India's rising middle class joins the $15 trillion global travel opportunity
Boston Consulting Group
(BCG). The study estimates that annual global consumer spending on leisure travel will triple from $5 trillion in 2024 to $15 trillion in 2040, making it larger than the pharmaceutical and fashion industries.
BCG's global review of leisure travel is based on a survey of nearly 5,000 travellers. It finds that the increase in travel spending is being driven by multiple factors, including a growing emphasis on experiences over material goods, and the emergence of a large middle class in several developing countries.
'Emerging markets are really going to drive significant growth, countries like China, India and Saudi Arabia,' said Lara Koslow, senior partner at BCG and one of the authors of the report. In an interview with Bloomberg, Koslow said the expansion of the middle class in these regions is giving rise to a new group of leisure travellers, similar to how middle-class growth in the United States once led to the development of a resort culture there.
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According to BCG, China is on track to become the country with the highest spending on leisure travel, with expenditure expected to rise by more than 10% a year. Other countries contributing to this trend include India, Saudi Arabia, Bulgaria and Cambodia, as their residents increasingly travel for leisure.
Travel demand is also becoming younger and more digitally engaged. Companies across the travel value chain are being advised to understand and welcome new travellers, even as they continue serving traditional ones.
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India's travel growth patterns
The report says that India experienced moderate to strong growth in leisure travel spending between 2019 and 2024, suggesting a fast recovery from COVID-19 impacts. BCG expects this momentum to continue.
According to the projections, domestic, regional and international overnights for Indian travellers will grow annually by 3%, 4%, and 6% respectively. In terms of expenditure, domestic spending is forecast to increase by 12% per year, regional by 8%, and international by 10%.
Younger Indian generations are particularly interested in travelling more and spending more. Globally, Millennials and Gen-Zers are the most influential travellers, with their share of planned trip increases outpacing older generations by 4 to 26 percentage points. These cohorts are described as mobile-savvy, socially conscious, and highly engaged online.
In India and China, Gen-Xers also remain an important market segment, especially when compared to their diminishing role in developed economies.
The report also identifies religious travel as a niche category that is more prominent among travellers from India, Nigeria and Saudi Arabia.
Global growth projections
From 2024 to 2029, leisure travel measured in overnights is expected to grow by about 4% annually, slowing to 3% a year between 2029 and 2040. The bulk of these overnights will be domestic, followed by regional travel.
Spending, too, will rise. Leisure travel expenditure is projected to grow by 8% per year through 2029, then by 7% annually through 2040.
Domestic leisure travel in 2024 is valued at $4.1 trillion, driven by nearly 13 billion overnights. This is expected to reach $11.7 trillion and about 18 billion overnights by 2040.
Regional travel is expected to grow from $710 billion (over 3 billion overnights) in 2024 to just over $2 trillion (7 billion overnights) by 2040.
International leisure travel is projected to more than triple, from $425 billion (almost 2 billion overnights) in 2024 to approximately $1.4 trillion (5 billion overnights) in 2040.
Koslow said, 'We all know that leisure travel is on the rise and that trend has been going on for a while.' But she added that she was surprised to find that 70% of emerging market travellers add a leisure component to their work trips, a practice far less common in the US.
Destinations and motivators
Leisure travellers continue to seek out traditional favourites—beaches, nature, and cities. These remain the top three destination types, especially for high-spending travellers and solo travellers, the latter showing a slight preference for cities.
However, newer preferences are emerging. Travellers are now also drawn to curated, purpose-driven experiences, such as wellness retreats, spiritual travel, and holistic health resorts. The report includes examples like destination marketing in Qatar and Qiddiya.
The motivations for travel are broadening. While relaxation, escape, exploration, outdoor activity, and visiting friends and relatives remain dominant, people are increasingly seeking experiences that align with their lifestyles. The report says, 'Travelers today seek meaning, convenience, and experiences that align with their lifestyles.' But traditional leisure staples like 'beach chairs, cabanas, snorkeling, [and] golf courses' are not going away.
Across all markets, the most common reasons to travel remain relaxing and spending quality time with loved ones.
One specific trend is the rise of food tourism, particularly in Asia. Travellers from China, Vietnam and Indonesia now often rank food as a top reason for travel. They plan entire itineraries around food, including Michelin-starred restaurants and street food tours. In Western markets, food travel exists too, but tends to be secondary to traditional motivations like relaxation.
External risks and long-term outlook
Quantifying the travel industry is complex. Like the World Travel & Tourism Council (WTTC), BCG includes a wide range of spending—from restaurant bills to the indirect effects of hospitality employment. WTTC estimated in April that the travel sector would reach $11.7 trillion, or 10.3% of global GDP, by the end of 2024.
However, BCG's estimates do not account for potential impacts from trade wars, geopolitical conflicts, or immigration restrictions, particularly in relation to travel to and from the United States.
Some forecasts from other organisations have adjusted expectations downward due to these concerns, but BCG has not altered its projections. Koslow described such developments as 'very unclear' and said their mid- to long-term implications for leisure travel remain to be seen.
Despite global uncertainty, Koslow said the travel industry has shown resilience. The WTTC shares that view. Many consumers, the report says, are continuing to travel—and even book last-minute trips—in spite of economic volatility.
BCG said that wanderlust remains a global motivator. 'It's baked into our DNA,' the report says. As more consumers across emerging markets find themselves able to explore, the desire to experience new geographies and cultures is only expected to grow.
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