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INTRA-REGIONAL travel in South-east Asia is fast taking off.

Among the high rollers are Singapore consumers who are spending big in Malaysia, Thailand and Indonesia, and their expenditure within Asean has grown twice as fast as that beyond the region.

Singapore consumers’ overseas spending within the region grew 23 per cent year on year, outpacing spending growth of 11 per cent beyond Asean, UOB cards data showed.

With the rebound of overall passenger traffic in the region, more consumers are booking shorter trips and looking for quick overseas escapes with the best value, said the bank’s head of group personal financial services Jacquelyn Tan.

An overall uptick in business travel and meetings, incentives, conventions and exhibitions across the region also contributed to greater intra-regional travel.

Another motivator could be the proliferation of experiential and entertainment-related offerings across South-east Asia, said UOB, as consumers start to spend more on experiences such as holidays, entertainment and gastronomic events over material items.

The Singapore dollar’s relative bouts of strength this year might have been a push factor as well, noted the lender.

The ringgit traded at a low of 3.568 against the Singdollar in February as it tanked to a 26-year-low, before moderating to about 3.3 per its Singapore peer as at start-December.

The baht also hit at least a decade low of more than 27 baht per Singdollar in April before stabilising to around 25.6 this month.

The rupiah weakened to a multi-year low of about 12,250 per Singdollar in August and has strengthened to about 11,830 in December.

Heavy on accommodation and shopping

UOB noted that its local customers spend more on accommodation and shopping compared to other Mastercard credit card holders in Singapore, citing data from the multinational payment card services corporation.

While it’s clear that lodging is typically a higher-spending category, stronger purchasing power among Singapore consumers likely translates into a higher propensity to prioritise comfort during travels, said Tan.

“Higher spending on accommodation (points) towards a preference to stay in more upscale and luxury hotels while overseas,” she explained.

On shopping, Singapore consumers are also spending more compared to regional peers – especially for apparels and in department stores, said the bank.

“This could be attributed to the robust demand for luxury goods while overseas, supported by the strong Singdollar along with potential tax incentives,” remarked Tan.

Proclivity to multi-currency offerings

Another notable trend UOB observed was the significantly higher use of multi-currency cards among its Singapore consumers compared to the South-east Asian region.

This is likely driven by the benefits offered, such as lower foreign currency transaction fees or more attractive conversion rates, said Tan.

“Such features give consumers unparalleled convenience and control, enabling smart financial management as they can easily track and lock in favourable rates by converting currencies in advance,” she continued.

Local consumers may have a tendency to monitor currency rates against the Singdollar to make the most out of their conversions, added Tan.

To capture South-east Asia’s growing affluence and meet consumers’ evolving lifestyle needs, the bank – which currently serves more than eight million regional customers in Asean – has upgraded its card offerings, she said.

Tan noted that holders of UOB’s PRVI Miles credit card will be rewarded with three miles for every S$1 spent overseas in Malaysia, Thailand, Indonesia and Vietnam. The upgraded offerings come with complimentary airport lounge access and duty-free deals in Singapore and Thailand.

Credit and debit cards continued to be Asean consumers’ top payment preference for overseas spending, with more than one in two in the region opting for it, based on this year’s edition of the bank’s Asean Consumer Sentiment Study launched in August.

Travel spend stabilises

While travel-related spending has been growing, signs of moderation are emerging, said Tan, attributing this to the dissipation of pent-up demand for tourism.

Compared with 2019’s numbers, UOB’s travel-related billings were higher by 1 per cent in 2022, by 92 per cent in 2023 and by an estimated 126 per cent in 2024.

The numbers are healthy compared with pre-pandemic figures, but growth is slowing.

Year-on-year growth has been dwindling from 242 per cent in 2022 to 91 per cent in 2023 to a forecast of 17 per cent in 2024.

Said Tan: “We foresee that travel-related spending is likely to stabilise in the years ahead, but with Asean consumers spending more overseas compared to pre-Covid times.”