. This ratio is the lowest among the seven developed 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.
Table 13. Japan

All Purpose
Outbound trips
2011
2012
2013e
2014e
2020 f
2014-2020
CAGR
Outbound trips (mn)
17.0
18.5
17.1
17.3
18.4
1.1%
Households (mn)
49.4
49.4
49.4
49.3
48.9
- 0.2%

as percentage
of total households
34.4%
37.4%
34.7%
35.0%
37.7%
About 80% of outbound trips in Japan are accounted for by households earning above US$50,000
travel is quite evenly spread across income levels. Projecting 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).
income threshold, above which it rises more rapidly.
Despite the inflection point, the overall propensity
27
MasterCard Insights
curve is still more or less linear. This is consistent with

our earlier observation that outbound travel by Japanese residents is quite evenly spread across income levels.
Chart 13. Japan: Propensity for International Leisure Travel

1.8
70%
59%
1.6
60%
48%
1.4
44%
50%
41%
1.2
40%
1.0
30%
27%
0.8
31%
1.7
29%
26%
20%
0.6
30%
1.4
1.3
1.2
16%
20%
0.8
0.4
0.8
0.9
0.9
0.7
0.6
0.5
10%
0.2
0.0
0%
< 10k
1025k
2535k
3545k
4550k
5060k
6070k
7090k
90120k
120150k
>150k
In terms of aspirational destinations, the ParisFrance combination ranks first with 9.5% of mindshare. 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 (Okinawa - #7, Kyoto - #12 and Hokkaido - #18). This suggests 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.
Q1 2014
28
Australia
International outbound leisure travel trips by Australian
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
2014.
Table 14. Australia

Outbound Leisure
Purpose trips only
2011
2012
2013e
2014e
2020 f
2014-2020
CAGR
Outbound trips (mn)
6.5
6.9
7.4
8.1
10.0
3.7%
Households (mn)
8.6
8.8
8.9
9.0
9.7
1.2%

as percentage
of total households
75.9%
78.4%
83.1%
89.1%
102.8%
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 forward 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 account for 70% 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 (which are actually declining).
The propensity to travel by household income exhibits a linear type curve which is consistent with our
29
MasterCard Insights
earlier observation that outbound travel by Australian

residents is quite evenly spread across income levels.
Chart 14. Australia: Propensity for International Leisure Travel

80%
2.5
70%
70%
65%
2.0
57%
53%
60%
55%
50%
50%
1.5
43%
39%
40%
41%
40%
35%
1.0
27%
30%
2.0
30%
1.8
1.4
1.0
0.5
0.8
1.1
1.1
1.1
1.5
1.5
1.6
20%
1.2
0.8
10%
0.0
0%
< 20k
2030k
3040k
4045k
4550k
5060k
6070k
7080k
8090k
90100k
100120k
120150k
>150k
In terms of aspirational destinations, the New YorkUSA 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 combination at 3.9%. These five combinations account for
close to 46% of total aspirational mindshare. It is interesting 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.
Q1 2014
30
New Zealand
International outbound leisure travel trips by New
Zealand residents are estimated at 1.9 million in 2014,
trips will grow over three times faster than total household growth (3.3% versus 1.0%) over the forecast period resulting in a ratio of outbound trips to households
that is projected to reach 122.4% in 2020 from
106.8% in 2014.
Table 15. New Zealand

Outbound Leisure
Purpose trips only
2011
2012
2013e
2014e
2020 f
2014-2020
CAGR
Outbound trips (mn)
1.7
1.7
1.8
1.9
2.3
3.3%
Households (mn)
1.7
1.7
1.7
1.8
1.9
1.0%

as percentage
of total households
100.3%
101.9%
103.5%
106.8%
122.4%

New Zealand households earning above US$40,000
57% of all households and suggests that outbound
travel is quite evenly spread across income levels. Projecting forward to 2020, outbound travel growth will
mostly come from households earning above
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.
31
MasterCard Insights
outbound travel rises more rapidly. Despite the inflection point, the overall propensity curve is still more or
less linear which is consistent with our earlier observation that outbound travel by New Zealand residents is
quite evenly spread across income levels.
Chart 15. New Zealand: Propensity for International Leisure Travel

80%
3.5
70%
3.0
70%
64%
63%
60%
57%
2.5
50%
45%
2.0
41%
41%
42%
40%
3.2
1.5
30%
2.7
25%
1.0
2.7
30%
2.4
20%
1.7
1.7
1.8
1.9
20%
1.3
0.5
1.0
10%
0.8
0.0
0%
< 15k
1525k
2535k
3540k
4050k
5060k
6070k
7080k
80100k
100130k
>130k
In terms of aspirational destinations, the LondonUK combination is the most desired destination at
12.4%. This is followed by the New York-USA combination 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.
Q1 2014
32
South Korea
International outbound leisure travel trips by South Korean residents are estimated at 15.5 million in 2014,
year to reach 19.2 million trips by 2020. Total outbound trips will grow much faster than total household
2014. Among the seven developed economies covered, South Korea has the second lowest ratio after
Japan (35% in 2014)
Table 16. South Korea

