The travel sector stands on the cusp of significant expansion. A recent Boston Consulting Group (BCG) analysis, drawing from a survey of nearly 5,000 individuals with a propensity for travel, anticipates that global leisure travel expenditures will potentially triple, moving from $5 trillion in 2024 to approximately $15 trillion by the year 2040.
The growth, eclipsing sectors such as pharmaceuticals and, yes, even fashion, is being pushed forward by emerging economies, evolving traveler profiles, and a notable cultural shift—specifically, a preference for experiences over material acquisitions.
Emerging Markets Lead the Charge
While the U.S. and Europe have traditionally been at the forefront of leisure travel, the future appears to be situated in emerging economies such as China, India, and even Saudi Arabia. A growing middle class in these areas is certainly fueling demand, and China is anticipated to become the world’s largest leisure travel spender, with growth exceeding 10% per year. According to the BCG report, a significant percentage—around 70%—of travelers from these regions integrate leisure activities into business trips, a practice observed less frequently in the U.S., indicating an increased inclination toward travel as an integral part of their lifestyle.
While domestic travel does remain a central aspect of demand, international leisure travel is witnessing an even more rapid expansion, with expenditures expected to increase significantly, from around $424 billion in 2024 to possibly $1.4 trillion by 2040 – a projected 200% surge. This movement highlights the escalating global passion for exploration that is significantly reshaping the industry.
A Diverse New Traveler
The modern leisure traveler is not a single, monolithic group; there are several distinct niches driving demand. Millennials and Gen Z, who are tech-savvy and prioritize value, stand as the principal drivers, favoring experiential journeys while exhibiting less brand allegiance. Multigenerational travel, where families with varying ages travel together, is also gaining traction, notably in countries like Vietnam, India, Mexico, and Saudi Arabia. It’s worth noting that roughly 10% of travelers in these locations are seeking trips that can accommodate diverse age groups, differing mobility requirements, and assorted interests.
Solo travel, which used to be considered a niche segment, has moved decidedly into the mainstream, with approximately 18% to 39% of travelers choosing to travel alone, with women and Gen Zers showing a particular preference. These individuals often prefer urban destinations, cultural and historical locations, as well as wellness retreats and spiritual experiences, rather than the typical beach vacation. They often seek authenticity in their experiences and opportunities to connect with like-minded people, and their preferences are reshaping destination marketing plans.
Seizing the Moment
Even when considering potential risks, like possible trade wars and geopolitical instability, which can be felt in regions like the Middle East, the travel industry displays impressive resilience. The BCG report identified a “carpe diem” attitude prevailing among consumers, leading them to book trips on relatively short notice, choosing to embrace experiences amidst existing economic uncertainties. This pronounced desire for creating meaningful memories continues to fuel demand, with a marked shift toward experiences and adventures over material possessions.
Challenges and Opportunities
The anticipated $15 trillion global leisure travel market by the year 2040 presents substantial opportunities and noteworthy challenges. Destinations, along with businesses, must respond to the varied needs of Millennials, Gen Z, multigenerational groups, and those who venture out on their own. Digital platforms, authentic cultural displays, and more inclusive experiences will be extremely important to secure a portion of this growing market. The emerging markets, powered by growing middle classes, offer a potential blueprint for the trajectory of the future, with nations like China and India at the forefront of redefining global travel behaviors.
As the travel industry continues its ongoing evolution, its inherent resilience and adaptability are expected to help shape a new age of exploration. From energetic urban centers to tranquil wellness getaways, the global desire to travel is poised to significantly impact economies and generate lasting memories for future travelers.