Expect Tripled Value in Leisure Travel by 2040 Driven by Domestic Demand

Projected Growth in the Leisure Travel Market

The global leisure travel market is on an exciting trajectory, projected to reach a whopping USD 15 trillion by 2040. This remarkable increase is fueled primarily by domestic tourism, which alone is expected to contribute approximately USD 12 trillion. The travel landscape is evolving, with emerging economies like India and Vietnam stepping into the spotlight and expected to lead the charge in outbound spending.

Drivers of Change

According to a recent report by Boston Consulting Group, the leisure travel sector is set to expand significantly from its current value of USD 5 trillion. Domestic tourism will play a pivotal role in this growth, alongside regional and international travel, which are estimated to contribute around USD 2.1 trillion and USD 1.4 trillion, respectively.

Focus on Emerging Markets

Particularly noteworthy is India’s rapid growth within the leisure travel segment. This market has seen domestic travel expenditure increase at an impressive annual rate of 12% while international travel grows at 10%. The report, aptly named “Unpacking the USD 15 Trillion Opportunity in Leisure Travel,” derives its insights from a substantial survey of nearly 5,000 travelers across 11 countries.

Changing Traveler Preferences

Millennials and Gen Z in India are emerging as key contributors to this paradigm shift, with 22% of them indicating a stronger intention to travel more in the coming year. Their preferences lean towards personalized, purpose-driven experiences. Nature, urban landscapes, beaches, and cultural explorations remain popular among Indian travelers, with spiritual journeys reflecting significantly higher interest in India (10%) compared to the global average (3%).

Travel Trends and Insights

The survey reveals that many Indian travelers prefer to embark on trips with their spouses (28%) or family (23%), while solo travel remains relatively low at 9%. An impressive 81% of Indian travelers reported combining business with leisure in what are known as “bleisure” trips, further showcasing the evolving purpose of travel.

The Digitization of Travel Planning

Technology is reshaping how travelers plan their journeys, with 59% of Indian respondents utilizing AI for travel research or planning. Surprisingly, while digital tools are becoming more prevalent, a substantial 80% still look to trusted friends and family for travel advice, underscoring the importance of the human touch in travel planning.

“India is poised to become one of the most dynamic leisure travel markets globally,” notes Nitima Malhotra from BCG. With rapid growth in both domestic and international travel, Indian travelers are increasingly eager to explore both their home country and beyond, blending value, personalization, and meaning in their travel experiences.

Adapting to Changing Expectations

As leisure travel continues its transformation, it is essential for destinations and travel service providers to adapt to these changing expectations, especially in emerging markets like India. This adaptability could capture future growth opportunities by aligning offerings with the desires of modern travelers.

Conclusion: Embracing the Future of Travel

The growth in leisure travel, particularly driven by domestic tourism, presents both challenges and opportunities. Companies and destinations must stay ahead by offering tailored, meaningful experiences to ensure they resonate with the evolving preferences of travelers.

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