The size of the worldwide tourism source market, which was estimated at $599.4 billion in 2022, is expected to rise to $1.1 trillion by 2029, with a compound annual growth rate (CAGR) of 6.8% from 2023 to 2029.

Tourism refers to the act of traveling to different destinations for the purposes of leisure, recreation, or business. It encompasses the exploration of various locations, points of interest, and cultural landmarks beyond one's usual environment. Tourism offers a wide range of activities, including sightseeing, the exploration of natural landscapes, engagement in adventure sports, cultural immersion, attendance at local events, or simply relaxing at resorts and vacation spots.

The growth in outbound tourism can be attributed to several factors. Globalization of media and the internet has exposed individuals to diverse cultures, traditions, and lifestyles worldwide, fostering an increased interest in exploring these differences. Additionally, the accessibility of travel has expanded due to the emergence of low-cost airlines and budget-friendly options like package deals and affordable accommodations. These factors have made travel more attainable for a broader spectrum of people, thus contributing to the rise in outbound tourism. Furthermore, the culture of recreational activities plays a significant role, as people are drawn to various destinations to engage in a wide array of enticing pursuits.

Adventure activities such as hiking, trekking, scuba diving, and skiing have become popular attractions, luring tourists to destinations renowned for offering these experiences and further stimulating the outbound tourism sector. Another noteworthy trend is wellness and spa tourism, which attracts travelers to locations celebrated for their breathtaking natural landscapes, hot springs, and wellness retreats. This niche industry promotes outbound travel as individuals seek restorative and self-care experiences.

Moreover, the desire to immerse oneself in different cultures, traditions, festivals, and historical sites is a driving force for many travelers. They venture to distant countries or explore various regions within their own nation to partake in local customs and heritage, thereby bolstering the outbound tourism industry.

Furthermore, governments worldwide have implemented various strategies and policies to foster growth in tourism source markets, with a particular focus on sustainable and inclusive development. These initiatives aim to create a conducive environment for tourism businesses, enhance infrastructure, preserve natural and cultural assets, and bolster the overall competitiveness of the tourism sector.

Recognizing the importance of sustainable tourism for long-term success, governments have introduced regulations to encourage environmentally and socially responsible practices within the tourism industry. These regulations support the adoption of sustainable practices, including minimizing environmental impact, assisting local communities, and safeguarding cultural heritage.

To enhance connectivity and accessibility, essential for attracting tourists from tourism source markets, governments are investing in infrastructure development. This involves the construction of tourist accommodations, expansion of airports, modernization of highways, and improvements to transit networks. The goal is to facilitate travel for tourists and provide them with a comfortable and convenient journey through infrastructure enhancements.

Governments actively promote their destinations to source markets through marketing campaigns, collaborating with tourism boards, travel organizations, and industry stakeholders. These efforts aim to showcase the unique attractions and experiences their nations have to offer. Marketing endeavors, participation in international travel fairs, and internet marketing techniques are employed to raise awareness and attract tourists from source markets.

In the tourism industry, small and medium-sized businesses (SMEs) play a vital role. To support the growth of SMEs, governments provide financial incentives and policy support. This includes improving access to finance, offering training and capacity-building programs, and encouraging collaboration between SMEs and larger tourism enterprises. Such support fosters entrepreneurship and diversifies the tourism industry.

However, challenges persist in the proliferation of ecotourism, particularly in developing and underdeveloped countries. These challenges include insufficient support infrastructure, such as limited air, rail, or road connectivity to ecotourism destinations. Additionally, the limited availability of quality and hygienic restaurants, food outlets, and accommodations at these destinations hinders ecotourism's growth, especially in developing regions. The monopoly of a few tourist guides, along with the scarcity of certified and trained guides, raises concerns about the exploitation of tourists.

In 2023, the tourism sector may face certain limitations. The challenging economic environment is a primary factor restraining the expansion of the tourism market. Economic uncertainty is expected to prompt tourists to opt for destinations closer to home, even though some regions may witness a return to pre-pandemic international arrival levels. Factors such as economic slowdown, Asia and the Pacific's rebound, and geopolitical issues like the Russia-Ukraine conflict could impact the extent of foreign visitor growth in 2023. Nevertheless, despite these challenges, the tourism source industry is anticipated to have a resilient year overall.

The demand for tourist services has witnessed a substantial increase due to the growing desire among travelers to explore new destinations, both domestically and internationally, and engage in recreational activities. Consequently, there is an expected surge in demand within the Tourism Source Market during the forecast period.

This trend is evidenced by the increased interest in visiting national parks, historical sites, and cultural events, reflecting a rising enthusiasm for discovering lesser-known and off-the-beaten-path experiences such as ecotourism, adventure tourism, and cultural immersion activities. In response, various tourism-related products and services have emerged to cater to these niche markets, contributing to the growth of the tourism sector. Additionally, the widespread use of social media has simplified the sharing of travel experiences, inspiring others to embark on similar journeys.

