India Redefining Leisure Tourism : Rising middle class joins the $15 trillion global travel opportunity

Emerging markets like India are driving a global leisure travel surge, with spending expected to triple from $5 trillion in 2024 to $15 trillion by 2040, per a Boston Consulting Group report. Growth is fueled by a rising middle class, younger demographics, and a preference for experiences. India’s Millennials and Gen-Zers are leading this trend alongside China and Saudi Arabia. Travel motivations are expanding, including wellness and food tourism. Despite global uncertainties, the industry remains resilient, reflecting humanity’s deep-rooted wanderlust.

 As global trends evolve, the leisure travel industry is poised for a transformative surge, with emerging markets like India playing a pivotal role. A recent report from the Boston Consulting Group (BCG) highlights this seismic shift, predicting that global consumer spending on leisure travel will triple from $5 trillion in 2024 to a staggering $15 trillion by 2040. This growth positions leisure travel as a larger economic sector than even the pharmaceutical and fashion industries.

The Drivers of Growth

BCG’s insights, derived from a survey of nearly 5,000 travelers, reveal several factors fueling this expansion. A growing preference for experiences over material possessions, coupled with the rise of a robust middle class in developing nations, is reshaping global travel patterns.

Lara Koslow, a senior partner at BCG and co-author of the report, emphasized the significance of emerging markets in this transformation. During an interview with Bloomberg, Koslow likened the current middle-class growth in countries like India, China, and Saudi Arabia to the development of resort culture in the United States during its economic boom.

China, in particular, is projected to lead global leisure travel spending, with annual growth exceeding 10%. Alongside China, countries such as India, Saudi Arabia, Bulgaria, and Cambodia are witnessing a surge in their populations’ inclination to travel for leisure, driven by rising disposable incomes and a thirst for exploration.

India’s Role in the Global Travel Boom

India's travel sector has rebounded strongly from the disruptions caused by COVID-19, with moderate to robust growth in leisure travel spending between 2019 and 2024. This momentum is expected to persist, with projected annual increases of 3% in domestic overnights, 4% in regional travel, and 6% in international trips.

Spending trends are equally promising. Domestic travel expenditure is anticipated to grow by 12% annually, while regional and international travel spending are forecast to rise by 8% and 10%, respectively.

India’s younger generations, particularly Millennials and Gen-Zers, are at the forefront of this trend. Globally, these cohorts are the most influential in shaping travel patterns, with their planned trips outpacing older generations by a significant margin. Known for being tech-savvy, socially conscious, and highly engaged online, they are driving demand for unique and meaningful travel experiences.

Interestingly, in contrast to developed economies, Gen-Xers in India and China remain a vital segment of the travel market, underscoring the diverse demographic dynamics of these regions.

Religious travel also stands out as a prominent niche, with Indian travelers, along with those from Nigeria and Saudi Arabia, frequently undertaking pilgrimages and spiritual journeys.

A Global Perspective on Travel Trends

On a broader scale, global leisure travel is expected to grow at an annual rate of 4% between 2024 and 2029, before tapering to 3% annually from 2029 to 2040. Spending on leisure travel is predicted to rise by 8% per year through 2029 and 7% annually through 2040.

Domestic travel remains the cornerstone of this growth, with its value projected to climb from $4.1 trillion in 2024 to $11.7 trillion by 2040. Regional and international travel are also set to expand significantly, with international travel expenditure expected to triple, reaching approximately $1.4 trillion by 2040.

BCG’s report highlights a fascinating trend among emerging market travelers—70% incorporate leisure components into their work trips, a practice far less common in the United States.

Shifting Preferences and Motivations

While traditional destinations such as beaches, nature spots, and cities remain popular, travelers are increasingly seeking curated, purpose-driven experiences. Wellness retreats, spiritual journeys, and holistic health resorts are gaining traction, reflecting a growing desire for meaningful and lifestyle-aligned travel experiences.

Food tourism is also on the rise, particularly in Asia. Travelers from countries like China, Vietnam, and Indonesia are planning entire itineraries around culinary experiences, ranging from Michelin-starred establishments to vibrant street food scenes.

Despite these emerging preferences, conventional leisure activities—such as relaxing on beaches, snorkeling, and golfing—continue to hold their appeal, particularly among high-spending and solo travelers.

Resilience Amid Uncertainty

Quantifying the travel industry’s economic impact is complex, with estimates often including indirect effects such as hospitality employment and restaurant spending. The World Travel & Tourism Council (WTTC) predicts that the sector will contribute $11.7 trillion, or 10.3% of global GDP, by the end of 2024.

However, external risks like geopolitical conflicts, trade wars, and immigration restrictions could temper growth in certain regions. While some organizations have adjusted their projections downward, BCG remains optimistic, viewing such factors as uncertainties rather than definitive barriers.

Koslow noted that the resilience of the travel industry is a testament to the enduring human desire for exploration. Even amid economic volatility, consumers continue to prioritize travel, with many opting for spontaneous, last-minute trips.

The Universal Allure of Travel

Ultimately, wanderlust appears to be an intrinsic human trait. As more people in emerging markets gain the means to explore new geographies and cultures, the global travel industry is set to flourish. BCG’s report underscores this sentiment, stating, “It’s baked into our DNA.”

With India and other emerging markets leading the charge, the future of leisure travel promises to be dynamic, diverse, and deeply transformative.