The Leisure Travel Market: A Whopping $15 Trillion by 2040? Here's the Breakdown
Expanding global tourism sector may reach a whopping $15 trillion by the year 2040.
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Prepare for a significant shift in the global economy as the leisure travel industry is set to explode, potentially reaching a staggering $15 trillion market value by 2040. According to a recent study by the Boston Consulting Group (BCG), the travel and vacation sector could triple in size, surpassing its current $5 trillion worth.
The research, released by BCG on Wednesday, surveyed 400-500 travelers in eleven countries, revealing some fascinating insights. Germany maintains its position as a travel-obsessed nation, with the local travel industry—including travel agencies, airports, and airlines—remaining a vital component of the international travel scene. The future growth of the industry will be led by emerging economies, with China, India, and Saudi Arabia taking center stage.
Travel is poised for major transformations caused by new traveler demographics, innovative booking channels, and changing travel patterns. Millennials (1980-1995) and Generation Z (1995-2010) now dominante traveler behavior, driving a shift towards unique, personalized, and shared experiences, including solo trips, "workations," and "bleisure" trips—combining business and leisure. In fact, over 70% of respondents in many emerging markets plan to extend their business trips for private stays, while Germany currently stands at around 30%.
The way travel is booked and planned is also evolving. Social media significantly impacts the travel habits of the younger demographic, while artificially intelligent assistants are rising in importance over traditional online search engines and stationary travel agencies. Christina Mühlenbein, an expert in travel and tourism for BCG, emphasized the need for a strong digital presence, modular offers, and hyper-personalized services to stay competitive in the market. Traditional players must be open to change and adapt quickly to avoid being overtaken by digitally-driven competitors.
The BCG analysis revealed some key growth drivers behind this projected market surge. The increasing middle class in emerging markets, such as China, India, and Saudi Arabia, is fueling the demand for travel experiences, often focusing on domestic and regional destinations over international ones. Additionally, consumers worldwide are prioritizing spending on experiences over material possessions, further supporting the demand for leisure travel.
Reference: ntv.de
Insights from the Enrichment Data:
- The majority of the $15 trillion market value is expected to come from domestic and regional travel, with nearly $14 trillion by 2040 compared to international travel's approximately $1.4 trillion.
- Travelers from emerging markets like China, India, Saudi Arabia, and countries such as Vietnam, Bulgaria, and Cambodia are key drivers of growth, as their expanding middle class fuels increased travel demand.
- There is a significant cultural shift towards valuing memorable travel experiences which supports ongoing demand for leisure travel.
- The traveler demographic is evolving, with more young consumers—especially Millennials and Generation Z—entering the market. These cohorts expect personalized, culturally relevant, and technology-enhanced travel experiences.
- The use of digital technologies, AI integration, and platforms that cater to the digital habits and expectations of young travelers will play a crucial role in shaping the future of the leisure travel industry.
The Commission has also been involved in the preparation of the report, delving into the impact of finance on the future of the leisure travel industry. As young travelers, especially Millennials and Generation Z, become more prominent, they are expected to favor business models that offer finance-friendly activities, such as affordable "workations," and "bleisure" trips, blending business and leisure. In addition, the increasing use of digital technologies, including artificially intelligent assistants, in travel booking and planning, will likely reshape the landscape of the leisure travel market.
