Leisure travel market to triple in worth to $19 trillion by 2040, report says
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Consumers’ growing wanderlust has resulted in more people booking last-minute trips, even in the face of all the economic uncertainty.
PHOTO: BT FILE
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LONDON – You don’t need statistics to know that airports and aeroplanes are crammed far more densely than they used to be. But a report by Boston Consulting Group (BCG) spells out just how quickly the travel industry is growing.
The company’s global review of leisure travel, based on a survey of nearly 5,000 travellers, estimates annual consumer expenditure on travel will triple to US$15 trillion (S$19 trillion) in 2040 from US$5 trillion in 2024. That catapults the industry ahead of both pharmaceuticals and fashion.
That momentum isn’t coming from the United States or Europe, the report suggests.
“Emerging markets are really going to drive significant growth, countries like China, India and Saudi Arabia,” says Ms Lara Koslow, senior partner at BCG and one of the authors of the report.
Discussing the findings with Bloomberg, Ms Koslow says the growth of the middle class in these places is giving rise to consumers who are newly interested in leisure travel – just as the rise of the middle class in the US gave rise to a resort culture there many decades ago.
China is on course to become the country with the highest spending on leisure, which is predicted to increase more than 10 per cent a year.
“We all know that leisure travel is on the rise and that trend has been going on for a while,” says Ms Koslow. But she says she was surprised to find that 70 per cent of emerging market travellers add a leisure component to their work trips, a practice that’s much less common in the US.
Domestic trips within a traveller’s home country represent a majority of the demand. But international leisure travel is growing at a faster clip. BCG forecasts that it will more than triple, from US$424 billion in 2024 to US$1.4 trillion in 2040.
Of course, the travel industry is difficult to quantify. Most estimates, like those from the World Travel & Tourism Council (WTTC), include things such as restaurant expenditures or the knock-on effects of hospitality workers contributing to their local economies; in April, the WTTC estimated that the industry would reach US$11.7 trillion, or 10.3 per cent of the world’s gross domestic product, by the end of 2025.
BCG’s figures follow the same approach. Its latest study factors the evolution of travel patterns across 68 countries from 2014 to 2024; it also surveyed travellers in 11 countries whose populations either travel frequently or are likely to do so.
But BCG’s research didn’t take into account the current risks of trade wars or geopolitical conflicts that could scuttle travel across large regions such as the Middle East. Ms Koslow says those situations are “very unclear” at the moment.
However, the travel industry has been resilient, says Ms Koslow – an assessment that tracks with WTTC’s outlook. And consumers’ growing wanderlust has resulted in more people booking last-minute trips, even in the face of all the economic uncertainty.
“People have this desire to indulge more in experiences and not miss out – carpe diem (‘seize the day’ in Latin),” she says. “We’re seeing more people take that moment if they have it and really lean into it.” BLOOMBERG
