The urban tourism market has seen significant growth in the past decade owing to increasing inclination of millennials and Generation Z towards unconventional travel experiences. Urban tourism involves traveling to cities, towns and other urban areas for non-business purposes including sightseeing, cultural events, shopping and food experiences amongst others. Rapid urbanization in developing economies has resulted in improved infrastructure and connectivity in urban centers making them ideal destinations for short trips and experiences. Furthermore, growing middle class population and increasing disposable income has enabled more people to afford domestic urban travel.
The Global Urban Tourism Market is estimated to be valued at US$ 10.56 TN in 2024 and is expected to exhibit a CAGR of 6.1% over the forecast period 2024 to 2031.
Key Takeaways
Key players operating in the urban tourism market are URBAN TOUR, Intrepid Urban Adventures, MakeMyTrip, Yatra, ClearTrip, EasemyTrip, Expedia, Thomas Cook, Riya Group, Thrillophilia, Travel Troops Global Private Ltd., Flying Squirrel Holidays, SOTC Travel Limited, G Adventures, Hays Travel, Audley Travel, Go Travel, TransIndus, Travelex, Al Tayer Group. These players are focusing on expanding their experience portfolio and strengthening their online presence to tap the growing demand from urban travelers.
The Urban Tourism Market Trends provides significant opportunities for experience providers to develop unique activity packages around street art, local cuisine, nightlife, heritage walks and popup cultural events. Cities are also investing in developing their public infrastructure and spaces to encourage longer visit durations. For instance, redevelopment of urban waterfronts and parks provides areas for outdoor recreational activities.
With rising global affluence, many international tourists are looking to experience the culture and way of life in foreign cities. Key destinations such as London, Paris, New York, Tokyo and Singapore are witnessing steady growth in overnight visitors. Travel operators are expanding their international footprint and collaborating with local players to provide seamless travel services across multiple urban destinations.
Market Drivers
Growing young working population with increasing spending power on leisure and experiences is a key driver propelling urban travel growth. Exposure to social media further inspires young domestic tourists to explore within their own cities and nearby urban centers.
Market Restrain
Shortage of accommodation infrastructure in many small and mid-sized cities acts as a restraint for tourist inflows. Limited availability of budget and unique stay options makes multi-day urban trips challenging. Additionally, issues of last mile connectivity and limited multi-lingual assistance affects the overall tourism experience.
Segment Analysis
The urban tourism market is dominated by the solo traveler sub-segment. An increasing number of people, especially millennials, prefer traveling independently as it allows flexibility in planning and experiencing destinations at their own pace without being confined to group schedules. The concept of solo travel gives an opportunity to explore new places and cultures independently while also interacting with locals. The solo travel sub-segment caters to this rising demand and trend of independent exploration among urban tourists.
The religious tourism sub-segment is another rapidly growing segment in the urban tourism market. Many cities across regions have emerged as prominent religious destinations and attract pilgrims throughout the year. For example, several cities in India receive millions of domestic and international tourists visiting religious sites and participating in festivals. The development of religious infrastructure as well as innovative tours and packages tailored for spiritual travelers has boosted the religious tourism segment.
Global Analysis
The Asia Pacific region currently dominates the global urban tourism market supported by rapid growth of domestic tourism within countries like India, China, and ASEAN nations. Cities like Bangkok, Tokyo, Delhi, and Shanghai receive enormous tourist inflows throughout the year. Majority of the tourism is driven by domestic visitors exploring various cities within their national boundaries. Besides, many destinations in the region have emerged as popular wedding and film shooting locations attracting leisure visitors globally.
Europe stands as the second largest urban tourism market led by countries like France and Italy. Cities of Western Europe especially London, Paris, Rome, Barcelona amongst others are top urban destinations worldwide. Increasing investments into urban developments, art, culture, and heritage tourism are factors driving regional urban tourism growth.
North America is witnessing steady expansion owing to rising popularity of short city breaks and cultural city tours especially in the US and Canada. Cities like New York, Los Angeles, Toronto attract global visitors for their diverse culture, entertainment and lifestyle.
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