Travel Forecast 2024

After the depths of the pandemic, leisure travel spending came back strongly from 2022 right up to today.

We can’t expect it would keep growing at that pace throughout the next 5 years, but its expansion will be impressive, and likely better than researchers estimate. Of course, inflation and wars are ensuring that the travel sector doesn’t overheat. But with a globe of 7 billion people, it makes sense that travel will be on the minds of many.

What’s Exciting about Travel Business in 2024?

It’s that new travel destinations are opening up to the eager awareness of tens of millions of international travelers and the money tourists spend makes it a great business opportunity for travel management software companies, given travel is managed first online via Google or travel software. And for venue operators, hotels, restaurants and tour operators, the online marketplace can bring significant financial success.

Lowering of Interest Rates in Q3, 2024

Something to consider is that as mortgage rates ease, millions of US homeowners will be able to sell their high-priced properties, many of them baby boomers, they will be considering a vacation to celebrate and finally relax. Some want to move internationally, while others seek to move to the southern US. Tourist businesses in Florida, Texas, and California will benefit.

And this brings real estate buyers into the international real estate market. They will travel to a variety of countries such as Spain, Portugal, Thailand, Mexico, and more to research properties that are available or planned.

Business travel will grow again too, but that segment will struggle to grow as companies try to reign in spending, deal with inflation and high interest rates, and make their business trips to visit clients, prospects or attend conferences count. Zoom and Facetime will replace many business trips that would have happened 5 years ago.

Still, GBTA’s Business Travel Index Outlook report, forecasts business travel spending will reach $1.4 trillion in 2024 and nearly $1.8 trillion by 2027. The global business travel market may grow from $711.1 billion in 2021 to $3 trillion by 2030, a compounded annual growth rate of 13.3%. 50% of businesses are reviewing their travel policies in light of the growth of work from home.

Statista Travel Market Report

According to a Statista Travel market report, Travel & Tourism is predicted to to see revenues climb at a slightly higher pace than prepandemic years. The growth might be attributed to the excess of stimulus spending by governments, the revenge travel surge, and a growth in tourism facilities, resorts and services. It’s easier to travel than ever, and it’s safer and perhaps more rewarding.

Travel & Tourism Market by Country. Screenshot courtesy of Statista.

Americans, Europeans and Asians are making a shift to experiences in their chosen destinations rather than just sightseeing. There is a discontent globally and travel is seen as the ultimate antidote to that pain.

The world, including the US, has had time to devote to tourism development given it is a serious contributor to US GDP. However, we wonder given the ease of remote digital work, Gen Z worker’s dreams, and that travel is up for older generations, that the travel industry forecast for the next 5 years might be on the low side.

If you’re a travel tour operator, travel management software entrepreneur/financier, or hotel and venue manager, the future looks very bright. If the US economy should grow slightly which it surely will, workers will be demanding more time off for travel experiences.

A $222 Billion Market Brewing

The demand for leisure travel and Bleisure travel is expected to grow to almost $200 Billion in 2024, and then by 2.9% to reach $222.8 Billion by 2028. This is just ahead of China’s spending of $184 Billion, and almost 4 times that of Germany.
The hotel segment is expected to comprise the largest share at $110 Billion and by 2028, hotel customers will reach 167.4 million. The vacation rentals market will reach almost $20 Billion this year and the average revenue per customer will hit $315.90, of which 84% will be generated online.

Travel & Tourism Market Revenue Forecast. Screenshot courtesy of Statista.

This underscores the importance of strong digital marketing to reach and gain the attention of travelers, impact them with excellent content, build brand loyalty, and create ongoing bookings and revenue.

The success of VRBO and AirBnB highlight the hunger for vacation rentals in the US and elsewhere. Reaching US travelers is the top priority, yet foreign travelers are a sizable target audience too. Here, your online marketing strategy can generate the highest reach, best impact, and best quality leads through personalized advertising and content marketing.

Google, Facebook and YouTube are the top sources of travel leads and revenue. YouTube especially, offers the best proof of experience online and video publishers enjoy billions of views. A combined creative content, social media, YouTube and Google search visibility together can generate significant success. Travel searches on Google in the billions tells us travelers want to know more, find deals and immersive experiences, and get others’ reviews and opinions on destinations and service providers.

US packaged holiday sales will reach $30 Billion this year and will rise slightly by $1 billion by 2028. Online sales will generate 73% of revenues in the packaged holidays segment. Statista’s research shows China’s revenue will be nearly $60 Billion this year in packaged holidays.

Top Travel Companies. Screenshot courtesy of Statista.

The 2024/2025 travel and tourism forecast sees the packaged holiday market shifting towards adventure travel, eco-friendly and sustainable options. But for now, tour package buyers want cultural experiences, awesome scenery, along with great food and wine.

The sheer size of travel demand ensures many vacation rental operators will find their business ventures successful. Many travelers are seeking accommodations and tours outside of Airbnb and hotels.com.

Cruises comprise another option for travelers and should generate $15 billion in revenue during 2024 with additional growth of $3 billion by 2028. The average revenue per customer is expected to by $1,110. Online sales in this segment is expected to be 21% of the US cruise marketplace. The shift is away from massive ships to smaller more immersive/intimate vessels that can provide niche experiences.

Travel Service Companies

Booking Holdings, Airbnb, and Expedia Group will continue to dominate the travel market, although the industry spawns more small business startups than any other economic sector. They take the form of tour companies, hotels, restaurants, tourism venues, suppliers, and niche transportation providers (taxis, car rental, Uber, etc.).

Investment Money Might Flow into Travel Businesses: There’s up to $6 Trillion invested in money markets which could flow into many investment opportunities. Given travel has a strong demand outlook, and since credit interest rates will fall, more Americans and Europeans will travel in 2024/2025 and that lifts all ships in the harbor. As rates fall, consumers may put more of their savings into real estate, stocks, or to start their own business. If 2025 brings deregulation in the US, the performance of all businesses including airlines will grow. Fuel might be cheaper, along with food, although accommodations may not grow as strongly.

Opportunities for vacation rental owners will help fill the hotel void and provide lower-cost, longer-term stays. Travelers are looking for longer vacations or Bleisure stays. Tour operators are expected to enjoy a boom in customers and revenues as travelers develop a taste for guided personal tours to satisfy their quest for more meaningful, immersive, experiences.

Conclusion: Get Ready for a Great 5 Year Growth Phase for the Travel Industry

The 2024 forecast is excellent for the travel sector, yet the next 5 years could see the market mature further, with technology providing better travel management. thus boosting travelers confidence, and access to affordable travel options.

It’s hard to imagine travel today without smartphones and all they do. With AI companies such as Nvidia, Intel and AMD planning to incorporate advanced AI GPU’s in laptops and smartphones, these tools will make travelers feel even more confident and certain they’ll find and enjoy the best travel experiences possible.

When you look at the best destinations for travelers, you know the world is aware of these magnificent places too. Global demand is the fastest growing segment, however US economic growth will make the US the center of the travel universe. Countries such as Spain, Italy and France will benefit.

Investigate more about travel management software and why this is one of the hottest IT products.