Mastercard Economics Institute Study: AI and Exchange Rate Fluctuations Reshape Travel Market, Business Travel Demand Expands in Asia-Pacific

The following is the Japanese translation of the press release originally announced in Singapore on May 14.

According to the latest report "The New Travel Equation: Macro, Machines, Motivation" by the Mastercard Economics Institute (MEI), five of the top 10 cities globally with the most significant growth in business travel demand compared to leisure travel are located in the Asia-Pacific region. Among these, Hyderabad (3rd) and Bengaluru (4th) in India rank highly.

This report, based on Mastercard's aggregated and anonymized data, reveals that the rapid expansion of the technology and AI industries is attracting business travelers to fast-growing hub cities in the Asia-Pacific region. Meanwhile, the proliferation of AI-powered travel planning, exchange rate fluctuations, and changes in consumer behavior are also altering destination choices and spending patterns within and outside the region.

India Emerges as a Major Business Travel Hub

MEI developed the "Business vs Leisure Momentum Index" to understand which regions are experiencing higher business travel demand relative to leisure travel. This index focuses on changes in the composition of business and leisure travel, rather than just visitor numbers. Specifically, it calculates the change in the proportion of business use in total international spending at hotels and restaurants for each destination from 2024 to 2025, combined with the change in the proportion of business use in total flight bookings during the same period.

The index identified Abu Dhabi as the global leader, driven by the United Arab Emirates' (UAE) strengthening position as a global business hub. However, the report also points out uncertainties in the city's outlook amidst increasing macroeconomic and geopolitical uncertainties.

Five of the top 10 cities in the index are in the Asia-Pacific region, indicating a particularly strong growth in the proportion of business travel within the overall travel demand in the region. India, in particular, saw four cities—Hyderabad (3rd), Bengaluru (4th), New Delhi (6th), and Mumbai (7th)—make the top 10, underscoring the rapid expansion of the country's technology industry. Seoul also ranked 8th, highlighting the region's presence.

David Mann, Mastercard's Chief Economist for Asia Pacific, stated:

"This isn't just about which cities are the busiest. It's about where business travel is taking a larger share of overall travel demand. These movements in parts of Asia Pacific reflect larger structural shifts in where companies are investing and building their foundations. We're seeing this particularly around technology and AI hubs. The impact of these shifts extends beyond the travel industry, influencing decisions for tourism boards, city planners, transportation providers, and hospitality businesses."

AI Influences Not Only How Travel is Planned, but Also Where It's Chosen

The report also analyzes the impact of Artificial Intelligence (AI) on traveler behavior. MEI utilized Mastercard's aggregated and anonymized data to compare spending patterns between US cardholders who are paid subscribers of AI platforms and those who are not, after adjusting for similar total spending. The results revealed significant differences in travel behavior between the two groups.

Paid subscribers of AI platforms spent approximately twice as much on accommodation compared to non-subscribers, and also showed higher spending proportions in other travel-related categories. Notably, AI may also be influencing destination choices. For example, Leipzig, Germany, known as a more affordable and less crowded alternative to Berlin, saw 31% of US traveler spending attributed to paid AI platform subscribers. Similar trends were observed in other lesser-known destinations that are gaining attention as alternatives to major tourist cities. These findings suggest that AI may be broadening travelers' options and increasing interest in destinations that were previously less explored.

Exchange Rate Fluctuations Impact Travel Demand in Asia-Pacific

"Value for money" remains a crucial factor when choosing travel destinations. MEI's analysis of international tourism data over the past 30 years indicates that, on average, a 10% depreciation in a destination's currency leads to a 2.4% increase in inbound tourist numbers. However, the magnitude of this impact varies significantly across markets.

Malaysia, for instance, ranks third globally among countries whose tourism demand is highly sensitive to exchange rate fluctuations, following Turkey and Argentina. A 10% depreciation of the Malaysian Ringgit is associated with an 8% increase in inbound tourist numbers, more than three times the global average. In contrast, Japan would see a 2.7% increase and Taiwan a 3.3% increase under the same conditions. With ongoing financial market volatility and unstable US dollar movements, these exchange rate trends could significantly influence inbound demand in the Asia-Pacific region.

David Mann, Mastercard's Chief Economist for Asia Pacific, commented:

"What's consistent across the data in this report is that travelers are adapting flexibly to changing environments. They are changing destinations, adjusting timing, and looking for options that offer better value. This report aims to help travel industry stakeholders understand these shifts in a timely manner, assisting businesses and policymakers in making more informed decisions in a rapidly evolving landscape."

The full report can be found here, and other insights from MEI can be accessed here.

About Mastercard Economics Institute (MEI)

MEI leverages advanced analytics and Mastercard's unique data assets to provide insights into global and regional economic trends. Established in 2020, it offers timely analysis and economic monitoring services on consumer spending, retail and travel trends, and other regional and global economic indicators to corporations, governments, and policymakers. Through its thought leadership series and Mastercard's specialized product suite, MEI provides valuable perspectives to support decision-making and foster sustainable economic growth worldwide.