Tourism Market Expected to Behold a CAGR of 15.7% through 2020-2027

The Global Adventure Tourism Market was valued at USD 846.40 billion in 2020, and is projected to reach $1,756.75 billion in 2027, registering a CAGR of 15.7% from 2021 to 2027. The development of the travel and tourism sector fosters the growth for adventure tourism market demand. Travel spend has grown steadily across the world, especially in Asia Pacific, the Middle East, and Latin America. A key contributing factor to the market expansion is a growing middle class in many large markets with more spending power and interest in travel due to social media.

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Tourism is travel for pleasure or business; also, the theory and practice of touring, the business of attracting, accommodating, and entertaining tourists, and the business of operating tours. The World Tourism Organization defines tourism more generally, in terms which go “”beyond the common perception of tourism as being limited to holiday activity only””, as people “”traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure and not less than 24 hours, business and other purposes””.

Adventure tourism refers travel or exploring with a certain amount of risk faced during the vacation. Adventure tourism involves some of the activities such as climbing, hiking, caving, rafting, and others. Tourism is one of the most exponentially growing sectors, among which adventure tourism is one of its fastest growing segments. According to travel market survey, Europe and America are the two leadings regions in this market. Furthermore, adventure tourism includes simulators and virtual environments. Active stakeholders in the industry are continuously innovating to provide better consumer experience and also focusing on increasing the consumer stay. Moreover, the introduction of artificial intelligence plays a vital role in the functioning and operating of adventure tourism.

The major key players include: Austin Adventures, Inc., G Adventures Inc., Mountain Travel Sobek, TUI AG., ROW Adventures, REI Adventures, InnerAsia Travel Group, Inc., Intrepid Group Limited, Butterfield & Robinson Management Services, Inc., and Abercrombie & Kent Group of Companies S.A.

Analyst Commentary

Adventure tourism refers travel or exploring with a certain amount of risk faced during the vacation. Adventure tourism involves some of the activities such as climbing, hiking, caving, rafting, and others. Tourism is one of the most exponentially growing sectors, among which adventure tourism is one of its fastest growing segments. According to travel market survey, Europe and America are the two leadings regions in this market. Furthermore, adventure tourism includes simulators and virtual environments. Active stakeholders in the industry are continuously innovating to provide better consumer experience and also focusing on increasing the consumer stay. Moreover, the introduction of artificial intelligence plays a vital role in the functioning and operating of adventure tourism.

Over the past few years, the adventure tourism industry has grown exponentially, globally. Furthermore, travellers are interested to visit undiscovered destinations for enjoyment. In addition, significant increase in government initiatives in the form of private and public partnership to promote tourism fuels the growth of the global adventure tourism market. However, risk involved in unpredictable weather condition and adventure travelling restricts the adventure tourism market growth. Moreover, increase in trend of social media is anticipated to provide lucrative opportunity for the market growth, as Facebook has become the preferred social networking site among travellers to get the best travel deals.

Improvement in economic condition and growth in disposable income are significant factors that propel the growth of adventure tourism market. After the 2009 economic crisis in Europe and the economic crisis in China, the world economy witnessed a standstill. However, strong recovery from the crisis resulted in notable economic growth, especially in the developing economies, and has led to increase in disposable income among the middle-income groups. In addition, disposable income of individuals in North America and the Asia-Pacific has witnessed a high growth rate, thus acting as a major driver for the market, as medium- and high-income consumers in urban areas are shifting their consumption trend from essential to premium goods & services. This trend favours the adventure tourism to enhance the service offering in various adventure activities.

Across the globe, rise in middle class population, rise in travels by millennial population compared to other generations, increased awareness among youth about travel destinations with growth in social networks, and decrease in cost of air travel are increasing the number of people travelling across the globe Rise in number of international travel departures across the world and leisure travel is driving the global travel & tourism market. As per World Bank, the number of international travel departures increased from 633.4 million in 1995 to 1.57 billion in 2017 increasing at a CAGR of 4.2% from 1995 till 2017. In 2016, globally as per WTTC, about 76.8% of travel revenue was generated from leisure travel and 23.2% of the revenue was generated from business travel. Rise in the number of leisure travellers across the world is increasing the market size of the travel and tourism industry. Thus, rise in number of international travel departures, rise in leisure travel, and rise in disposable income and travel promotions by international bodies such as United Nations World Tourism Organization (UNWTO) is increasing the market size of the travel and tourism industry.

