Travel is poised to reach record highs in 2024.
Global tourism spending is expected to hit USD2 trillion, exceeding its peak fuelled by leisure demand
Source: Euromonitor International
However, the sector will be shaped by a complex interplay of converging factors, including rising demand from emerging markets, weak economic growth, geopolitical instability, and escalating sustainability challenges.
Insatiable rise of experience seekers
Travel and tourism continue to outperform the global economy, the latter set for sluggish growth of 2.7%, showing the importance bestowed upon travel by consumers despite the persistent cost-of-living crisis. Yet growth is forecast to slow to 16% in 2024, as the heady days of “revenge travel” fade and rising prices gradually eat into consumer appetite for taking a trip.
In Euromonitor’s Voice of the Industry Travel Survey, travel business executives cited inflation (56%) and travel disruptions (53%) along with consumers’ desire for value for money (46%) as the biggest trends impacting the sector. 59% expect a slight improvement on financial performance over 2023-2024 as rising costs are being passed on to consumers.
The return of business travel is more complex as employees embrace blended travel for a stronger work/life balance. Blended travel is expected to reach USD300 billion in 2024. Businesses are also pushed on by their investors to deliver on their carbon emissions targets by cutting non-essential business travel, where first and business class air travel are four times more harmful than economy class, according to the Aviation Environment Federation.
Rail leads the transition to climate-friendly travel – but still a long way to go
In 2024, the fastest growing travel category worldwide is rail transport at 35.6% over 2023-2024
Source: Euromonitor International
This speaks to the growing climate consciousness of travellers and travel operators, offering more climate-friendly transportation options in their product portfolio.
One third (33%) of Eco-Adventurers in 2023 prefer alternatives to air travel such as rail for their trips, according to Euromonitor’s Voice of the Consumer: Travel Survey.
However, as the recent Tourism Panel on Climate Change reported, tourism is falling far short of its targets and “a paradigm shift” is required to scale up the necessary action to meet tourism’s climate emissions goals in line with the 1.5C pathway and meet net zero targets by 2050.
Duty-free shopping and museums and cultural sites are expected to be the second and third highest growth categories, with 24.9% and 17.9%, respectively, with Luxury Seekers among the most frequent fliers rediscovering the joys of airport shopping, whilst the return of Cultural Explorers in France and Italy are rediscovering places closer to home. 28% of Luxury Seekers even pick their holiday destinations based on the quality of shopping available there in 2023, as reported in Euromonitor’s Voice of the Consumer: Travel Survey.
Power of personalisation – travel brands tap into consumers’ passions
Niche tourism segments such as wellness, luxury, eco-tourism, sports and adventure are expected to be major growth areas in the year ahead, as consumers increasingly prioritise personalised experiences aligned with their lifestyles and values, driving a willingness to pay more for what matters most to them.
Sales of sports tourism packages sold through travel intermediaries forecast to grow by 15% over 2023-2024, benefiting from mega events such as the Paris Olympics and UEFA EURO 2024 in Germany, whilst eco-tourism will be the second highest growth category, at 14.8%
Source: Euromonitor International
Finding and experiencing the perfect trip is ever more achievable, thanks to personalisation delivered through digitalisation, including recent leaps forward with generative AI in travel planning. Yet the jury is still out on the accuracy of such AI tools.
Travel brands and destinations are also developing innovative products aligned with consumers’ needs whilst leveraging consumer segmentation, traditional marketing and social media for engagement. This consumer-centric mindset is helping to drive quality tourism over quantity to ensure sustainable and resilient growth.
Changing face of the traveller: Younger, diverse and empowered
What is also striking about the post-pandemic traveller is that they are getting younger, where millennials (aged 30-44) make up the largest share of Wellness Worshippers, Leisure Seekers, Luxury Seekers and Digital Travellers, according to Euromonitor’s Voice of the Consumer: Travel Survey.
Luxury Seekers see the highest representation in Middle Eastern and Asia Pacific countries, and Eco-Adventurers in Asia Pacific and Europe, whilst Cultural Explorers are most prevalent in Europe.
Travel is highly digitalised, with 67% of consumers expected to book online in 2024 – and even more so for 76% of Wellness Worshippers and 75% of Digital Travellers in 2023
Source: Euromonitor International
Travel brands and destinations would be wise to ensure that diversity and inclusion are central to their brand values and products/services to welcome the traveller of tomorrow in a high-tech, high-touch way that respects their beliefs and values.
Learn more about travel trends in our report, Top 100 City Destinations Index, to understand how cities are acting on opportunities and mitigating risks.