A recent report from BCG indicates that the global leisure travel sector is expected to expand to a staggering $15 trillion by 2040, a significant rise from the current $5 trillion in 2024.

This remarkable growth is largely driven by a rising middle class in developing regions, a cultural shift towards prioritizing experiences over material goods, and a focus on creating lasting memories. Domestic travel is particularly dominant in emerging markets, underscoring the importance for stakeholders to engage local and regional tourists.

The report highlights that while international travel is included, the future traveler demographic will be increasingly diverse, with a notable influx from emerging nations such as China, India, Saudi Arabia, Bulgaria, and Cambodia. These travelers are expected to be younger and more adept with technology, prompting travel companies to adapt to their changing preferences while still catering to traditional tourists.

Leisure travel expenditures are anticipated to grow by 8% annually until 2029, tapering to 7% through 2040. Domestic leisure travel spending is projected to soar to around $11.7 trillion by 2040, up from $4.1 trillion in 2024. Regional leisure travel is expected to triple to over $2 trillion, while international leisure travel is set to increase more than threefold to approximately $1.4 trillion during the same timeframe.

According to the findings, travelers still favor classic destinations such as beaches, nature spots, and urban areas, but there is a growing interest in curated, purpose-driven experiences, including wellness and spiritual journeys. Emerging markets, especially China, India, and Saudi Arabia, are pivotal in driving the increase in leisure travel spending.

Millennials and Gen-Z are becoming the most influential groups in travel, planning more trips and leveraging digital technologies. New travel trends are emerging, including multigenerational and blended travel, alongside a notable rise in solo travel. These future travelers expect digital services, highly personalized experiences, cultural relevance, and community-focused options.

Recent trends show that the reasons for leisure travel go beyond mere vacations, with travelers seeking meaningful experiences, convenience, and alignment with their lifestyles. While relaxation, exploration, outdoor activities, and visiting friends and family remain key motivators, interests in health and wellness, food tourism, and 'bleisure' travel (a mix of business and leisure) are on the rise.

Interestingly, over 70% of travelers from emerging markets intend to blend work with leisure travel. The advent of AI, particularly large language models, is transforming how travelers plan and book their trips, allowing for more interactive and personalized search experiences. Travel companies must evolve by optimizing for AI-driven discovery, investing in AI chatbots, and integrating AI with human interaction to provide seamless service.