The global travel sector is set for a decade of robust expansion, projected to grow faster than the world economy, according to the highly anticipated World Travel Market (WTM) Global Travel Report, released today at the opening of WTM. Fueled by trends like “gigtripping,” the demand for authentic experiences, and the integration of Artificial Intelligence (AI), the industry is shifting consumer behavior and reaching new record levels.
The research, conducted by Tourism Economics, an Oxford Economics company, forecasts that the travel industry is on track to achieve an annual growth rate of 3.5% over the next 10 years, significantly surpassing the global economic growth projection of 2.5% per year for the same period. By 2035, the travel sector is expected to generate over $16 trillion globally, accounting for nearly 12% of the world’s GDP.
The Changing Face of Travel
Global travel has fully rebounded from the effects of the pandemic, with international arrivals set to exceed 1.5 billion in 2025, surpassing the previous 2019 record. This growth is driven by consumers who continue to prioritize spending on travel experiences.
Key shifts in how and where people are traveling include:
Longer Stays: The former trend of taking numerous, short trips has reversed. Travelers are now choosing to stay longer in single destinations. This trend is particularly pronounced in the Middle East, where trip lengths have increased by approximately two-thirds compared to 2019, potentially driven by significant infrastructure investment in the region, particularly in Saudi Arabia.
Climate-Conscious Travel: Concerns over extreme heat and wildfires are causing demand to shift from the traditional peak summer months to shoulder or off-season periods. This has given rise to the ‘cool-cations’ trend, with travel to Nordic countries (Sweden, Norway, and Finland) expected to grow by 9% in 2025, outpacing many conventional summer spots.
Shifting Destinations: While bucket-list favorites like Dubai and Bangkok remain popular, driving a 20% growth in international arrivals across the top 50 urban destinations, travelers are increasingly seeking new experiences and better value. This has led to the rising popularity of alternative destinations such as Albania and El Salvador.
Gigtripping and the Quest for Authenticity
Two powerful consumer trends continue to reshape the industry’s focus:
Gigtripping’s Encore: The trend of traveling specifically for major live events, such as sporting competitions and high-profile music tours (like Taylor Swift’s Eras Tour), shows no sign of slowing down. The live events industry is projected to grow by nearly 6% annually over the next five years, exceeding the broader industry growth rate. Destinations are actively encouraging major touring artists to host events, recognizing their massive economic impact.
The Authentic Experience: Today’s travelers are seeking culturally rich, handcrafted experiences that involve authentic engagement, such as meeting locals and sampling regional food and drink. This quest for authenticity is prompting a focus on storytelling and is causing many travelers to pursue less crowded destinations, leading to shifts in seasonality in some regions.
Technology as a Growth Accelerator
Technology, especially AI, is becoming a core driver of demand and personalization.
AI and Personalization: AI tools are proving essential in crafting customized and meaningful travel experiences, with three times as many travel professionals reporting that AI will increase (rather than decrease) overall travel spending.
Seamless Journeys: Digital automation in transport hubs, including biometrics and smart security, is creating a faster, more seamless travel process. Meanwhile, instant messaging platforms like WhatsApp are helping businesses provide immediate, localized customer information.
Increased Capacity Fuels Demand
A significant increase in capacity across the transportation and accommodation sectors is also contributing to the boom:
Air Travel: Airline expansion remains vigorous, with over 15,000 new aircraft currently on order from Boeing and Airbus.
Cruise Sector: The cruise industry is recovering rapidly, with global passenger numbers expected to surpass 38 million in 2025. This growth is supported by the launch of 15 new vessels and the entry of new brands, such as AROYA cruises targeting the Arabian market.
Lodging: 2025 is projected to be another robust year for expansion, with over 500,000 new hotel rooms expected to open globally, and another one million rooms currently under construction.
North America Faces Headwinds
While the overall outlook is strong, the report sounds a note of caution regarding North America. The immediate outlook for the United States is “less optimistic,” with inbound arrivals projected to decrease by 6% in 2025. The report suggests the country is unlikely to regain its 2019 peak levels until 2029. Economic and geopolitical headwinds, including new trade tariffs causing higher consumer inflation, are cited as undermining spending power and creating near-term uncertainty for the industry in the region.