All Purpose
Outbound trips
2011
2012
2013e
2014e
2020 f
2014-2020
CAGR
Outbound trips (mn)
12.7
13.7
15.0
15.5
19.2
3.7%
Households (mn)
18.4
18.6
18.7
18.8
19.3
0.4%

as percentage
of total households
68.9%
73.8%
80.2%
82.3%
99.6%

South Korean households earning above US$30,000
travel is quite evenly spread across income levels. Projecting 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 account for 50% of all outbound travel). The primary
driver for this is that the number of households earning above US$45,000 is also growing much faster than
the number of households earning below US$45,000.
outbound travel rises more rapidly. Despite this, the
33
MasterCard Insights
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.
Chart 16. South Korea: Propensity for International Leisure Travel

90%
3.5
77%
72%
80%
70%
3.0
65%
62%
70%
59%
54%
2.5
60%
46%
2.0
50%
42%
37%
3.2
1.5
2.9
2.5
25%
1.0
21%
2.6
3.0
2.3
22%
1.8
30%
1.9
1.5
0.5
40%
2.7
20%
1.1
0.9
0.9
10%
0%
0.0
< 20k
2030k
3040k
4045k
4550k
5060k
6070k
7080k
8090k
90100k
100120k
120150k
>150k
In terms of aspirational destinations, the ParisFrance combination is the most desired destination at
13.8%. This is followed by the New York-USA combination 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
total mindshare.
Q1 2014
34
Hong Kong
International outbound leisure travel trips by Hong
Kong residents are estimated at 8.7 million in 2014,
year to reach 11.6 million trips by 2020. Total outbound trips will grow about seven times faster than
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 households after Singapore, among the 14 Asia/Pacific markets 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.
Table 17. Hong Kong

All Purpose Outbound
trips (excludes non-air
travel to China and Macau)
2011
2012
2013e
2014e
2020 f
2014-2020
CAGR
Outbound trips (mn)
7.1
7.8
8.6
8.7
11.6
4.9%
Households (mn)
2.5
2.6
2.6
2.6
2.7
0.7%

as percentage
of total households
283.7%
305.9%
332.5%
334.9%
427.8%
Some 74% of outbound trips in Hong Kong are accounted for by households earning above US$35,000
travel is quite evenly spread across income levels. Dividing 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
Projecting forward to 2020, most outbound travel
growth will come from households earning above
35
MasterCard Insights
earning above US$80,000 is also growing much faster

than the number of households earning below
US$80,000.
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
Chart 17. Hong Kong: Propensity for International Leisure Travel

6.0
120%
95%
5.0
84%
82%
87%
96%
96%
97%
94%
90%
100%
82%
4.0
80%
64%
64%
60%
3.0
4.3
2.0
3.4
4.3
4.5
4.6
4.8
5.0
5.1
5.1
5.1
5.0
3.4
40%
1.0
20%
0.0
0%
<20k
2035k
3545k
4550k
5060k
6070k
7080k
8090k
90100k
100120k
120140k
>140k
In terms of aspirational destinations, the Tokyo Japan combination is the most desired destination at
14.7%. This is followed by the London-UK combination 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.
Q1 2014
36
Taiwan
International outbound leisure travel trips by Taiwanese
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 projected to reach 188.2% in 2020 from 141% in 2014.
travel is quite evenly spread across income levels. Dividing these percentages (82% by 73%) yields a concentration ratio of 1.1 which is the lowest (tied with
Singapore which is also at 1.1) among the 14 Asia/Pacific markets.
Close to 82% of outbound trips in Taiwan are accounted for by households earning above US$25,000
73% of all households and suggests that outbound
Table 18. Taiwan

All Purpose
Outbound trips
2011
2012
2013e
2014e
2020 f
2014-2020
CAGR
Outbound trips (mn)
8.8
9.4
10.4
10.6
14.2
5.1%
Households (mn)
7.4
7.4
7.5
7.5
7.6
0.2%

as percentage
of total households
118.2%
125.8%
139.3%
141.0%
188.2%
Projecting forward to 2020, growth in outbound

travel will come from households earning above
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
37
MasterCard Insights
Chart 18. Taiwan: Propensity for International Leisure Travel

