The state of tourism and hospitality 2024

May 2024

Tourism and hospitality are set to soar, powered by new

travelers, destinations, and trends.

Tourism and hospitality are on a journey of disruption. Shifting

source markets and destinations, growing demand for experiential
and luxury travel, and innovative business strategies are all
combining to dramatically alter the industry landscape. Given this
momentous change, it’s important for stakeholders to consider and
strategize on four major themes:

- The bulk of travel is close to home. Although international travel

might draw headlines, stakeholders shouldn’t neglect the big
opportunities in their backyards. Domestic travel still represents the
bulk of travel spending, and intra-regional tourism is on the rise.

- Consumers increasingly prioritize travel—when it’s on their own

terms. Interest in travel is booming, but travelers are no longer
content with a one-size-fits-all experience. Individual personalization
might not always be practical, but savvy industry players can use
segmentation and hypothesis-driven testing to improve their value
propositions. Those that fail to articulate target customer segments
and adapt their offerings accordingly risk getting left behind.

- The face of luxury travel is changing. Demand for luxury tourism

and hospitality is expected to grow faster than any other travel
segment today—particularly in Asia. It’s crucial to understand that
luxury travelers don’t make up a monolith. Segmenting by age,
nationality, and net worth can reveal varied and evolving
preferences and behaviors.
- As tourism grows, destinations will need to prepare to mitigate
overcrowding. Destinations need to be ready to handle the large
tourist flows of tomorrow. Now is the time for stakeholders to plan,
develop, and invest in mitigation strategies.Equipped with accurate
assessments of carrying capacities and enhanced abilities to gather
and analyze data, destinations can improve their transportation and
infrastructure, build tourism-ready workforces, and preserve their
natural and cultural heritages.

Chapter 1: Faces, places, and trends shaping tourism in 2024

Global travel is back and buzzing. More regional trips, newly

emerging travelers, and a fresh set of destinations are powering
steady spending. After falling by 75 percent in 2020, travel is on its
way to a full recovery by the end of 2024. Domestic travel is
expected to grow 3 percent annually and reach 19 billion lodging
nights per year by 2030. Over the same time frame, international
travel should likewise ramp up to its historical average of nine billion
nights. Spending on travel is expected to follow a similar trajectory,
with an estimated $8.6 trillion in traveler outlays in 2024,
representing roughly 9 percent of this year’s global GDP.

There’s no doubt people still love to travel and will continue to seek
new experiences in new places. But where will travelers come from,
and where will they go? We developed a snapshot of current traveler
flows, along with estimates for growth through 2030. For the
purposes of this report, we have divided the world into four regions
—the Americas, Asia, Europe, and the Middle East and Africa. Our
analysis identifies three major themes for industry stakeholders to
consider:

- The bulk of travel spending is close to home. Stakeholders should

ensure they capture the full potential of domestic travel before
shifting their focus to international travelers. And they should start
with international travelers who visit nearby countries—as intra-
regional trips represent the largest travel segment after domestic
trips.

- Source markets are shifting. Although established source markets

continue to anchor global travel, Eastern Europe, India, and
Southeast Asia are all becoming fast-growing sources of outbound
tourism.

- The destinations of the future may not be the ones you imagine.
Alongside enduring favorites, places that weren’t on many tourists’
maps are finding clever ways to lure international travelers and
establish themselves as desirable destinations.

As tourism stakeholders look to the future, they can take steps

to ensure that they continue to delight existing travelers while also
embracing new ones. Domestic and intra-regional tourism remain
major opportunities—catering to local tourists’ preferences while
building infrastructure that makes travel more seamless within a
region could help capture them. Creative collaboration among
tourism stakeholders can help put lesser-known destinations on the
map. Travel tides are shifting. Expertly navigating these currents
could yield rich rewards

Chapter 2: The way we travel now

Travel has become a top priority, especially for younger

generations. Sixty-six percent of the travelers we surveyed say
they’re more interested in travel now than they were before the
COVID-19 pandemic. This pattern holds across all surveyed age
groups and nationalities. Respondents also indicate that they’re
planning more trips in 2024 than they did in 2023. Travel isn’t
merely an interest these days. It’s become a priority—even amid
uncertain economic conditions that can make budgeting a
challenge. Travel continues to be one of the fastestgrowing
consumer spending areas, rising 6 percent over a recent 12-month
period in the United States, even when adjusted for inflation. Only
15 percent of our survey respondents say they’re trying to save
money by reducing the number of trips they go on. And in the
February 2024 McKinsey ConsumerWise Global Sentiment Survey of
more than 4,000 participants, 33 percent of consumers said they
planned to splurge on travel, ranking it the third-most-popular
splurge category—trailing only eating at home and eating out at
restaurants. Younger generations appear to propel much of the
rising interest in travel. In 2023, millennials and Gen Zers took, on
average, nearly five trips, versus less than four for Gen Xers and
baby boomers. Millennials and Gen Zers also say they devote, on
average, 29 percent of their incomes to travel, compared with 26
percent for Gen Zers and 25 percent for baby boomers.

Chapter 5: Trend shaping new business models in tourism

Tourism and hospitality companies have transformed over the

past decade. Here’s a look at trends related to accommodations and
experiences.

