Leisure Travel Market Projected to Reach $15 Trillion by 2040, Fueled by Domestic and Emerging Market Growth
A recent report by Boston Consulting Group (BCG) forecasts a significant expansion in the leisure travel industry, projecting its growth from $5 trillion to $15 trillion by 2040. This growth is primarily driven by an increase in domestic travel and emerging markets.
Domestic and Regional Travel: The Growth Engines The report highlights that domestic leisure travel will be the primary contributor to the industry’s growth, expected to generate nearly $12 trillion by 2040. Regional travel is also set to experience substantial growth, tripling to more than $2 trillion. Although international travel is predicted to grow the fastest, it will still account for the smallest share, reaching $1.4 trillion.
Emerging Markets Leading the Way Emerging markets such as China, India, Saudi Arabia, and Vietnam are becoming increasingly significant in the global tourism landscape, surpassing traditional tourism leaders like the US, UK, and Germany. The surge in travelers from these countries is reshaping the future demographics and dynamics of the travel industry.
Changing Traveler Demographics and Preferences The BCG report, based on a survey of nearly 5,000 travelers across 11 countries and an analysis of travel patterns in 68 markets, reveals a shift in traveler demographics and preferences. Millennials and Gen-Zers are now the most influential groups in the travel sector, planning more trips and spending more than older generations. These younger travelers are not only tech-savvy but also value cultural experiences and personal fulfillment over traditional vacation types.
Solo travel has transitioned from a niche to a mainstream choice, with a significant percentage of travelers opting for solo trips to seek cultural, spiritual, or wellness experiences. Additionally, the concept of “bleisure” travel, which combines business with leisure, is gaining popularity, especially in countries like China, India, Nigeria, and Saudi Arabia.
Travel Motivations and AI Integration Relaxation and quality time with loved ones remain primary motivators for travel. However, there is a noticeable shift towards vacations that offer cultural exploration, health and wellness retreats, and spiritual journeys. Food tourism is also emerging as a significant trend, particularly among travelers from China, Vietnam, and Indonesia.
The use of AI in planning and booking travel is on the rise, especially in emerging markets. Many travelers in China, India, Indonesia, and Vietnam report using AI-powered tools for travel arrangements. Despite the growing reliance on technology, the demand for human interaction in travel planning remains high.
Implications for Travel Companies The evolving landscape of the travel industry presents opportunities and challenges for travel companies. To remain relevant, companies must adapt to the changing demographics, technological advancements, and shifting traveler expectations. Embracing these changes will be crucial for businesses aiming to thrive in the expanding leisure travel market.
The leisure travel industry is on a trajectory of robust growth, driven by domestic travel and the rise of emerging markets. As the sector evolves, understanding and adapting to the new trends and traveler preferences will be essential for stakeholders looking to capitalize on the $15 trillion opportunity.
Access the Unpacking the $15 Trillion Opportunity in Leisure Travel survey findings.
