The COVID-19 pandemic brought global travel to a standstill, and the recovery has been uneven. Several interconnected factors have contributed to the slower-than-expected return of Asian outbound travel to Europe.
Initially, some Asian travellers, particularly those from China, showed a preference for domestic or regional travel post-COVID. This is driven by a combination of factors, including ease of travel, lower costs, and a desire to explore closer-to-home destinations.
In the last few years, the global economic landscape has remained volatile. Economic uncertainty, coupled with inflation and recession fears, has impacted discretionary spending power in many Asian countries and territories. This is further exacerbated by fluctuations in exchange rates, making European destinations comparatively more expensive for Asian travellers, directly affecting travel budgets and the willingness to spend on non-essential trips.
Beyond economic factors, flight routes between Asia and Europe are still not fully restored to pre-pandemic levels, resulting in limited availability and, consequently, higher airfares. One contributing factor is the need for airlines to reroute around the Russian airspace, which extends flight durations and increases operational costs. This higher cost of travel significantly impacts the overall affordability of a European vacation.
Despite the challenges, the Asian outbound travel market to Europe is showing signs of recovery, with several key trends shaping its future. The initial wave of recovery is being driven by younger, affluent travellers who are less constrained by economic concerns and eager to experience the world.
Furthermore, Asian travellers are increasingly using mobile apps and digital platforms to plan, book, and personalise their trips. There is a strong preference for seamless, tech-enabled experiences, including app-based bookings, real-time translation tools, and customisable itineraries. It now becomes imperative for European businesses to invest in technology to cater to these evolving expectations.
However, Europe is not a frequently repeated destination for the majority of Asian travellers, except for a small, wealthy segment. Since many have not visited Europe in several years, the focus in the near term is expected to shift toward major, well-known destinations.
Finally, while traditionally dominated by travellers from East Asia, there is observable growth from Southeast and South Asian countries like Thailand, Indonesia, the Philippines, and India. These emerging markets represent a significant growth opportunity for European destinations.
Data from JCB(1) highlights the incremental volume of face-to-face purchases by Asian cardmembers when travelling in European countries. Physical spending by Taiwanese cardmembers within Europe grew by a staggering 301% in 2023 compared to 2022, while spending by Japanese cardmembers saw a 114% increase. Indian cardmembers also exhibited remarkable growth, with physical spend within Europe rising by 641% in 2023 compared to 2022. In the same period, the physical spend of cardmembers from the Philippines within Europe also increased by 101%. It is worth noting that these impressive growth rates were also driven by a sharp rise in JCB card membership from 2022 to 2023, with increases of 273% in India, 176% in the Philippines, 110% in Taiwan, and 105% in Japan.
These trends highlight a significant opportunity for European businesses to cater to affluent Asian travellers. By offering premium products and services, personalised experiences, and convenient payment solutions, they can effectively attract this valuable customer segment.
While alternative payment methods (APMs) are gaining traction globally, card payments remain a preferred option for many Asian travellers in Europe, particularly in specific scenarios. Credit, debit, and prepaid cards are often preferred for luxury and high-ticket purchases like designer-brand shopping and fine dining due to security concerns, the ability to earn rewards points, and the ease of tracking currency conversions.
International card acceptance is standard for hotel stays, airport transfers, and advance bookings, making cards a convenient and reliable payment option for the 53% of Asian travellers who are interested in luxury amenities, according to research. Many Asian travellers use international cards to benefit from loyalty programmes and promotions offered by duty-free shops and outlet villages.
Cards facilitate VAT reclaim, especially in countries with digital refund schemes, making it easier for travellers to recoup their expenses. Card payments also offer familiar checkout processes, particularly in face-to-face environments where language or UX may be a barrier.
Card payments also have an advantage over APMs due to broader merchant acceptance, ease of use through the simple tap functionality at the point-of-sale (POS) terminal, and the added benefit of dispute resolution support in case of charge issues.
Finally, in regions where mobile wallets or other alternative payment methods are not widely accepted, cards remain the primary payment option.
Despite the widespread acceptance of cards, several payment-related challenges can hinder the Asian traveller's experience in Europe. Many payment terminals and checkout pages in Europe lack native language support or familiar user interfaces, creating hesitation and confusion at the POS.
In non-English-speaking countries, the display of only the local language on POS terminals presents a challenge, especially as transaction steps vary by market. Travellers often do not understand what actions to take during the payment process.
European businesses need to invest in multilingual payment solutions and user-friendly interfaces to cater to Asian travellers. Contactless payments are widely accepted in Europe, and Asian travellers from Japan and Taiwan are accustomed to using them.
However, the acceptance of payment methods commonly used in Asia is not always widespread in Europe. To bridge this gap, merchants should collaborate with their terminal providers, payment service providers, or acquiring banks to enable these payment options to better cater to the preferences of Asian cardmembers. Furthermore, Asian cardmembers often prefer to use their familiar payment cards as their primary method of payment. Merchants should clearly display accepted card schemes to inform customers that their preferred options are available.
(1) JCB Figures per the year ending December 31, 2023.
The Paypers’ Travel Series includes contributions on topics spanning emerging trends in travel payments, fraud and security challenges, regulatory and tax impacts, risk management and forex, as well as sustainability in the travel industry. For a complete overview of all the contributions featured, click here.
Ray Shinzawa is the Managing Director of JCB International (Europe) Ltd., JCB International’s subsidiary based in London. His primary role is to oversee JCB's business expansion, including acceptance coverage, business development, marketing, customer service, technical support, and partners across the region. Ray ensures that JCB's European strategy aligns with JCB's long-term global strategy, balancing business growth with regulatory compliance, promoting the opportunities of working with JCB, and strengthening partner relationships.
JCB is a major global payment brand and a leading credit card issuer and acquirer in Japan. JCB launched its card business in Japan in 1961 and began expanding worldwide in 1981. Its acceptance network includes about 56 million merchants around the world. JCB Cards are now issued mainly in Asian countries and territories, with more than 169 million cardmembers. As part of its international growth strategy, JCB has formed alliances with hundreds of leading banks and financial institutions globally to increase its merchant coverage and cardmember base. As a comprehensive payment solution provider, JCB commits to providing responsive and high-quality service and products to all customers worldwide. For more information, please visit: www.global.jcb/en/
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