Travel continues to take up most of our spending budgets in Asia, with credit cardholders in Singapore being the biggest drivers of the booming trend.

“For many years now, travel and cross border spending havebeen growing much faster than average,” said Dr Simon Baptist, Principal Asia Pacific Economist at Visa.

“Travel spending grew two and a half times faster than overall spending. That category is already a big one and it’s still growing at a very fast rate. The appetite for travel and spending abroad is really unsatiated.”

Baptist was sharing the latest findings from Visa’s Asia Pacific Spending Momentum Index (SMI), which measures consumer spending based off data from card payment transactions online and offline in the past year.

Travellers in the region are also most likely booking their trips online, contributing to the ongoing rise of e-commerce.

“[Asia Pacific] is a region where e-commerce is much bigger than the global average,” he said. “55% of transactions are now done in e-commerce.” And this figure is set to continue to rise.

Baptist’s team defines e-commerce as “card not present transactions”, meaning anything from using mobile applications to online purchases through websites. “Any transaction where the card is not at the point of sale, so the [payment] authorisation is happening remotely,” he said.

Singaporeans spending ‘moderately’

Despite the boom in travel and e-commerce spending in Asia, consumers in Singapore lagged behind their neighbours in other areas.

Visa found that Singapore’s SMI fell by 2.2 points to 95.1, driven by rising domestic prices and a cooling housing market. HDB resale transactions fell sharply by 27.2% in Q4 as compared to Q3, pulling down related retail categories and dragging overall consumer spending.

On the other hand, consumers in Japan and Hong Kong were spending more across all categories, including on necessities like medical or healthcare services, food and groceries, as well as for entertainment and luxury services. Hong Kong saw the strongest momentum in consumer confidence among the three markets. 

Regardless, Singaporeans still prioritised travel. Visa found that 75% of new tourism spend in the region came from Singapore, Australia, Hong Kong, Japan, and Taiwan – especially amongst affluent travellers, or those with the more premium range of credit cards.

“If we were doing this 12 months ago, I probably would have expected travel spend to slow down a bit through 2025 […] but it kept rising,” said Baptist.

“It just looks like there’s been a step change in how much people want to travel, and they prioritise it. We do our consumer surveys and we ask, what big ticket items are you thinking about buying – like, travel, car, house, that kind of stuff, and travel is always first.

“Even in difficult times, they do cut back on other discretionary (luxury) spend to try and protect the travel budget.”

Will agentic AI takeover travel sites in Asia?

What’s more, as demand for travel continues to spike in the region, the rise of agentic AI could potentially “upend industry relationships” and transform how we spend on our favourite luxury hobby.

If agentic AI is adopted for online travel booking or retail experiences, and it leads to better user experience, Baptist thinks it may shift even more of our spending online. It could also limit the need for online travel merchants.

“The way agentic e-commerce could operate is you don’t need websites anymore because you’re not looking at them; your [AI] agent is just reading the code behind,” he said.

How soon will this happen in Asia? Despite being open to AI, maybe not so soon for those of us in Singapore.

“At the beginning we’ll see it taking off first in the more tech-savvy economies,” he said. “We see the strongest appetite for agentic e-commerce in emerging markets, so this are places like India and Vietnam. When we do consumer surveys, they’re the people that are excited about using it.

“In the more developed markets, like Japan, Australia, or Singapore, people are less excited about agentic AI. Maybe there’s a bit of tech fatigue or something, but I still expect they’re going to end up using it. Those markets have a strong track record of adopting a lot of new tech.”