Global tourism market to become $16 trillion economy by 2034
A new Kearney study has suggested global tourism could account for over a tenth of the world’s economy by 2034. This could lead to a projected $16 trillion contribution to global GDP.
During the early stages of the pandemic, international lockdowns saw many airlines slip into crisis mode. With demand suddenly drying up entirely, many companies were forced to beg for state bailouts, or face collapse. In the years since, huge inflationary pressures have slowed the recovery from this - and in 2024, a complicated picture emerged, in which the average budget relating to leisure and travel was said to be heading for 9% growth - though the average distance travelled was anticipated to shrink.
In spite of this, and persistent headwinds around inflation and consumer spending power, a new report from Kearney has suggested that the global tourism market is set to boom over the coming nine years.
According to the study, the tourism sector is projected to serve about 30 billion tourist visits by 2034 - contributing $16 trillion to global GDP in the process. As burgeoning middle classes in various economies come to value travel and experience spending, it is predicted to propel tourist spending to new heights - and account for 11% of the world’s economy. Asia - and particularly China - will lead the charge on this growth.
In particular, high-growth segments like sports tourism are expected to drive the expanding market - with consumers following events around the world spending $1.7 trillion by 2032. At the same time, ecotourism which is growing at 14% CAGR, are redefining travel priorities. The global travel technology market, worth $10.5 billion in 2024, is set to nearly double by 2033, as 91% of industry tech leaders anticipate aggressive investment increases.
To support this boom, Kearney anticipates the industry will need to expand significantly. For example, the world will require an estimated 7 million new hotel rooms, 15 million additional flights annually and investment in infrastructure capable of supporting 30 billion trips globally. But these are not the only challenges.
As the world’s economy continues to struggle with its decarbonisation, ramping up travel threatens to further derail that process. Travel and tourism currently accounts for 8% of global greenhouse gas emissions, and without intervention that could rise to 15% by 2034. Meanwhile, workforce shortages are escalating. The UK alone saw 53% turnover in 2022-2023, while the US hospitality industry continues to lag in hiring despite 16%-above-inflation wage increases - and ramping up the number of hotel rooms, at a time when private equity ownership of living space is driving a global housing shortage, may mean workers cannot afford to live near the venues they are expected to serve. This will further deplete local workforces.
Bob Willen, managing partner and chair at Kearney, commented, "Tourism is a powerful driver of jobs, culture and economic growth around the world. As the industry grows to meet the needs of billions more travellers, it also needs to evolve. That means using technology responsibly, supporting workers and small businesses, protecting the planet, and making sure local communities truly benefit... It’s about creating a travel and tourism sector that’s not just bigger, but works in everyone’s interests."
The report was produced in collaboration with the World Economic Forum, and the Ministry of Tourism Saudi Arabia. With Saudi Arabia also hoping to benefit from the surge in tourism, while it attempts to bolster its private sector, it has some way to go to adjust its own support of workers and environmental policies. More than 20,000 workers have died making Crown Prince Mohammed bin Salman’s vision for Saudi Arabia in the last eight years - including during work on would-be tourist-draw The Line - and while the size of that project has been reduced, it will be unlikely to be net zero. Saudi Arabia aims for 50% of electricity to be generated with renewable energy by 2030, only about 0.1% of electricity was generated this way in 2019.
