Global leisure travel set to triple to $15T by 2040

Global leisure travel spending is projected to skyrocket to $15 trillion by 2040, a dramatic increase from $5 trillion in 2024.

A recent Boston Consulting Group (BCG) report reveals a profound transformation in global leisure travel, projecting a tripling of spending to $15 trillion by 2040. This impressive growth, however, isn't being driven by traditional international jet-setting. Instead, the primary catalysts are domestic travel and the burgeoning consumer base in emerging economies, fundamentally reshaping industry dynamics and consumer behavior post-pandemic.

Domestic Travel Dominates Growth

The report indicates that domestic leisure travel will account for nearly $12 trillion of the projected spending by 2040, a substantial leap from $4.1 trillion in 2024. Regional travel is also expected to see significant expansion, tripling to over $2 trillion. While international travel is forecast to grow the fastest, it will still represent the smallest share of the market at $1.4 trillion.

Christina Mühlenbein, a BCG managing director and partner and co-author of the report, emphasized this shift: "With more people taking vacations—and taking them more frequently—we're seeing a profound shift in who's traveling, what they expect, and how they plan their journeys." The comprehensive study, which surveyed nearly 5,000 travelers across 11 countries and analyzed travel patterns in 68 markets, forecasts an annual spending increase of 8% through 2029, slowing slightly to 7% through 2040.

AI Reshapes Travel Planning

A notable trend highlighted in the report is the increasing adoption of artificial intelligence tools for trip planning, particularly among travelers from emerging markets. These "most digitally savvy" consumers often face "information overload" from numerous Browse touchpoints, making AI a valuable solution for streamlined and personalized travel discovery and booking.

In response, travel companies are actively developing AI-powered conversational booking agents. This technology enables highly personalized searches, and critically, has the potential to bypass traditional travel aggregators. BCG warns that this represents "an existential threat to travel companies" that fail to adapt.

Market Power Shifts East

The report identifies countries like China, India, Saudi Arabia, and Vietnam as the key drivers of future growth, anticipated to outpace established markets such as the United States, United Kingdom, and Germany. China's travel spending across all categories is projected to grow 10-11% annually, while India's domestic spending is expected to rise by an impressive 12% per year.

This geographical shift reflects broader global economic trends, including the expansion of the middle classes in these emerging markets and a cultural inclination towards prioritizing experiences over material possessions. However, budgetary considerations remain pertinent. Research by Simon-Kucher suggests that leisure budgets will only grow by a modest 1% globally in 2025, with declines observed in countries like France and Italy, while markets such as the UAE and Spain are expected to see increases.