Despite the pandemic, despite inflation, despite economic uncertainty, political tensions and social unrest, the industry is bullish on leisure travel. And that’s a very good thing for all of us who love to travel or make a living based on tourism.
This is What’s Going On
The Global Leisure Travel Market Size was valued at USD 4,405.5 Billion in 2021 and is forecasted to reach USD 6,347.8 Billion by 2027. The market is anticipated to grow with a CAGR of 5.7% during the forecast period 2022-2027.
Leisure travel trips are planned for the purpose of entertainment, relaxation, and holiday. The travel industry aims at providing an enjoyable experience to all its customers. The leisure travel market operates in a competitive business environment as there are rapid developments and changes in the travelling modes.
Major factors driving the growth in the global leisure travel market are changes in the spending pattern of consumers, increase in diversity and global connectivity.
Rising disposable income of people around the world leads to a changing preference and developing opportunities which are fueling the leisure travel market growth. In the U.S., more than 35% of travelers are willing to pay more for a better experience and this high spending on-leisure travel is expected to boost the market growth. Furthermore, the diversified populations across the globe are significantly making more curiosity in people to explore different parts of world to learn more about different cultural diversities and ethnicities.
Moreover, due to increasing digitalization and penetration of internet, people are now aware of all the places across the globe. The growing aviation industry has a major role in improving travel by connecting all locations of the world, this factor has boosted the global connectivity and hence positively impacting the leisure travel market growth.
Restraint and Challenges Ahead
The different dimensions of political instability or political turbulence such as civil unrest, terrorism, riots and strikes have inevitably led to a decline in the number domestic and international tourists in some parts of the world. However, the global tourism industry is witnessing a period of continuous growth and unprecedented transformation.
With the continuous growth and demand in the tourism industry, travelers are ready to pay higher prices in order to get travel experiences based on their behavior, expectations and preferences. Hence, leading brands are no longer marketing to segments, but customizing the entire experience to the individual.
Furthermore, lack of skilled workforce at mid and upper level of management, insufficient skills to train and develop staff, recruitment and retention difficulties have hindered the market growth of global leisure travel industry. The growth in the leisure travel industry is dynamic, however, its impact can be seen in the environment in terms of pollution, global warming, congestion, and noise pollution as transportation is the key factor of this sector.
Impact of COVID-19 on Global Leisure Travel Market
COVID-19 has tremendously resulted in a massive and sudden transformation, owing to lockdowns in most of the countries across the world. The strict lockdown and closing of borders imposed by the government authorities all around the world have directly affected the travel industry by creating disruptions in demand and supply chain of the leisure travel industry. The companies in leisure travel market have experienced huge losses. However, the market for leisure travel is expected to grow with easing travel restrictions, industries restarting their manufacturing units and engaging travelers with virtual reality.
Solo Travel is Growing
Based on traveler type the segment is bifurcated into solo and group types. Solo segment is anticipated to dominate the global leisure travel market due to various factors such as social media influence, different preferences and interests, psychographic traits. Moreover, there are significant increases in the number of travelers who wants to travel solo in order to explore new experiences and cultures and thus it presents a promising business opportunity in the leisure travel industry. On the other hand, group travelers constitute a major share in the global leisure travel industry in 2021.
Asia-Pacific Will Dominate Again
During the forecast period 2022-2027, the Asia-Pacific region holds the major share in 2021due to increasing awareness in leisure travel, rise in wellness trend, rapid development of global outbound tourism and government support to boost tourism industry. Some of the emerging economies such as India, Malaysia and Singapore have increased investment and development in promoting tourism across the globe. Moreover, increase in disposable income and growing number of travelers are the main reasons for the growth of Leisure Travel Market in the APAC region.
