The travel industry is experiencing significant growth rates as it recovers from the COVID-19 pandemic. However, the cost-of-living crisis is creating headwinds.
To adapt, travel brands and destinations are focusing on values-based tourism that resonates more with consumers seeking transformational experiences. Caroline Bremner, senior industry manager at Euromonitor International, identified three trends shaping the travel and tourism sector in 2023.
First, China’s reopening to international tourism on January 8, is providing a much-needed boost to tourism. Euromonitor predicts exceptional growth of over 400% in 2023 for outbound tourism spending from China, which will help destinations in the Asia Pacific. However, the cost-of-living crisis may dampen global inbound tourism spending.
Second, values-based tourism products, such as sports, wellness, and eco-tourism, are gaining popularity, with average value growth of over 12% annually. Wellness packages, in particular, are expected to reach US $29.3b in 2023. Nature-based tourism, including adventure, eco-tourism, and sun and sea, is also increasingly popular as consumers seek nature and the wild as an antidote to urbanisation.
Third, the travel industry faces an existential crisis due to its high carbon footprint and dependence on fragile destinations. There is a growing collective effort to minimise negative impacts on the environment and local communities through sustainability. Sustainable travel packages are forecast to amount to US $134b in 2023, and 57.3% of travel executives noted that their customers would pay more for sustainable products and services.
However, only 47.8% of travel executives say that their company is investing in sustainable products and services or driving the sustainable transformation of back-end operations. The next stage of sustainable tourism is embracing net-zero emissions targets, and many companies are adopting greater transparency regarding carbon at the time of booking. The movement to decarbonise and embrace a just transition is growing stronger in 2023.