THE BLOG
05/29/2013 12:47 pm ET Updated Dec 06, 2017

Destination Cities: The New Bellwether for Economic Growth and the Rebalancing of the Planet

Cities have long been important, but they are poised to become even more so in the future. In fact, according to the United Nations Population Fund, the urban age started back in 2006 when more people live in cities than in the countryside for the first time in history.

Capitals of nations, financial hubs, epicenters of the arts and innovation -- cities are still all of those things and more. But more and more, cities as travel hubs are also becoming economic, policy, and geographic bellwethers. And they are increasingly interconnected not only commercially and digitally, but also in the most direct way possible -- more residents of cities are visiting other cities than ever before.

And one of the best windows giving a view into this emerging phenomenon is the annual Global Destination Cities Index that MasterCard publishes, which measures a city's role as a destination for international visitors (defined as those arriving by air and stay for at least one night, which excludes arrivals who are in transit to another destination), and their cross-border spending when visiting a destination city.

According to the Index, the growth momentum of international visitors visiting 132 of the world's most important destination cities is astonishing. Despite the anemic global economic recovery, the rates of growth of international visitors in these 132 destination cities and their cross-border spending are 2.3 times and 1.8 times faster than the growth in real world GDP respectively since 2009.

International tourism is clearly becoming a vital and resilient export for the leading destination cities in the world and its economic and social benefits are far-reaching. The hospitality industry, the transport industry and food and beverage catering industry, among others, are the primary and direct beneficiaries of the demand created by international visitors. These are some of the most labor-intensive industries, which makes tourist spending a potent driver of employment and income in a destination city.

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To the extent that the destination cities succeed in attracting more international visitors, there is the inevitable pressure on improving public infrastructure and facilities.

With the right policy responses, a virtuous circle can be set in motion. More international visitors lead to more and better investment to improve the cityscape and the overall urban environment, which in turn makes the destination city more attractive to more international visitors. Businesses are then encouraged to invest in the city, further improving employment and income.

But even in a slower-growing global economy, destination cities could play a much larger role in sustaining global service trade, while supporting their respective national economies through stronger growth in employment and income in their urban economies.

For the first time since the Index was conducted in 2010, an Asian city tops the list. In this case, it's Bangkok, beating London, the world's top ranked destination city by international visitor arrivals from 2009 to 2012.

Twenty of the fastest growing destination cities since 2009 are found mostly in the global south: 12 in Asia, three in Latin America, two in the Middle East, two in Eastern Europe, and one in Africa.

With the dominance of the Asia/Pacific region, this year's index reflects both the rise of the global south and the overall rebalance of the globe.