3.0
90%
81%
80%
2.5
67%
64%
70%
59%
54%
2.0
60%
50%
50%
40%
1.5
2.8
40%
30%
2.2
1.0
1.9
2.3
2.0
30%
1.7
1.4
0.5
20%
1.0
10%
0%
0.0
<2.5k
2.55k
515k
1525k
2535k
3545k
4560k
>60k
In terms of aspirational destinations, the Tokyo Japan combination is the most desired destination at
14.7%. This is followed by the Paris-France combination 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
total mindshare. Nine of the top 20 destinations are
within Asia/Pacific with Japan being the highest ranked
one.
Q1 2014
38
39
MasterCard Insights
Appendix: Research
Methodology and Data Sources
To calculate the number of households within the

stated income brackets, data from Canback-Danglar
was used.
Forecasting Methodology
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 excursionist 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 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 sameday excursionist travel are not available to net out from
overall outbound travel we have used proxies like overland 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). Note that there are some reports that forecast
India outbound 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.
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 extended 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 estimated numbers of households in each income bracket
using estimates from Canback-Danglar, thereby generating estimates of average trips per household by their
annual incomes.
For each household income bracket the total number 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 propensity 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 outbound 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 applied 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 Purchasing Priorities. These surveys have been conducted
bi-annually since 1993 on 400 to 800 respondents per
market aged 18 - 64. Coverage extends to 27 countries 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.
Q1 2014
40
1. See Global Destination Cities Index by MasterCard Worldwide.

2. See Appendix for research methodology.
3. In general we have tried to eliminate same-day excursionist 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 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 possible).
41
MasterCard Insights
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 outbound at 50 million by 2020, but these invariably use allpurpose 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.
About the Authors

Desmond Choong
Desmond Choong is a Research Economist with the
MasterCard Center for Inclusive Growth. In this capacity, 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 experience 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 University.
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 multinational companies.
He is a published author on consumer markets,
economic development, trade and international relations. Yuwa studied philosophy, political science, and
economics at Trent University, and pursued post-graduate 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 enthusiastic apprentice in the fine art of gardening.
Q1 2014
42
www.mastercardworldwide.com
2011
2014 MasterCard

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Knowledge Leadership

The Future of Outbound Travel in Asia/Pacific

The Future of Outbound Travel

Combining real GDP growth projections, household

Table 1. 2014-2020 Outbound Travel Forecast

Outbound trips (mn)

(ex. same-day trips to HK & Macau)

(ex. all HK and Macau)

(ex. cross border overland to Singapore)

(ex. cross border overland to Malaysia)

(ex. non-air travel to China & Macau)

(ex. Singapore and Malaysia same-day)

(ex. same-day trips to Malaysia & Laos)

(ex. overland border crossing to China)

Asia/Pacific Developed Markets

Asia/Pacific Emerging Markets

Key: LPO - Leisure Purpose Trips Only, AP - All Purpose Trips

Using China LPO

(ex. same-day trips to HK & Macau)

Emerging Asia/Pacific currently has about one and a

Currently Japan outbound is the second largest in

Chart 1 also shows that outbound travel is generally

Chart 1 locates the positions of each of the 14

Chart 1. Outbound Travel Growth versus Real GDP Growth

Bubble Size = 2020

Outbound Trip Growth

In addition to estimating the overall growth rates of

Among the emerging markets, Indias ratio of 3% of

Table 2. Number of Outbound Travel Trips as Percentage of Total Number of Households

(ex. all HK and Macau)

(ex. cross border overland to Singapore)

(ex. cross border overland to Malaysia)

(ex. same-day trips to HK & Macau)

(ex. non-air travel to China & Macau)

(ex. Singapore and Malaysia same-day)

(ex. same-day trips to Malaysia & Laos)

Using China LPO

A/P Developed Markets

A/P Emerging Markets

(ex. overland border crossing to China)

(ex. same-day trips to HK & Macau)

Key: LPO - Leisure Purpose Trips Only, AP - All Purpose Trips

1990s seems to concur with this view as shown in Chart

Japan is an anomaly among the developed markets

Table 3 shows how outbound trips are dispersed

GDP per capita

A concentration ratio of "1" therefore denotes that

Chart 3. Relating GDP per Capita to Concentration Ratio

Share of outbound trips getting more

At 1.0, trips are perfectly distributed across households

GDP per Capita (US$ 2014)

Chart 4. The Income Threshold of International Travel for Leisure

Developed Country Average

Emerging Asia Average

5152.5- 10k 10- 20k

25354520- 30k 30- 40k 40- 50k 5025k

Household Income (US$)

Over 2012 and 2013, MasterCard surveyed over

Table 4. Top 20 Aspiration Destinations

Top 20 account for 56.3% of total

may go some length to explain why Japan and India

Top 20 Aspiration Destinations of Developing Asia/Pacific Travelers

Top 20 account for 58.2% of total