New Frontier Markets - The Forefront of Tourism Recovery

Delivery

This report comes in PPT.

Key Findings

New potential

As a group, the new frontier markets are rebounding faster from the pandemic, already regaining 64% of their 2019 levels, offering big potential for incremental value growth as consumers are looking for new, lesser well trodden destinations to explore. Offering a wide range of destinations from iconic to tertiary is a sure fire way to avoid over-tourism.

Re-opening borders

New frontier markets rely heavily on inbound tourism. This reliance meant that the new frontier markets were particularly badly hit in 2020. With borders re-opening and travellers’ desire for international trips high, the new frontier markets are now set to see strong inbound growth over the next five years.

Short-term rentals expand

Whereas the lodging market has been labelled as saturated in many large travel markets, lodging has significant growth potential in new frontier markets. Short-term rentals are a potential challenge to hotels’ recovery, as their growing popularity has cut into hotels’ market share in some new frontier markets.

Air dependency

The majority of new frontier markets are highly dependent on air, being island nations, which is a challenge for decarbonisation and meeting the 1.5C pathway. Destinations will need to apply pressure on airlines to ensure that the transition to net-zero happens well before the industry’s self-regulated CORSIA targets.

Future leaders

New frontier markets are more often than not on the front line of the climate emergency, facing existential threats from climate change. Emulating the regenerative model as seen in New Zealand, there is huge opportunity to accelerate ambitions to achieve net-zero emissions before 2050, creating a tourism model that gives back more than it extracts.