Global travel is back and buzzing. More people are travelling to less
visited destinations, luxury-hospitality is growing faster than any
other industry segment, and younger generations show significant,
growing interest in travel, according to a new McKinsey report, State of Tourism and Hospitality 2024.
McKinsey says tourism and hospitality are on a journey of disruption.
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.
“Given this momentous change,” McKinsey says it’s important for stakeholders to consider and strategize on four major themes:
- The bulk of travel is close to home.
Although international travel might draw headlines, stakeholders
shouldn’t neglect the big opportunities in their backyards. Domestic
travel still represents the bulk of travel spending, and intraregional
tourism is on the rise.
- Consumers increasingly prioritise travel—when it’s on their own terms.
Interest in travel is booming, but travellers are no longer content
with a one-size-fits-all experience. Individual personalisation might
not always be practical, but savvy industry players can use segmentation
and hypothesis-driven testing to improve their value propositions.
Those that fail to articulate target customer segments and adapt their
offerings accordingly risk getting left behind.
- The face of luxury travel is changing.
Demand for luxury tourism and hospitality is expected to grow faster
than any other travel segment today—particularly in Asia. It’s crucial
to understand that luxury travellers don’t make up a monolith.
Segmenting by age, nationality, and net worth can reveal varied and
evolving preferences and behaviours.
- As tourism grows, destinations will need to prepare to mitigate overcrowding.
Destinations need to be ready to handle the large tourist flows of
tomorrow. Now is the time for stakeholders to plan, develop, and invest
in mitigation strategies. Equipped with accurate assessments of carrying
capacities and enhanced abilities to gather and analyse data,
destinations can improve their transportation and infrastructure, build
tourism-ready workforces, and preserve their natural and cultural
heritages.