Leisure Travel: Rising Investments by Governments and Private Players Boosting Industry Growth

Highlights:

• Introduction
• Role of governments and private companies
• M&A deals in the sector

Leisure travel refers to vacation trips made for one’s entertainment, relaxation, recreation, pleasure, and personal enrichment. These trips help individuals take a break from their daily routines and hectic schedules and offer them an opportunity to explore new places, experience diverse cultures, and try out unique things that are generally not part of their everyday lives. Leisure travel is generally done with friends and family, though some people prefer to do it alone. In the last few years, almost all countries have lifted the travel restrictions enacted during the COVID-19 pandemic. This has boosted the demand for leisure tourism services, thus expanding the scope of the industry in recent times.

Growing preference for leisure travel impacting the sector positively

Over the years, governments in developed and developing countries have launched initiatives to boost their regional tourism industry. For instance, many nations have started providing accessible visa facilities to increase the footfall of tourists. Moreover, protecting and restoring historical monuments, preserving important buildings, and promoting local traditions have helped the leisure travel industry grow.

Apart from the policies and schemes announced by governmental agencies, private companies, too, have taken steps to attract tourists and increase the revenue share of the industry. The growing digitalization and the rising penetration of Internet services across the globe have led to businesses developing new mobile apps and websites to help travelers select different destinations, travel packages, and other services based on their budget and preferences. Integration of advanced technologies such as AI and machine learning has enabled companies to design programs that collect data regarding customer preferences, travel patterns, browsing history, etc. The information is then analyzed using machine learning algorithms to provide users with personalized leisure travel packages and options, thus enhancing trust, credibility, and consumer satisfaction in the long run.

Strategic alliances between major players accelerating sectoral growth

The leisure travel industry accounted for $1.2 trillion in 2023 and is predicted to reach a sum of $6.2 trillion by 2033, citing a CAGR of 18.3% during 2024-2033. The various M&A deals signed by leading businesses across the world have contributed to the expansion of the sector in the last few years. For example, in November 2021, Hyatt Hotels Corporation, a multinational hospitality company, issued a press release highlighting the acquisition of Apple Leisure Group®, a luxury resort management business. Hyatt has been one of the biggest companies in the hotel services sector and is operating more than 100 resorts and hotels in over 10 countries. The acquisition helped Hyatt to further add properties in 11 European markets, thus taking the company’s presence in the region to 60%. The business move is anticipated to expand the revenue share of the company significantly in the coming period.

In January 2024, Travel + Leisure Co., an American leisure travel firm, announced that it had signed an agreement to acquire Accor, a leading hospitality company, for US$48.4 million. As part of the deal, Travel + Leisure Co. will merge Accor’s 24 resorts and 30,000 members into its business, thus consolidating its position in the industry. The agreement is predicted to strengthen the foothold in the company in Asia-Pacific and LAMEA regions significantly in the coming period.

In summary, the leisure travel industry is predicted to witness tremendous growth in the coming period, owing to the expansion of the tourism sector in the post-pandemic period. Governmental initiatives and increasing investments by private entities in advanced technologies are estimated to boost the revenue share of the sector in the coming period.

Contact our experts for the latest developments and upcoming trends in the leisure travel industry!

Related Post