Originally seen HERE.
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 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 that annual consumer expenditure on travel will triple, from US$5 trillion (RM21.08 trillion) in 2024 to US$15 trillion in 2040. That catapults the industry ahead of both pharmaceuticals and fashion.
That momentum isn’t coming from the US or Europe, the report suggests.
“Emerging markets are really going to drive significant growth — countries like China, India and Saudi Arabia,” says Lara Koslow, senior partner at BCG and one of the authors of the report. Discussing the findings with Bloomberg, Koslow says the growth of the middle class in these places is giving rise to consumers that 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% a year.
“We all know that leisure travel is on the rise and that trend has been going on for a while,” says Koslow. But she says she was surprised to find that 70% 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, that organisation estimated that the industry would reach US$11.7 trillion or 10.3% of the world’s gross domestic product by the end of this year. BCG’s figures follow the same approach. (This report’s data 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.)
Notably, 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. Koslow says those situations are “very unclear” at the moment.
However, the travel industry has been resilient, says Koslow — an assessment that tracks with WTTC’s outlook. And consumers’ growing wanderlust has resulted in more people booking more 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,” she says. “We’re seeing more people take that moment if they have it and really lean into it.”
