Toward the Horizon: A Leisure Travel Forecast

Global leisure travel spending is projected to reach $9,332 billion by the end of 2029, an almost 50% increase from 2023. Today's consumers feel confident in the value of travel — and are willing to make it a priority. But the vacations they're craving are changing.

A growing appetite for unique, immersive experiences is driving a surge in demand for experiential travel. Tourists are ready to take some risks and engage fully with the culture and cuisine of their destination. At the same time, travelers are increasingly preoccupied with sustainability — a competing concern that travel companies must balance.

In addition, disruptive technologies such as generative artificial intelligence (AI) are adapting how customers plan and book their trips. From novel experiences to new destinations, here's how leisure travel will evolve in the coming years.

Sun and Sea Still Beckon

When choosing their destination, sun and sea leisure packages will remain the top choice for global travelers over the next four years. Based on Escalent's analysis, spending in this segment is projected to rise from approximately $107 billion in 2024 to $233 billion in 2028.

Culture and heritage trips are expected to flourish, with the spending forecast projected to more than double in the segment by 2028. Consumers are seeking destinations rich in history and culture, with regions like the Middle East attracting a growing volume of tourists. Adventure tourism is close behind, with spending slated to more than double from approximately $45 billion in 2024 to $103 billion in 2028.

As consumers move to align their travel plans with their lifestyles and values, wellness and eco-tourism are also emerging as niche segments. Wellness travel is expected to generate more than $70 billion in annual revenue by 2028. Meanwhile, eco-tourism is projected to rise from approximately $15 billion in 2024 to $34 billion in 2028.

New Experiences, New Priorities

Emerging travel categories broadly mirror these themes. Rail travel is projected to grow 35.6% year-over-year between 2023 and 2024. Sustainability has become an urgent concern for travelers, and many are looking for ways to reduce their carbon footprint while continuing to enjoy the benefits of tourism. In response, companies are adjusting their approach to meet traveler expectations, with 46% saying they anticipate increasing their environmental, social, and governance (ESG) investment in 2024.

Elsewhere, travelers are seeking curated experiences based on their interests and priorities. Luxury travelers are selecting locations based on the quality of shopping, with duty-free shopping trips projected to grow 24.9% between 2023 and 2024. Food enthusiasts are looking for new opportunities to satiate their palates, including traditional offerings, culinary tours, and farm-to-table dining, with food and dining travel slated to increase 15.7% year-over-year in 2024.

Festivals and leisure events are also gaining traction as tourism drivers. Between 2023 and 2024, this travel category is forecast to grow by 16%. This trend was particularly notable this past year when headlines were dominated by the enormous economic impact of events like Taylor Swift's Eras Tour and Beyoncé's Renaissance World Tour. Travelers are using these occasions as anchors for longer trips, taking several days to explore the area and spending money on food, lodging, and experiences as they go.

A Shifting Population

The primary sources of outbound travelers are expected to remain largely unchanged over the next decade, with China and the U.S. retaining their positions as the top source markets globally. However, China's growth is slated to far outpace that of the U.S., with a 131% increase in spending between 2024 and 2033, according to Escalent's analysis. U.S. spending, in contrast, will rise 35% over the same period. European markets like Germany and the UK are also projected to remain prominent, driven by the demand for intra-regional travel.

One factor likely to impact tourism is the aging population. As more people age into the 65+ bracket, the demographic shift is poised to create an influx of retirement travelers, particularly in countries such as Japan and China, where the population is aging rapidly.

This trend is echoed in the way families are using vacation time, too. Travelers are increasingly opting to include grandparents and other extended family members in their trips — likely to compensate for the lost time during the pandemic. In fact, 55% of parents say they will take a multigenerational vacation in the coming year.

Off the Beaten Path

Where will the next decade take leisure travelers? All over. Intra-regional travel trends within the U.S. and demand for popular locations in the Caribbean and Central America will fuel solid growth in the Americas, with the U.S., Canada, and Mexico remaining the favored locations, according to Escalent's analysis. In Europe, Spain, Italy, and France will top the market, with Spain projected to generate the most tourism revenue between 2024 and 2033.