As destinations and source markets have changed, tourism and

hospitality companies have evolved too. Key trends have shaped
business models in this sector over the past decade. In the
experiences space, reinvention is the name of the game. Cruises
and theme parks have both focused on attracting new demographics
while fine-tuning their revenue management strategies. Experiences
remains a highly fragmented, legacy sector, creating massive
opportunity for those able to crack the code on aggregation. By
considering the trends, tourism and hospitality companies can gain
insights on business practices for today—and on areas of future
opportunity.

Experience providers: Cruises may only account for 2 percent of the

overall travel and tourism market, but they have achieved 6 percent
yearly revenue growth in the past decade. Attracting new travelers
and providing new experiences have been key growth strategies.
Luxury hotels are capturing the new-to-cruising segment with the
launch of yacht brands, purposefully positioned as a distinct
experience from traditional cruises. Meanwhile, millennials are
challenging stereotypes about cruising: of all cruise passengers,
they are the demographic most likely to say they plan to cruise
again (88 percent).

(https://www.mckinsey.com)

Summary

The article discusses the tourism and hotel situation in 2024 based
on factors such as type, growth, location, target audience, and
activity trends. In particular, tourism has changed, with increasing
demand for experiential and luxury tourism. Tourism stakeholders
have creative strategies combined with people's travel trends to
help increase domestic and regional tourism. Tourism has returned
and is vibrant with stable indicators. The article also said that people
like to travel to places close to home or new places. Tourism
stakeholders will also bring lesser-known places to people with the
hope of receiving great results. The article also highlights the travel
preferences of young people, which helps increase tourism. And
finally, new experiences when traveling such as amusement parks
and cruises to attract tourists.

Vocabulary
N Words/ Pronunciat Meaning in Examples
o phrases ion English
1 destinations /des.tɪ the place wher His letter never reac
ˈneɪ.ʃən / e someone is hed its destination.
going or where
something is
being sent or
taken
2 disruption / dɪsˈrʌp.ʃən he action of pre The accident brough
/ venting someth t widespread disrupti
ing on on the roads.
from continuin
g as usual or
as expected
3 Innovative /ˈɪn.ə.və.tɪv/ using new She was an
methods or imaginative and
ideas innovative manager.
4 Momentous /mə very important Whether or not to
ˈmen.təs/ because of move overseas was
effects on a momentous
future events decision for the
family.
5 Stakeholder /ˈsteɪk a person such Stakeholder will be
ˌhəʊl.dər/ as an responsible for this
employee, matter.
customer, or
citizen who is
involved with
an
organization,
society, etc.
 and therefore
has
responsibilities
towards it and
an interest in
its success
6 Strategize / to think of a People gathered
ˈstræt.ə.dʒa detailed plan together in his office
ɪz/ for achieving to strategize.
success in
situations such
as war, politics,
business,
industry, or
sport
7 Backyard /bækˈjɑːd/ a small space The house has a
surrounded by small backyard,
walls at the surrounded by a
back of a high brick wall.
house, usually
with a hard
surface
8 Proposition /ˌprɒp.ə an offer or He wrote to me last
ˈzɪʃ.ən/ suggestion, week regarding a
usually in business proposition
business he thought might
interest me.
9 Segment /ˈseɡ.mənt/ one of the Each of these
smaller groups products is aimed at
or amounts a specific market
that a larger
 group or segment.
amount can be
divided into
10 Capacity /kəˈpæs.ə.ti/ the total The stadium has a
amount that seating capacity of
can be 50,000.
contained or
produced
11 Trajectory /trə the curved Look! That is the
ˈdʒek.tər.i/ path that an trajectory of a bullet.
object follows
after it has
been thrown or
shot into the
air
12 Inflation /ɪnˈfleɪ.ʃən/ a general, Excess demand
continuous eventually led to
increase in wage inflation.
prices
13 Reinvention /ˌriː.ɪn the act of Fairy tales are
ˈven.ʃən/ producing templates whose re-
something new inventions tell us
based on about ourselves.
something that
aleady exists,
or the new
thing that is
produced
14 Demographic /ˌdem.ə relating to There have been
ˈɡræf.ɪk/ demography monumental social
and demographic
 changes in the
country.
15 Legacy /ˈleɡ.ə.si/ money or The war has left a
property that legacy of hatred.
you receive
from someone
after they die
16 Aggregation /ˈæɡ.rɪ.ɡət/ something Snowflakes are loose
formed by aggregates of ice
adding crystals.
together
several
amounts or
things
17 Revenue /ˈrev.ən.juː/ the income Government
that a revenues fell
government or dramatically.
company
receives
regularly
18 Stereotype / a set idea that The characters in
ˈster.i.ə.taɪp people have the book are just
/ about what stereotypes.
someone or
something is
like, especially
an idea that is
wrong
19 Fragmented /fræɡ consisting of In this increasingly
ˈmen.tɪd/ several fragmented society,
separate parts a sense of
 community is a thing
of the past.
20 Monolith /ˈmɒn.ə.lɪθ/ a large block of He said that the
stone standing National Health
by itself that Service had become
was put up by a vast bureaucratic
people in monolith.
ancient times