Segmentation

The global tourism market is segmented on the basis of type, industry products, activities involved and geography. On the basis of type, international tourism and domestic/local tourism are the two major types of tourism market. Along with it, on the basis of purpose of travel or tourism the market for global tourism is segmented into adventure tourism, leisure business travel, conference or seminar travel, business tourism, visiting relatives and friends. The companies providing tourism services offer various products and services to their customer. Thus, the industry products included in the global tourism industry are traveller accommodations, travel arrangement and reservations, air transportation, other local transport such as car rental, food and beverage establishments, recreation and entertainment, gasoline and other retail activities. Further, the industry activities considered within the global tourism market include traveller accommodation services, providing hospitality services to international tourists, airline operation, automotive rental, travel agent and tour arrangement services. Countries such as U.S., Germany and France are popular destinations for global tourism; but in recent years other less well known countries from Asia and Africa have emerged as destinations of interest for international travellers. Thus, tourism service providers are realigning their services in order to reap the economic benefits from this trend.

The study provides a conclusive view of the global travel & tourism market by segmenting it in terms of travel days, travel type, and application. In terms of travel days, the global travel & tourism market has been classified into within 7 days, 7-15 days, and more than 15 days. In terms of travel type, the market has been segmented into leisure spending and business spending. In terms of application, the market is segmented into domestic spending and international spending.

The study further analysis the Y-O-Y Growth, demand & supply and forecast future opportunity in North America (United States, Canada), Latin America (Brazil, Mexico, Argentina, Rest of LATAM), Europe (U.K., Germany, France, Italy, Spain, Hungary, BENELUX (Belgium, Netherlands, Luxembourg), NORDIC (Norway, Denmark, Sweden, Finland), Poland, Russia, Rest of Europe), Asia-Pacific (China, India, Japan, South Korea, Malaysia, Indonesia, Taiwan, Hong Kong, Australia, New Zealand, Rest of Asia-Pacific), Middle East and Africa (Israel, GCC (Saudi Arabia, UAE, Bahrain, Kuwait, Qatar, Oman), North Africa, South Africa, Rest of Middle East and Africa).

Regional Analysis

Asia-Pacific is growing at a highest rate, as the Asia-Pacific adventure market is attracting various adventure travellers around the globe. Furthermore, tourist arrival and receipts are anticipated to increase, in this region as compared to any other region, which is expected to supplement the market growth. This region offers numerous diverse regions to explore, such as various national parks and wildlife reserves such as Mt. Everest in Nepal, rain forests in Borneo, Sundarbans in India, and whale watching and scouting kiwis in New Zealand. Moreover, increase in competition, reduced travel restrictions, economic growth, and aggressive promotion strategies are adopted by the regional tourism organizations, which directly contribute to the growth of the adventure tourism market size in this region.

Europe tourism industry is the largest in the world accounting for 51% of share in 2015. Europe tourism industry is spiked by increase in number of international tourists in France, Spain, Italy, Germany and the U.K. The revenue generated from tourist travel in the U.K. accounted for USD 142.0 Billion in 2015. North America travel and tourism industry accounted for USD 1,412 Billion in 2015.With USD 1,218 Billion of revenues in 2015, the U.S. is the largest travel and tourism market in North America followed by Canada with USD 98.2 Billion. The U.S. tourism market is further anticipated to witness a robust CAGR during the forecast period. Asia-Pacific tourism industry accounts to witness the highest growth over the forecast period i.e. 2016-2026. The tourism market in Asia-Pacific is likely to get propelled from strengthening economy, rise in disposable income and increasing infrastructural developments in some of the major countries such as India, China, Japan and Singapore. Backed up by these factors, Asia-Pacific region is projected to attract over 502+ million visitors by 2027.

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