Leisure Travel Market Size, Share, Growth, and Industry Analysis, By Type (Group Travel & Personal Travel), By Downstream Industry (Offline Channels & Online Channels), and Regional Insights and Forecast to 2032

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LEISURE TRAVEL MARKET OVERVIEW

The global Leisure travel market size valued at approximately USD 869.6 billion in 2024 and is expected to reach USD 1,639.40 billion by 2032, growing at a compound annual growth rate (CAGR) of about 7.3 % from 2024 to 2032

Leisure travel involves travel for relaxation, recreation, or entertainment rather than travel for work and other obligations. It usually involves vacations, holidays, or trips to visit new places, explore different cultures, or just unwind.

There are various factors driving the leisure travel market growth such as, increasing disposable income to spend on leisure activities and affordable and easy connectivity across the globe. Leisure travel markets have been significantly contributing to the economy. They often strengthen those industries like hospitality, food and beverage, transportation, and retail. Countries, through a good touristic infrastructure, are receiving benefits in terms of foreign exchange earnings, infrastructure development, and cultural exchange. However, those benefits may derive from traveling abroad.

COVID-19 IMPACT

Widespread Travel Bans and Border Closures Led to a Sharp Drop in Leisure Travel

The global COVID-19 pandemic has been unprecedented and staggering, with the market experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. The sudden market growth reflected by the rise in CAGR is attributable to the market’s growth and demand returning to pre-pandemic levels.

The leisure travel industry suffered a severe blow with regard to international travel in the crisis, mainly due to travel bans and border closures. It caused a drastic fall in international and domestic travel, which saw several governments implement stringent measures to curb the increased community spread of the virus. Results presented by most prominent destinations indicated steep declines in visitation, which in turn translated into losses in revenue for most airlines, hotels, and tourism-based economies. The whole industry saw employees being laid off and many going out of business. Even as controls are relaxing, consumer preferences have changed due to the pandemic, focusing more on health and flexible travel that is increasingly localized and nature-based.

LATEST TREND

Personalised Itineraries and Unique Experiences to Drive Market Growth

Personalization is one big trend that accelerates growth for the leisure travel market because people are now looking for itineraries that can truly make their experience unique from others. Most travelers now want to have trips that suit their preferences, interests, and lifestyle. It has thrown up lucrative opportunities for customized travel services that curate activities, destinations that are off the beaten path, and travel itineraries," the article says. Such experiences of travel get much closer to creating a connection with a destination and the making of the memory itself. This trend will resonate very well among those who place a great emphasis on authenticity, uniqueness, and special moments, with the potential to spend more and keep repeat customers on the road to enjoying travel beyond just a typical vacation.

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LEISURE TRAVEL MARKET SEGMENTATION

By Type

Based on Type, the global market can be categorized into Group Travel & Personal Travel

• Group Travel: Organized trips which have a number of people traveling together, facilitated by a travel agency or tour operator or organization, are group travels. They may include family vacations, school field trips, and corporate retreats.

• Personal Travel: Personal travel is travel done alone or with a small group, usually that of relatives or close friends, with the sole focus being vacationing. It includes individual travels, romantic getaways for couples, and vacations by families.

By Downstream Industry

Based on downstream industry, the global market can be categorized into Offline Channels & Online Channels

• Offline Channels: Offline channels are those old orthodox ways of booking and planning travel through travel agents, physical tour operators, or consultation in person. These channels provide personalized services and expert consultancy responses very appealingly to a traveller who prefers face to face interactions.

• Online Channels: Online channels encompass digital platforms used for researching, booking, and planning travel. This includes travel booking websites, mobile apps, and online travel agencies.

MARKET DYNAMICS

Market dynamics include driving and restraining factors, opportunities and challenges stating the market conditions.

Driving Factors

Increasing Disposable Income to Spend on Leisure Activities to Boost the Market

A factor in the leisure travel market growth is the increasing disposable income to spend on leisure activities. The fact that nations grow and their citizens earn more, thus being able to save for travel and leisure experiences, is the reason. This increased disposable income enables more travel to newer destinations, pampering in expensive hotels, and indulging in other activities previously regarded as out of reach for many travelers. The increase in financial capacity has undoubtedly contributed significantly to the upsurge in demand for both domestic and international leisure travel.

Affordable and Easy Connectivity Across the Globe to Expand the Market

Affordable and easy connectivity across the globe is another key aspect of the leisure travel market. International and domestic travel have become affordable to a larger population due to the growth of several low-cost airlines, setting up better transportation networks, and bringing down the prices of travel services. From budget carriers to high-speed trains and regional flight networks, more and more ways have made new and exotic places available for the average person. That is, infrastructure enabling seamless travel now allows millions to explore new regions, engage in adventurous experiences, and enjoy new sources of market opportunities.

