15.1 Emerging global tourism markets and trends
7 min read•july 30, 2024
Emerging global tourism markets are reshaping the travel industry. Economic growth in developing countries and changing demographics are creating new opportunities for hospitality businesses. These shifts are driving demand for unique experiences and customized offerings.
Infrastructure improvements and government support are making emerging destinations more accessible. Meanwhile, technology is revolutionizing how people plan and book travel. Understanding these trends is crucial for businesses looking to tap into the potential of these growing markets.
Emerging Tourism Markets
Economic Growth and Changing Demographics
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- Economic growth and rising disposable incomes in developing countries are enabling more people to travel domestically and internationally for leisure and business purposes
- The growing middle class in countries like , , and has more discretionary income to spend on travel and tourism
- Younger generations in emerging markets, such as millennials and Gen Z, are prioritizing travel experiences over material possessions
- Changing demographics, such as a growing middle class and a larger proportion of young people in emerging markets, are fueling demand for travel and new tourism experiences
- These demographic shifts are creating new market segments with distinct travel preferences and behaviors
- Hospitality businesses need to adapt their offerings to cater to the needs and desires of these emerging consumer groups (customized packages, )
Infrastructure Improvements and Government Support
- Improved transportation infrastructure, including airports, roads, and rail networks, is making it easier and more affordable for tourists to access emerging destinations
- Governments are investing in the development and expansion of airports, highways, and public transportation systems to accommodate growing tourist arrivals
- Enhanced connectivity is reducing travel times and costs, making emerging destinations more competitive with established tourism markets
- Governments in emerging markets are investing in tourism development and promotion to diversify their economies, create jobs, and earn foreign exchange
- Tourism is seen as a key driver of economic growth and development in many emerging countries (Thailand, Mexico)
- Governments are providing incentives and support for tourism businesses, such as tax breaks, subsidies, and marketing assistance
Technology and Accessibility
- Increased global connectivity and the proliferation of online travel platforms are raising awareness of emerging destinations and facilitating trip planning and booking
- The internet and social media are exposing travelers to new and lesser-known destinations, creating demand for off-the-beaten-path experiences
- Online travel agencies and booking platforms are making it easier for travelers to research, compare, and book travel services in emerging markets (Booking.com, Ctrip)
- The rise of low-cost airlines and budget accommodation options is making travel more accessible and affordable for a wider range of consumers in emerging markets
- Low-cost carriers are expanding their routes and frequencies to emerging destinations, stimulating demand for short-haul and regional travel
- The growth of budget hotels, hostels, and vacation rentals is providing more affordable lodging options for cost-conscious travelers in emerging markets (OYO Rooms, Airbnb)
Tourism Impacts in Emerging Destinations
Economic Benefits and Challenges
- Tourism can contribute significantly to economic growth, job creation, and foreign exchange earnings in emerging destinations, particularly in sectors such as hospitality, transportation, and retail
- The tourism industry creates direct employment opportunities in hotels, restaurants, tour operators, and other service providers
- Tourism also has a multiplier effect, generating indirect jobs in related sectors such as agriculture, construction, and manufacturing
- The development of tourism infrastructure, such as hotels, resorts, and attractions, can stimulate investment and entrepreneurship in local communities
- The construction and operation of tourism facilities can attract foreign and domestic investment, spurring economic development
- Tourism can create opportunities for small businesses and entrepreneurs, such as tour guides, artisans, and food vendors
- However, the economic benefits of tourism may not always be evenly distributed, with some segments of society, such as low-skilled workers and small businesses, potentially being left behind
- The tourism industry may rely heavily on foreign investment and ownership, limiting local participation and control
- The seasonal nature of tourism can create job insecurity and income fluctuations for workers in the industry
Social and Cultural Impacts
- Tourism can have positive social impacts, such as improving living standards, access to education and healthcare, and opportunities for cultural exchange and understanding
- Tourism revenue can be used to fund social programs and infrastructure projects that benefit local communities (schools, hospitals)
- Interactions between tourists and locals can foster cross-cultural understanding and appreciation
- However, if not managed responsibly, tourism growth can lead to negative consequences such as overcrowding, environmental degradation, and the commodification of local cultures
- Popular tourist destinations may experience congestion, noise pollution, and strain on local resources (water, energy)
- The commercialization of cultural heritage and traditions can erode their authenticity and meaning
- The influx of foreign tourists and the development of tourism facilities can sometimes lead to social tensions and the displacement of local communities
- The construction of resorts and other tourism infrastructure may displace local residents or restrict their access to natural resources
- Differences in values, behaviors, and lifestyles between tourists and locals can create social friction and resentment
Opportunities in Emerging Markets
Market Potential and Growth
- Emerging markets represent a significant growth opportunity for hospitality businesses, with a large and growing consumer base and increasing demand for travel and tourism services
- Countries like China, India, and Indonesia have large populations with rising incomes and a growing appetite for travel