The Asia-Pacific (APAC) region has perhaps been the slowest to recover from the pandemic. However, new measures to promote tourism and a strong interest in locations such as India, Japan, and Thailand are bringing travelers back to the region. The Chinese travel market is projected to grow by 158% between 2024 and 2033. Thailand's market — just behind in size — will increase 178% over the same period.

The Middle East and Africa (MEA) region is enjoying an impressive post-pandemic recovery. After Qatar hosted the 2022 World Cup, the Gulf countries are vying to attract more large-scale events, which are likely to draw a high volume of travelers. Meanwhile, countries like Morocco and South Africa remain sought-after tourist hubs, with travel spending in South Africa projected to grow 143% by 2033.

"Destination dupes" — affordable alternatives to bucket-list destinations — are attracting budget-conscious travelers. One example is Curaçao, which has gained popularity through social media as an alternative to more expensive Caribbean islands like Saint Martin.

In several territories, new visa policies are spurring growth, too. In Europe, the addition of countries such as Croatia, Romania, and Bulgaria to the Schengen zone is expected to boost continental travel. Similarly, the introduction of a unified visa for Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates will promote travel to and within the six Gulf Cooperation Council (GCC) countries.

An Accessible Luxury

Several factors will contribute to the global growth in travel in the coming years. Whether local, regional, or international, travel has become more accessible, and awareness of destinations is rising thanks to the increasing reliance on digital tools, from online booking agents to social media. In 2024, 84% of consumers said they were prioritizing travel in their budgets.

The number of Chinese outbound travelers is forecasted to reach pre-pandemic levels again for the first time in 2024. With substantial disposable income, an appetite for far-flung locations, and a penchant for traveling in large groups, Chinese travelers are expected to have an outsize impact on the industry — particularly as their volume grows in the decade ahead.

The emergence of new outbound tourism markets, including Saudi Arabia, Qatar, Myanmar, and Estonia, is expected to inspire a generation of travelers seeking off-beat locations — often inspired by content seen on online channels like YouTube and Instagram. Lastly, interest in niche experiences such as sports travel and ecotourism is rising, with package sales for the two categories projected to increase by 15% between 2023 and 2024.

Making Travel a Priority

Despite the boom on the horizon, the travel and tourism industry still has headwinds to overcome. Costs are rising globally, with an anticipated 7% year-over-year increase in hotel rates in 2024. High air travel and lodging prices could push travelers to find workarounds by avoiding busy periods or seeking alternative travel destinations.

The labor market continues to be tight, with more than half of travel executives citing the shortage of skilled workers as a major operational hurdle. Tourists are worried about climate change, with 51% saying it could affect their travel. In addition, geopolitical instability is making it harder for consumers to plan future trips — a pattern that could hurt burgeoning markets like Egypt and Poland.

That said, tourists have made it clear that leisure travel is a priority. Consumers are optimistic about travel, and 40% anticipate traveling more in 2024. In the next year, travelers will take an average of 2.7 trips, versus 2.3 in 2023.

The Values-Driven Traveler

The next decade will be marked by a growing reliance on technology in the industry. Already, travelers depend on digital tools to plan and book their vacations, and 80% of consumers now prefer to book their entire trip online. As generative AI becomes more prominent, it is expected to play a significant role in the industry. Experts predict it could represent a $28 billion dollar opportunity, thanks to applications in operations, customer support, trip personalization, and advertising.

Tomorrow's tourists will be driven by a desire for unique and authentic experiences that reflect their values. In response, brands are shifting towards a consumer-centric model focused on personalized offerings tailored to the individual. As travelers increasingly turn to trusted online sources to find vacations that satisfy their appetite for meaningful and memorable experiences, emerging brands and destinations have a prime opportunity to carve out their niche in the evolving landscape.