Restraining Factor

High Travel Costs to Potentially Impede Market Growth

A restraining element within the growth of the leisure travel market is the high travel costs. Increasingly soaring airfares, accommodations, and activities can have their limitations, particularly for budget travelers. Even with the increase in fuel price, inflation, and service fees, travel has become quite difficult for some consumers to prioritize leisure. Such financial constraints indeed reduce demand, especially among families or individuals with lesser discretionary income.

Opportunity

Technology Integration To Create Opportunity for the Product in the Market

The integration of technology has brought great promise to the leisure travel industry, making it much more simple to plan and even more enjoyable to travel within. Mobile applications, AI to suggest places based on prior trips and even through virtual reality (VR) previews-a macro perspective where travelers can design their trip weeks in advance-can engage much deeper with the destination before their arrival. Contactless check-in and boarding, digital boarding passes, automated customer service, and other such things are adding to the process of traveling easier, safer, and more efficiently.

Challenge

Health and Safety Concerns Could Be a Potential Challenge for Consumers

Health and safety concerns will still present challenges for consumers in the leisure travel market. There are still some people hesitant when it comes to the possibility of developing an infectious disease, an infection outbreak, and inadequate healthcare services at some destinations. Such things may keep travelers from booking trips, particularly to places with lower capacity to provide health services; even a fear of new pandemics or threats from health may stop travelers from having their trips booked. Further, strict health protocols such as vaccination and testing requirements are barriers affecting consumers' confidence, thereby restricting travel participation. After all, safety will always be a priority evidence for sustained market growth.

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LEISURE TRAVEL MARKET REGIONAL INSIGHTS

• North America

North America is one of the most popular leisure travel markets around the world. The country is well endowed with a strong infrastructure. The United States Leisure Travel Market area boasts of a wealthy populace and a fully developed tourism industry. Domestic travel is very popular; national parks, cultural landmarks, and city tourism attract millions of visitors each year. The region has also witnessed increasing demand for unique experiences such as wellness or adventure tourism. It is however considerable that high travel costs and fluctuating fuel prices should impact the growth of this region.

• Europe

Europe is indeed the number one market for leisure travel in the world; it has history, culture, and an elaborate tourism network on the whole continent. Paris, Rome, and Barcelona are just the most prominent cities, with major natural wonders like the Alps and Mediterranean coast. Within the Schengen Area it is easy to travel and do so cheaply with budget airlines that fly across Europe. Still, there are economic imbalances that create hurdles to growth and then of course sustainability issues.

• Asia

Asia is really turning as a market for leisure travel because of the growing number of people coming into the middle class and having more disposable income with changing consumption patterns. Some of the frequently visited destinations are Japan, Thailand, China, and India - all boasting of different cultural and natural attractions. The increase of demand for travel, be it domestic or international, has resulted from better connectivity and budget airlines. However, there are issues in political instability, environment, and different infrastructure quality, which would affect market stability negatively in time. Growth continues to harness technology integration and luxury and wellness tourism.

KEY INDUSTRY PLAYERS

Key Industry Players Shaping the Market Through Innovation and Market Expansion

In a most specific sense, the leisure travel market is molded by its key players through innovations and strategic market extensions. Major travel companies, airlines, and many other online travel agencies (OTA) always kick-occasion up through technology facilitation to support advancements in user experience and make it efficient to source offerings. Innovations range from AI recommendations to virtual reality tours, down to even mobile app solutions for easier booking. New entry in these growing markets witnessed major airlines and hospitality brands leapfrog into the region with cost-effective deals and tailored packages that, besides attracting other consumer segments open to more possibilities, bring it closer to the range of personalized and seamless experiences with increased accessibility.

List of Top Leisure Travel Companies

• Alibaba (China)
• Hostelworld (Ireland)
• Webjet (Australia)
• MakeMyTrip (India)
• TripAdvisor (U.S.)
• Expedia (U.S.)
• Ctrip.com International (China)
• Airbnb (U.S.)
• Booking Holdings (U.S.)
• Trivago (Germany)
• Tuniu (China)
• Yatra Online (India)

KEY INDUSTRY DEVELOPMENT

March 2024: American Express Global Business entered into a definitive agreement to acquire CWT, a global business travel and meetings solutions provider, in a transaction that values CWT at approximately $570 million on a cash-free, debt-free basis, subject to certain assumptions and purchase price adjustments.

REPORT COVERAGE

The study encompasses a comprehensive SWOT analysis and provides insights into future developments within the market. It examines various factors that contribute to the growth of the market, exploring a wide range of market categories and potential applications that may impact its trajectory in the coming years. The analysis takes into account both current trends and historical turning points, providing a holistic understanding of the market's components and identifying potential areas for growth.

The leisure travel market is poised for a continued boom pushed by increasing disposable income to spend on leisure activities and affordable and easy connectivity across the globe. Despite challenges, which include health and safety concerns. Key industry players are advancing via technological upgrades and strategic marketplace growth, enhancing the supply and attraction of leisure travel. As customer choices shift towards trendy options, the leisure travel market is expected to thrive, with persistent innovation and a broader reputation fueling its destiny prospects.