- As these economies continue to develop, the potential for tourism growth is immense
- Hospitality companies can benefit from first-mover advantage by establishing a presence in emerging destinations early on and building brand recognition and customer loyalty
- Companies that enter emerging markets early can secure prime locations, build relationships with local partners, and capture market share
- Early entrants can also shape the development of the tourism industry and influence consumer preferences in their favor
Localization and Partnerships
- Adapting products and services to local preferences and cultural norms can help hospitality businesses better serve the needs of customers in emerging markets
- This may involve offering local cuisine options, multilingual staff, and culturally sensitive amenities and programming
- Localization can also extend to marketing and branding efforts, tailoring messages and channels to resonate with local audiences
- Partnering with local suppliers, travel agencies, and tourism boards can help hospitality businesses navigate the unique challenges of operating in emerging markets, such as regulatory hurdles and infrastructure limitations
- Local partners can provide valuable insights into market conditions, consumer behavior, and cultural nuances
- Collaborating with local stakeholders can also help hospitality businesses build trust and credibility with local communities and authorities
Risks and Challenges
- Doing business in emerging markets also comes with risks and challenges, such as political and economic instability, currency fluctuations, and cultural differences
- Emerging markets may be more vulnerable to political upheavals, social unrest, and economic shocks, which can disrupt tourism flows and business operations
- Fluctuations in exchange rates can impact the profitability and competitiveness of hospitality businesses in emerging markets
- Hospitality businesses may face competition from local players who have a better understanding of the market and stronger relationships with key stakeholders
- Local competitors may have lower operating costs, better access to resources, and stronger brand recognition among domestic consumers
- Foreign hospitality companies may need to differentiate themselves through superior service quality, unique offerings, and international brand appeal
Technology's Role in Tourism
Online Travel Platforms and Social Media
- The internet and mobile devices have revolutionized the way travelers research, plan, and book their trips, with online travel agencies and review sites becoming key sources of information and inspiration
- Travelers can compare prices, read reviews, and book accommodations, transportation, and activities through platforms like Expedia, TripAdvisor, and Airbnb
- The rise of and payment solutions is making it easier for travelers to make last-minute bookings and access services on the go
- Social media platforms have become powerful tools for and customer engagement, allowing travelers to share their experiences and influence the travel decisions of others
- Destinations and hospitality businesses can use social media to showcase their offerings, engage with potential visitors, and build brand awareness
- User-generated content, such as photos, videos, and reviews, can serve as authentic and influential marketing material for destinations and businesses
Immersive Technologies and Data Analytics
- Virtual and augmented reality technologies are being used to provide immersive destination experiences and help travelers visualize and plan their trips
- Destinations can create virtual tours and 360-degree videos to give potential visitors a taste of what to expect and entice them to book a trip
- Augmented reality can enhance the on-site experience by providing interactive information and navigation assistance to tourists
- Big data and analytics are enabling tourism businesses to better understand and predict traveler behavior, preferences, and spending patterns
- This information can be used to personalize marketing messages, optimize pricing and inventory management, and improve the overall customer experience
- Predictive analytics can help destinations and businesses anticipate demand fluctuations and allocate resources accordingly
Sharing Economy and Disruptive Models
- The sharing economy, exemplified by platforms like Airbnb and Uber, is disrupting traditional models of accommodation and transportation and changing the way travelers interact with destinations
- These platforms are providing more diverse and affordable options for travelers, particularly in emerging markets where hotel supply may be limited
- The sharing economy is also creating new opportunities for local residents to participate in the tourism industry as hosts, drivers, and experience providers
- However, the growth of the sharing economy has also raised concerns about its impact on local communities, housing markets, and traditional tourism businesses
- The proliferation of short-term rentals through platforms like Airbnb has been linked to housing shortages and rising rents in some destinations
- The sharing economy may also operate outside of traditional regulatory frameworks, creating challenges for authorities in ensuring safety, quality, and fair competition
Key Terms to Review (19)
Brand Equity: Brand equity refers to the value added to a product or service by having a well-known brand name, which can lead to increased customer loyalty, preference, and market share. It encompasses the perceptions and experiences consumers have with a brand, influencing their purchasing decisions and overall relationship with the brand.
Brazil: Brazil is the largest country in South America, known for its diverse culture, rich biodiversity, and vibrant tourism sector. As an emerging global tourism market, Brazil attracts millions of international visitors each year, drawn by its iconic landmarks, festivals, and natural beauty, making it a key player in the evolving landscape of global travel.
China: China is a vast country in East Asia, known for its rich history, cultural heritage, and rapid economic growth. In the context of emerging global tourism markets and trends, China has become one of the largest outbound tourist markets in the world, driven by an expanding middle class and increasing disposable income, leading to a significant impact on global travel dynamics.
