Airport Experience® News - ACDBE & Small Business Issue 2024

DATA CHECK

A “JOURNEY OF DISRUPTION” New McKinsey Report Forecasts An Altered Travel Landscape

BY CAROL WARD

Web <2024> Exhibit <1> of <5>

Domestic and Regional Demand After falling by 75% in 2020, travel is nearing full recovery, the report said. Spending on travel is expected to reach $8.6 trillion globally in 2024, representing roughly 9% of this year’s global GDP. But while travelers all over the world are venturing out to new destinations, the bulk of travel occurs close to home. Domestic travel still represents 75% of global travel spending. The United States is the world’s largest domestic travel market at $1 trillion in annual spending. Sixty-eight percent of all trips that start in the United States remain within its borders, the report said. While traffic patterns are expected to shift in the coming six years, domestic trips will still make up the lion’s share of travel through 2030. However, China’s domestic travel market is expected to grow 12% annually and overtake the United States to become the world’s largest by 2030. Meantime in the U.S., while domestic travel is projected to continue its growth trajectory, intraregional and international travel are expected to advance at a quicker pace, the report showed. For all of North America, intraregional and international travel made of 12% of total travel in 2023, and that figure is expected to rise to 16% by 2030. The United States, Germany, the United Kingdom, China, and France remain the world’s five largest sources of travelers, in that order. These countries collectively accounted for 38% of international travel spending in 2023 and are expected to remain the top five source markets through 2030, the report said. However, other, smaller destinations are gaining traction as travelers seek lesser-known places to visit.

Domestic Travel Still Represents the Bulk of the Travel Market, Even as Intraregional and Interregional Travel Ramp Up Growth

Global outbound travel spending, by source, $ billion 1

Global outbound lodging nights, by source, billions

38.7

8.6

Interregional

0.9

Interregional

7.3

Intraregional

1.7

27.4

0.5 5.5

Intraregional

4.5

11.6

0.9

6.8

Domestic

6.0

Domestic

19.8

16.1

4.1

2023

2030 projected

2023

2030 projected

Note: Interregional refers to international travel outside a region; intraregional refers to international travel within a region. Regions for the purposes of this exhibit are Americas, Asia, Europe, and Middle East and Africa. 1 Based on in ation-adjusted 2024 dollars. Source: Oxford Economics

T he uptick in air travel demand may be on the verge of becoming a travel boom, research and consulting firm McKinsey & Company says, with tourism and hospitality demand set to soar. According to McKinsey’s The State of Tourism and Hospitality 2024 report, the growth will be powered by new travelers, destinations and trends, with a departure from the norm as shifting source markets and destinations, growing demand for experiential and luxury travel, and innovative business strategies are all combining to dramatically alter the industry landscape.

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AX NEWS JULY/AUGUST 2024