London, Paris, New York and other well-established global cities have long been destinations for business travellers and tourists alike.
While cities like these are still important, what’s perhaps surprising about the recently released MasterCard Index of Global Destination Cities is the rise of some new cities as top destinations and the reasons that made them so attractive. Singapore is ranked fourth with 11.4 million visitors, for example, right after London, Paris and – surprisingly – Bangkok.
The Index ranked 132 destination cities globally in terms of visitor arrivals and cross-border spending.
On a global basis, the top destinations in terms of visitor arrivals were London, Paris, Bangkok, Singapore and Hong Kong. Istanbul ranked a surprisingly seventh and New York ranked a relatively low 12th.
New species
Barcelona was placed 16th, the only European city to grow more than 20 percent, represented a new species that is reinventing itself.
Over the past decade, he said, it has layered a business dimension on top of its role as a tourist destination by encouraging creative industries, conferences and meetings to come to Barcelona.
In terms of spending by visitors arriving by air, the top global destination cities were London, New York, Paris, Bangkok and Frankfurt. According to MasterCard global economic advisor Yuwa Hedrick-Wong, Singapore dropped to ninth spot and was disadvantaged because the Index only captures travel by air and doesn’t include the many visitors who drive in from Malaysia.
Connectivity
While it would be easy just to look at the number of visitor arrivals in evaluating top destination cities, Hedrick-Wong said the Index also looks at “the importance of how they’re connected”.
More connected cities, he said, are more robust and innovation will be faster.
As just one example, highly connected New York City was responsible for “10 percent of jobs created in 2010” in the US even though it accounts for just three percent of the US population.
Looking at corridors is also important, and he cited the examples of how "extremely strong" connections along the New York-Tel Aviv corridor helped to propel growth and how Dubai as well as Beirut are destinations “where people visit from adjacent areas” in the Middle East.
What’s perhaps most useful about the Index is the insights it can provide on why some cities have risen to become more popular destinations.
Nodal hubs
As MasterCard said in introducing the Index, “the leading cities of the world are the very nodal hubs that knit the global economy together” and cities will “play a bigger role in driving global economic growth and connectivity”.
Moreover, it said, “international travel is a powerful trend that shapes global commerce and underpins the growth of key industries.” Hedrick-Wong added that “cities are the cradle for economic growth,” and “urbanisation sets the platform for higher growth and prosperity”.
What’s causing newer global cities to rank higher, said Hedrick-Wong, is that “companies are shifting their global headquarters to emerging market cities.” When a company sets up its global headquarters in a city, he noted, economic growth can increase and business travel from around the world also often rises.
Business travel
Asked about key factors that could propel top cities in Southeast Asia higher, Hedrick-Wong emphasised that “business travel is an important driver”.
The companies shifting their global headquarters to emerging market cities and driving this growth are not just Fortune 500 companies, he noted, but smaller companies as well.
He also said that there is “a business dimension related to creative industries” and cities that want to grow “need to have something different to offer to attract top flight businesses”. One example, he said, activities like hosting the Formula 1 race and the film festival in Singapore would be important in attracting players in the creative industries.
Specifically within the Asia Pacific region, Bangkok, Singapore and Hong Kong are ranked as the top cities for visitor arrivals while Tokyo, Beijing and Manila rounded out the top ten in 8th, 9th and 10th place respectively. Hedrick-Wong said that Singapore businesses are ahead of companies in other cities in the region in marketing themselves.
The Index clearly has important implications for Singapore businesses as it seeks to grow and expand its economy.
To become a more global city, Singapore will need to continue to attract more global headquarters. Attracting these companies will mean continually offering something different and making sure that the environment has enough buzz to attract creative industries.
While competition for new businesses and growth is indeed growing, continuing to expand the range of creative offerings and marketing itself effectively remain vital for Singapore to maintain or improve its high ranking.
Richard Hartung | 19 September 2011