The tourism industry offers numerous market opportunities across various sectors. As of 2021, the travel and tourism sector made a substantial contribution to the global GDP, accounting for 10.4% of the total. Tourism has the potential to generate productive and inclusive employment, promote economic empowerment, and play a role in preserving natural and cultural heritage. Furthermore, the tourism market has displayed growth and is poised for further expansion in the years ahead.

One notable market opportunity in the tourism industry is domestic tourism. The COVID-19 pandemic has significantly impacted international travel, leading to the emergence of domestic tourism as a viable alternative. Domestic tourism entails travel within one's own country for leisure, business, or other purposes.

Segmental Overview

The tourism source market is segmented based on booking channels, tourist types, and regions. Regarding booking channels, it includes websites, mobile applications, travel agencies, and other platforms. Tourist types encompass solo travelers, group travelers, and other categories. Regionally, the market is divided into North America (comprising the U.S., Canada, and Mexico), Europe (including the UK, Germany, France, Italy, Spain, Russia, Sweden, Netherlands, Denmark, Poland, and Rest of Europe), Asia-Pacific (encompassing China, Japan, India, Australia, South Korea, Thailand, Malaysia, Singapore, Indonesia, New Zealand, and Rest of Asia-Pacific), and LAMEA (covering Brazil, Argentina, South Africa, Saudi Arabia, Egypt, UAE, and Rest of LAMEA).

In terms of booking channels, the mobile application segment emerged as the dominant player in the Tourism Source Market Share for the year 2022 and is expected to maintain its leadership position throughout the forecast period. The proliferation of smartphones and other mobile devices, coupled with advancements in mobile technology and the availability of online travel booking platforms, has fueled the preference for booking via applications in the Tourism Source Market. Many tourism service providers have developed user-friendly mobile apps that facilitate seamless browsing and booking of travel services. Furthermore, these apps often offer additional conveniences, such as personalized recommendations, real-time notifications, and in-app assistance.

By Tourist Type

Regarding tourist types, the group segment took center stage in the global market in 2022 and is expected to maintain its dominance throughout the forecast period. Customized experiences are driving significant growth in the source tourism industry, particularly for group travelers. These tailored tours cater to the unique interests and preferences of group travelers, offering them personalized travel adventures where they can design their own itineraries, activities, and accommodations. This approach results in immersive and satisfying journeys that also meet the collective needs of the group.

Furthermore, customized experiences are expanding the source tourism market by attracting new visitor demographics seeking specialized and unconventional travel adventures. Customized group excursions can focus on specific interests such as wine tasting, cultural heritage, or adventure sports, appealing to travelers looking for exclusive and distinctive experiences. This emphasis on tailored experiences sets certain tour providers apart in the competitive market.

Regarding regions, Europe took the lead in the global market in 2022 and is poised to maintain its dominant position throughout the forecast period. Europe's well-established transportation infrastructure, including extensive air connectivity and efficient rail networks, makes a wide range of destinations easily accessible to travelers. European tourists have a plethora of options for both domestic and international travel, given the diverse landscapes, historical landmarks, cultural attractions, and leisure activities available across the continent.

Europe exhibits distinctive travel patterns characterized by peak seasons during the summer and holidays like Christmas and Easter when many Europeans use their leisure time to explore various destinations. However, off-peak travel is gaining popularity as travelers seek to avoid crowds and take advantage of cost savings. Additionally, European tourists have shown a strong interest in long-distance destinations in Asia, Africa, and the Americas, further driving the growth of the source tourism industry in Europe.

Tourism Source Market Report Highlights

Analyst Review

The past few years have witnessed notable shifts in global Tourism Source Market Demand trends, largely influenced by ongoing travel restrictions and pandemic-related concerns, which have affected traveler confidence. As identified by the UNWTO Panel of Experts, key trends driving the recovery of the Travel and Tourism (T&T) sector include an increased focus on domestic tourism, travel to nearby destinations, engagement in outdoor activities, the popularity of nature-based offerings, and the growth of rural tourism.

Data from the World Travel and Tourism Council (WTTC) reveals that, on average, in the 117 economies covered by the index, the share of domestic spending in T&T expenditures rose from 50.8% in 2019 to 62.6% in 2020. This shift reflects the resilience of domestic demand in contrast to the sharp decline in international demand. Projections for 2021 indicate that domestic spending is expected to experience substantial growth, outpacing international spending across regions, with the exception of the Caribbean and Middle East.

However, the proliferation of ecotourism faces significant challenges, particularly in developing and underdeveloped countries, where there is inadequate support infrastructure. Insufficient air, rail, and road connectivity to various ecotourism destinations hampers accessibility. Additionally, the limited availability of accommodations and a lack of quality and hygienic dining options and hotels in these areas hinder the growth of ecotourism, especially in developing regions. The dominance of a few tourist guides and the scarcity of certified and trained guides also increase the risk of exploitation of tourists.

The Tourism Source Market presents an opportunity to revitalize and diversify travel experiences, stimulate local economic development, involve various professional sectors, and repurpose primary sector activities. Tourism contributes to destination promotion and branding, the preservation of local traditions and diversity, and the celebration and rewarding of authenticity. Consequently, the rich cultural heritage at local and regional levels offers lucrative opportunities for the expansion of the tourism source market.