Booming disposable incomes in emerging markets have revolutionized international travel and tourism, propelling unprecedented growth in travel demand. As Asia, Africa, and Latin America experience a robust economic boom, their populations are gaining more consumer wallets.
The rise in consumer wealth presented new opportunities for tourism growth, thereby reshaping global tourism. Moreover, the increase in disposable incomes not only set the pace of global travel but also bolstered tourism expenditure.
The travel economy potential excited businesses and states, forcing a proportionate response by emerging diverse markets. The influence of rising consumer wealth on travel expenditure is expected to continue reshaping the global tourism industry, subsequently leading to substantial growth.
The Expansion of Travel Demand Brought About by Rising Disposable Income Globally
The disposable income among the middle-class populations in the emerging markets, such as China, India, Brazil, and Indonesia for the last two to three decades, catalyzed the expansion of the global travel supply. The trend obliterated the earlier rhetoric of promoting the now-considered largely as the international outbound market.
The phenomenon created opportunities for tourism consumption as a function of the growth of overseas travel in the emerging markets. A prime example of the impact of rising disposable travel demand was in China in 2019, where the registered number of outbound tourists exceeded the 150 million.
The growing number of the Chinese middle class and their zeal for international holidays and travel opportunities propelled the number into becoming the escapees’ largest global tourist group. Moreover, the tourists from China were the highest global spenders, accounting for 277 billion dollars that year.
Emerging Markets: The Future of Global Tourism Growth
In the foreseeable future, the data gathered reliably estimates that by 2030, emerging markets will generate over 40% of global tourism growth. For instance, with India and Brazil expected to double the number of tourists visiting other countries, the number of tourists traveling from India is estimated to reach 50 million by 2025. Therefore, this factor will positively affect the industry, implying that 40% of tourists will emanate from emerging markets.
The Impact of Economic Growth on Travel Trends
Economic growth of emerging markets is directly related to travel trends, as it boosts the number of people who have the disposable income to travel. The elevated discretionary income will positively precede the needs of tourists, meaning that an increasing number of people will be traveling to various parts of the globe.
As such, “the destinations that benefited from the growth in travel and which were able to appeal to the new tourists tend in the new emerging economies.” In 2020, a considerable finding showed that tourism demand from India increased by 35%, and it is estimated that the country had close to 30 million outbound travelers.
The robust shift was as a result of the escalating Indian middle class coupled with developed infrastructure and transport systems in the country. The existing market in India preferred luxury traveling, and the increasing rise of experiential traveling stimulated global tourism operators.
Affluent Markets to Boost Travel Expenditure by 2030
Obviously, by 2030, affluent markets will boost travel expenditure amounting to 50%, translating to an extra $450 billion in the global tourism economy. The additional wealth in the existing markets will positively affect the increased number of travels, meaning that rich tourists from emerging markets will be traveling frequently and for a longer duration.
Notably, these people will be attracted to high-geared destinations’ tourism attributes and aspects that are not feasible or prevalent elsewhere. As such, tourism operators will improve their services through adjusting them to satisfy undeniably wealthy tourists’ demands and expectations.
The Role of Wealth in Shaping New Tourism Trends
The increase in consumer wealth in emerging markets is one of the most significant factors that have had an impact on the growth of the global travel industry. Several aspects can illuminate the role of the increasing wealth in determining new tourism trends and travel demand. First, as the average propensity to consume rises, people tend to spend more money on travel.
By 2025, over $300 billion, with international tourism accounting for 40% of this total wealth, will be spent by the travelers in emerging markets. Second, there have been investments in the travel infrastructure. Specifically, the governments in emerging markets have invested in the necessary infrastructure for travel and tourism, e.g., airports, roads, and public transportation. These investments are anticipated to result in a 30% rise in outbound tourism by 2030.
Accessibility and Changing Tourism Preferences in Emerging Markets
Third, international travel has become more accessible for the members of the middle class in emerging markets who now have the chance to fly with low-cost airlines. By 2025, there will be a 20% increase in market share for low-cost carriers in Southeast Asia and Latin America.
Fourth, the wealth accumulation has caused substantial changes in people’s tourism preferences, with the middle and high-income earners in developing countries being luxurious travelers, for whom experiences are more important.
By 2030, as their disposable incomes increase, travel spending by the wealthy residents of emerging markets will grow by 60%, with the entirety lost being the high-end tourists’ sector. Fifth, wealthier consumers are more environmentally conscious. By 2030, 25% of all travelers in emerging markets will prefer to visit sustainable tourist destinations.
Digitalization and Travel Innovation in Emerging Markets
Digitalization and Travel Innovation: The digital revolution in emerging markets has fueled the spread of online travel platforms, giving consumers more flexibility in planning and organizing their trips. By 2025, the online travel market in emerging markets is set to grow by 40%, supporting the rise in tourism traffic.
Cultural and Heritage Tourism Trends
Cultural and Heritage Tourism: Tourists from emerging markets increasingly gain insight into their own cultural background and backgrounds or aim to gain a more profound perspective on the cultural heritage of other regions.
Consequently, cultural tourism is expected to grow by 25% by 2030 in the most saturated regions worldwide. The intricacies of the relationship between the development of the global travel industry and growing consumer wealth once again emphasize how interconnected these factors are and how the strengthening of the position of emerging markets would influence the demand for tourism and travel-related initiatives.
With their rise, highly dynamic and determined by internal and external factors, the role of emerging markets in tourism and the corresponding trends of travel would be even more palpable, offering numerous growth prospects across the sector.
Future Projections for Global Tourism Growth Driven by Emerging Markets
Looking forward, it is possible to expect that the dynamics of the global travel industry will be determined by the impact of the increasing economic power of certain countries described above that would exponentially boost demand for tourism.
By 2035, emerging markets are projected to account for almost half of the global travel industry, such that the development and international expansion of these regions would be the driving factor of the global tourism economy.
In other words, the fast-paced movement of tourists from emerging markets would be rightfully regarded as the characteristic feature and the biggest developmental tendencies in the global tourism sector in the upcoming decade.
The Role of Emerging Markets in Shaping the Global Tourism Industry
Not only does it mean new opportunities for the rapidly increasing number of tourists that have the economic wherewithal to travel, but it will also create diverse opportunities, as well as challenges, for the tourism operators, who will need to appeal to the unique preferences of tourists from emerging markets.
Arguably, it is reasonable to suggest the locations and attractions that will manage to draw the travelers from the corresponding countries will display twice the growth rate in comparison to the traditional tourist locations in Europe and North America.
Tourism Infrastructure Growth in Emerging Markets
Another reason is that the economic growth observed in emerging markets will lead to the extensive development of the travel infrastructure selected within the countries. That is, new airports, hotels, and attractions will open, ensuring that the flow of tourists will be met. As a result, the development of tourism within emerging markets will contribute to the overall expansion of the global tourism sector.
Emerging Markets: The Future of Global Tourism
Thus, a shift in global activity will occur as emerging markets will determine the future of the global tourism industry. The outstanding growth and the alterations in the patterns of travel will define the development of tourism domestically and globally.