Destination marketing: Destination marketing is the process of promoting a specific location to attract visitors and boost tourism, highlighting unique attractions, experiences, and the overall appeal of the destination. This approach focuses on creating a brand for the destination, leveraging its distinct characteristics to differentiate it from others. It ties closely with current trends in tourism, the rise of emerging markets, and principles of experiential marketing that prioritize visitor engagement and memorable experiences.
Experiential travel: Experiential travel is a type of travel focused on immersive and hands-on experiences that allow travelers to engage deeply with the culture, people, and environment of the destination. This approach emphasizes personal growth and connection over simply sightseeing, making it increasingly popular among modern travelers seeking authentic adventures and memorable interactions.
IATA: IATA, or the International Air Transport Association, is a trade association for airlines that represents around 290 airlines worldwide, accounting for approximately 82% of global air traffic. It plays a crucial role in the aviation industry by establishing guidelines and standards for airline operations, enhancing the safety and efficiency of air travel, and facilitating communication among airlines, airports, and travel agents.
India: India is a South Asian country known for its rich cultural heritage, diverse landscapes, and significant impact on global tourism. As one of the fastest-growing economies and emerging markets in the world, India has become a popular destination for travelers seeking historical sites, spiritual experiences, and adventure tourism, thus contributing to the global trends in tourism.
Influencer marketing: Influencer marketing is a form of social media marketing that involves collaborating with influential individuals to promote a brand or product to their followers. This strategy leverages the trust and authority that these influencers have built with their audience, making it an effective way to reach specific target markets and enhance brand visibility.
International visitor spending: International visitor spending refers to the total amount of money spent by foreign travelers when they visit a country. This spending can include various categories such as accommodation, food, transportation, entertainment, and shopping, significantly impacting the economy of the host destination. Understanding international visitor spending is crucial for identifying emerging markets and trends in global tourism, as it highlights areas with growth potential and changing consumer behaviors.
Millennial travelers: Millennial travelers refer to individuals born between 1981 and 1996 who prioritize experiences over material possessions and heavily influence the travel industry with their unique preferences and behaviors. This generation often seeks authentic cultural experiences, values sustainability, and relies on technology for planning and sharing their travel experiences, which impacts consumer behavior and shapes emerging trends in global tourism.
Mobile booking: Mobile booking refers to the process of making reservations for travel services, such as flights, hotels, and car rentals, through mobile devices like smartphones and tablets. This trend has gained traction due to the increasing reliance on mobile technology, offering convenience and flexibility for travelers who want to plan their trips on-the-go. As consumer behavior shifts towards mobile usage, businesses in the travel and hospitality industry are adapting to meet the demands of a tech-savvy customer base.
Purchase decision process: The purchase decision process is a series of steps that consumers go through before making a final purchase decision. This process typically includes stages such as problem recognition, information search, evaluation of alternatives, the purchase itself, and post-purchase evaluation. Understanding this process helps businesses tailor their marketing strategies to influence consumer behavior effectively.
Senior tourism: Senior tourism refers to the segment of the travel market that focuses on catering to the needs and preferences of older adults, typically those aged 60 and above. This demographic is rapidly growing and has unique interests and requirements, such as accessible accommodations, health considerations, and leisure activities that promote social interaction and wellness. As the global population ages, senior tourism is becoming an increasingly important area for travel marketers and businesses to consider.
Social Media Marketing: Social media marketing is the use of social media platforms and websites to promote a product or service. It involves creating content that encourages user engagement and sharing, enhancing brand awareness, and driving traffic to business websites.
Sustainable tourism: Sustainable tourism refers to travel practices that consider the environmental, social, and economic impacts of tourism while promoting conservation, community engagement, and cultural heritage. It emphasizes responsible travel that minimizes negative effects on destinations while enhancing the well-being of local communities and preserving natural resources for future generations.
Tourism growth rate: The tourism growth rate refers to the percentage increase in the number of travelers or revenue generated by the tourism sector over a specific period of time. This metric is crucial for understanding how well the tourism industry is performing and can indicate emerging trends, economic stability, and potential areas for investment.
Travel motivation: Travel motivation refers to the reasons or desires that drive individuals to embark on travel experiences. This concept encompasses various psychological, social, and personal factors that influence a person's decision to travel, including the desire for adventure, relaxation, cultural exploration, and social interaction. Understanding travel motivation is essential for effectively targeting emerging global markets and trends, analyzing marketing case studies, and developing successful marketing strategies.
UNWTO: The UNWTO, or the United Nations World Tourism Organization, is a specialized agency of the United Nations that promotes responsible, sustainable, and universally accessible tourism. It plays a crucial role in shaping global tourism policies and promoting the economic and social benefits of tourism, especially in emerging markets where tourism can drive development and create jobs.
Virtual reality experiences: Virtual reality experiences are immersive digital environments that simulate real-world or imagined settings, allowing users to interact with and explore these spaces through the use of specialized technology. This form of technology enhances travel marketing by providing potential travelers with a unique preview of destinations, accommodations, and attractions, influencing their decision-making processes.