Household Spend on International Travel to Reach $5,300 Annually
SAN FRANCISCO–(BUSINESS WIRE)–Visa Inc. (NYSE:V) today released the results of a new study that
forecasts a significant increase in international travel by households
globally over the next decade. The study estimates that roughly 282
million households will plan at least one international trip per year by
2025, up nearly 35 percent from 2015.
The study looked at current travel patterns of Visa-branded cardholders
across the globe combined with industry estimates and forecasts for
travel. Among those households most likely to travel internationally,
Visa’s study estimates that spending will reach an average of $5,3051
per household, per year, by 2025. The study also identified key drivers
expected to impact global travel over the next decade, including a
growing middle class globally, greater Internet connectivity, improved
transportation infrastructure across many countries, and an aging global
population with more time for leisure travel.
“Traveling internationally will become more common and attainable in the
future thanks to changing demographics, combined with technology
advances that make traveling abroad easier and less expensive,” said
Wayne Best, Chief Economist, Visa Inc. “What will emerge is an expanding
“traveling class” that will spend a growing portion of their household
income on cross-border travel. Tomorrow’s traveling class will likely be
older and hail from emerging markets — looking very different from
today’s typical international traveler.”
The study, which was conducted with Oxford Economics, analyzed projected
spend by country and region. The chart below shows the top 10 countries
based on estimated spend on global travel in 2025.
Travel spend amongst HH’s earning $20K+ annually ranked by projected
2025 spend. Figures are in USD billions (constant 2015 prices).
|2||United States of America||$101.0||$134.1||33%|
|6||Hong Kong, China||$26.7||$47.4||78%|
Highlights of the global report include:
The Rise of a New Global Traveling Class: Growing income levels
around the world are creating a new “traveling class”. The study
uncovered that worldwide, households that make at least $20,000 per
year account for more than 90 percent of spending on international
travel today. By 2025 it is estimated that nearly half of all global
households (945 million) will be within this income range, spurring
greater international travel and spending, particularly by households
from emerging markets such as China, Russia, and Brazil.
Global Aging: By 2025, travelers aged 65+ will more than double
their international travel to an estimated 180 million trips,
accounting for one-in-eight international trips globally. The study
estimates that older travelers will be able to afford longer trips
that provide greater comfort at higher prices. Trends such as “medical
tourism,” whereby aging populations undertake international travel for
medical purposes, will also take hold in the future.
Increasing Connectivity: The combined forces of globalization
and technology are expanding access. Construction of more than 340 new
airports is expected over the next decade, creating new routes and
destinations that will make international travel easier and more
convenient. At the same time, awareness of travel options is spreading
with the rapid uptake in Internet access and the number of mobile
devices around the world. Digital connectivity is not only fostering
greater spontaneity in travel, but also spurring a broader array of
personalized travel and tourism options as well.
An executive summary along with country and region-specific data can be
found on www.visa.com/travelinsights.
Visa estimated the number of households traveling internationally by
comparing Visa-branded cardholders in a given country who have made at
least one face-to-face transaction abroad versus the population of all
active cardholders in the source country. The figures were adjusted to
be representative of the source country’s population regardless of
payment methods used by households. The propensities were then used as
an input in the forecasts developed by Oxford Economics for the study.
Oxford Economics used survey data on the age and income of international
travelers from a sample of 10 countries to calculate international
travel frequencies and share of travel by age bracket and income class.
The results were extrapolated to a broader set of countries based on
their classification as developed or emerging markets and key variables
such as GDP per capita and total international arrivals per capita. The
estimated travel shares were then compared with each country’s household
income distribution and age distribution to develop a historical
relationship from which to project international travel shares and
volumes by income class and age bracket from 2005 to 2025.
About Visa Inc.
Visa Inc. (NYSE:V) is a global payments technology company that connects
consumers, businesses, financial institutions, and governments in
more than 200 countries and territories to fast, secure and reliable
electronic payments. We operate one of the world’s most advanced
processing networks — VisaNet — that is capable of handling more than
65,000 transaction messages a second, with fraud protection for
consumers and assured payment for merchants. Visa is not a bank and does
not issue cards, extend credit or set rates and fees for consumers.
Visa’s innovations, however, enable its financial institution customers
to offer consumers more choices: pay now with debit, pay ahead with
prepaid or pay later with credit products. For more information, visit usa.visa.com/about-visa,
1 The estimate includes typical spending during the trip,
such as food and hotel, but not prior to the trip, such as buying an
Connie Kim, +1 212-521-3962