BrandArena: Digitalization Enhances Convenience for African Tourists - Reports Mastercard Economics Institute

Thursday 27 June 2024

Digitalization Enhances Convenience for African Tourists - Reports Mastercard Economics Institute

The travel sector in 2024 is breaking new ground, with consumer spending on travel remaining strong and passenger traffic seeing significant increases, according to the latest global report from the Mastercard Economics Institute. The ‘Travel Trends 2024’ report offers in-depth insights into the evolving landscape of the travel industry across various markets.

Despite fluctuating exchange rates and different levels of affordability, the desire to travel is stronger than ever. In 2024, the travel sector is thriving, with nine out of the last ten record-setting spending days in the global cruise and airline industry occurring this year. 

“The travel sector in Africa is recovering well, complemented by an appetite to discover destinations that offer nature, culture, and authentic experiences. It’s great to see travelers extend their stays, and also use more digital payments, both of which are very positive for the tourism industry at large, as well as local governments building diversified economies,” said Natalia Lechmanova, Chief Economist EEMEA at Mastercard Economics Institute.

In addition, growing digitalization is driving greater convenience for tourists visiting Sub-Saharan Africa. The fast growth in adopting digital payments has also meant a lower reliance on cash in the region, resulting in shifts in spending patterns within tourism. According to Mastercard Economics Institute estimates, the percentage of tourism cash volumes (measured by ATM withdrawals as a proportion of card spend) made by tourists while visiting Sub-Saharan Africa dropped to the lowest point on record in 2024 – about 10 percentage points lower compared to 2019. While domestically, most digital payments across the region are made through mobile money payments, travelers rely on their cards to make payments in the region more than ever before.

Drawing on a unique analysis of aggregated and anonymized transaction data, including Mastercard SpendingPulse™, and third-party data sources, the report takes a deep dive into key travel trends globally for the year and beyond, including:

Record-breaking travel

International tourist arrivals to Africa have exceeded pre-pandemic levels for the first time in the first quarter of 2024. During the first quarter of South Africa welcomed 2.4 million visitors from the rest of the world, representing a 15.4% increase compared to the same period in 2023. Mauritius recorded a 16% increase over the same period. In 2023, tourist arrivals to Tanzania increased by 24.3% to a record-breaking 1,808,205.

Leisure for longer

Travelers to South Africa are extending their trips by almost two extra days (from 7.8 to 10.6 days) compared to pre-pandemic. The global average is one extra day, a trend driven by warmer climates and affordable destinations. The Mastercard Economics Institute found a clear inverse relationship between the price of the destination and the incremental number of days tourists spend while in those destinations. In other words, the cheaper the destination, the longer the stay.

Experience economy on the go

Consumers have prioritized meaningful experiences over material goods, even when traveling. Spending on experiences now totals 12% of tourism sales, according to SpendingPulse Destinations which measures in-store and online retail sales across all forms of payment - the highest point in at least five years as of March 2024. Memorable events are driving travel trends, whether it is for concerts (like Taylor Swift shows) or sporting events (like the Cricket World Cup).

Top trending destinations

Japan (#1), Ireland (#2) and the UAE (#9) are among the global frontrunners for top trending destinations in the last 12 months[3]. Looking forward however, Munich ranks as the top trending destination for the next three months (June-August 2024)[4] given the European Championship action. From South Africa, the top 5 trending destinations to escape the winter are Dubai, Mauritius, Istanbul, Frankfurt, and Nairobi. Cape Town is among the top three trending destinations from Saudi Arabia.

Comprehensive support to travelers and tourism sector

Mastercard is dedicated to helping the global tourism sector welcome travelers through a range of services, from market analysis and high-frequency data insights that help make sense of changing consumer trends to customer engagement strategies that personalize the travel experience and drive brand loyalty. And with comprehensive travel benefits and convenience, cardholders can enjoy their travel experiences and everyday purchases with peace of mind.

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