Top Trends in Tourism and What They Mean for Your Community

Editor's Note: This article was originally published in Expansion Solutions

Tourism is big business worldwide, and communities of all sizes want in on the action. Understanding the key trends that are reshaping the industry can give your community a boost in transforming from unknown to unequaled.

Tourism Defined

In its broadest sense, tourism is defined as the collection of activities engaged in by visitors to a destination that is located outside of their usual environment. The reasons for a visitor’s travel may consist of those activities most traditionally thought of as tourism-related, such as leisure, a vacation, or visiting friends and relatives, but they may also encompass employment-related travel, attending a convention or conference, or other business reasons. The tourism industry, therefore, can be defined as consisting of any establishments that cater to visitors and directly benefit from visitor expenditure. The Bureau of Economic Analysis divides visitor spending into four main categories:


  • Recreation, Entertainment, and Shopping – performing arts, museums, sporting events, casinos, other  visitor attractions, souvenirs and other retail purchases
  • Accommodations – hotels, motels, resorts, guest houses, RV parks, campgrounds
  • Food Services – quick and full service eating establishments, coffee shops, bars
  • Transportation – air, ground, and water travel; car rental; fuel; parking

Industry Performance

Tourism expenditures in the U.S. reached $1 trillion in 2015, achieving average annual inflation-adjusted growth of 4.3 percent over the last five years. Declining unemployment, increased disposable income, and growing consumer sentiment have contributed to an increase in U.S. travel by both domestic and international travelers. In 2013, the sector surpassed the revenues earned during 2007, its pre-recession peak, and has continued on an upward trajectory. IBISWorld industry analysts forecast 2.9 percent average annual revenue growth over the next five years, driven by increased travel rates, especially by international visitors from East Asia and South America. While domestic travel will increase by 1.6 percent per year, international travel to the U.S. will swell to 4.2 percent as residents of countries such as South Korea, China, Brazil, and Argentina experience upticks in disposable income.

Essentially all major sub-industries within travel and tourism are projected to experience revenue growth over the next five years. Hotels and motels, which raked in $167 billion in revenue in 2015, are expected to see strong growth, especially in specialty categories such as extended-stay accommodations, boutique hotels, spa and health retreats, and resorts, as consumers seek out unique experiences. Collectively, U.S. foreign and domestic airlines account for $223 billion in revenues and will also experience growth as demand for travel rises in tandem with growing discretionary spending. Domestic airlines will see more robust revenue growth as industry consolidation has lowered price competition, while international carriers may experience downward pressure on prices and revenue due to foreign competition.

While travel agencies, including major web-based players Expedia and, have seen healthy growth in recent years, this trend may start to slow as consumers become more comfortable booking their own travel on easy-to-use metasearch platforms such as KAYAK. Growth in this industry will slow from 3.8 percent to 2.3 percent per year. Tour operators will experience a similar slowdown—from 3.2 percent to 2.4 percent—as travelers turn to freely available trip planning resources.

The following table summarizes past and projected revenue growth for a variety of industries that primarily cater to the travel and tourism market.



Trends in Tourism

Whether their visitor pool is international, national, regional, or local, communities across the U.S. are clamoring to attract visitors—and visitor dollars—as part of their economic development strategy. Through the development of visitor attractions and infrastructure, along with marketing and branding efforts, communities are positioning their unique assets in order to appeal to visitors and spur economic growth. While tourism spending is certainly on the rise, tourist destinations still need to compete for a finite amount of visitor dollars. Here are some notable trends in the travel industry for communities wanting to be on the leading edge of the tourism market.

It’s about the journey, not the destination. Experiential travel is gaining ground as a preferred way of exploring new places. In contrast to more traditional vacations, where tourists might book a week at a resort hotel and opt for an itinerary focused around strictly tourist-oriented activities, such as guided tours, museum visits, and theme restaurants catering to the tourist palate, the modern traveler craves a higher level of authenticity to their experience. Leisure is no longer the sole purpose for taking a trip. For many, travel is seen as a way of understanding and appreciating alternative ways of life, learning new things about cultural and natural landscapes, and even as a means of self-discovery. Travelers seek to connect to a destination on an emotional level, and not experience the place as a mere backdrop for activities that could easily be experienced anywhere else. Even the word “tourist” itself has acquired a negative connotation among certain travelers who consider their journey within a place to be much more personal and meaningful than what the typical tourist would experience.

Experiential travel has become mainstream in recent years, with an increasing share of consumers reporting that they would rather spend money on experiences than on things.1 And the travel industry is evolving to capitalize on this trend. Adventure travel has risen in popularity, as travelers seek out activities such as riding rapids, swimming with sharks, and trekking to remote locations. Activities such as language lessons and craft and cooking classes have also become popular. There is a waning focus around checking must-see sites and monuments off the to-do list, and more emphasis on seeking out activities that appeal to niche personal interests.

The sharing economy. The trend toward experiential travel goes hand-in-hand with the rise of the sharing economy. What better way to authentically experience a place than to experience it with a local? Numerous sharing-based travel web platforms and apps have popped up that are geared toward tourists who seek to engage with locals. Well-known lodging platform Airbnb, for example, connects home owners with travelers who are looking for a place to stay, offering both private and shared accommodation options. Couchsurfing also connects travelers with places to stay, but stays are completely free. EatWith and BookaLokal enable users to share a meal at the homes of local cooks. BlaBlaCar is a ridesharing platform that connects people who need to travel with drivers who have empty seats. Vayable bills itself as a way of allowing users to discover and book unique experiences offered by local insiders, such as themed walking tours.

These web-based platforms are giving consumers more choices in all aspects of travel, from transportation and lodging to dining and recreation. For in-demand tourism destinations, these options are often more affordable and flexible. At the same time, for budding destinations located away from the standard tourist circuit, they offer visitor infrastructure that can help to put these places on the proverbial map.

Social media and mobile. Another tech-based travel trend is the use of social media and apps to plan and share trips. Travelers are increasingly using these tools to exchange information, resources, and recommendations. The industry is keen on this trend, leveraging Facebook, Twitter, and Instagram, as well as niche travel platforms like TripAdvisor, to provide exposure to destinations and brands and maintain their relevance. But beyond its promotional aspects, the social media strategy is also focused around creating a forum for interaction between brands and consumers. These platforms provide highly visual and interactive content that tantalizes the potential traveler and allows him/her to engage much more effectively than static advertisements and brochures.2 Moreover, harnessing the power of social influencers—bloggers, vloggers, and other online personalities—through sponsored posts has become a lucrative way of turning consumers on to travel brands.

Social media is being used not only for trip planning, but also as a real-time travel tool. For example, TripAdvisor has developed an app for Apple Watch that includes a feature called “Glances,” which provides users timely recommendations for discovering points of interest based on the person’s GPS coordinates and the time of day. It might suggest a highly-rated nearby restaurant around dinner time, for instance.

Capturing foreign spending power. Foreigner spending accounts for about one-fifth of all visitor spending in the U.S.3 While it is no surprise that Canada, given its close proximity and cultural ties to the U.S., has continued to occupy the top position in terms of visitor spending, China has been quickly gaining ground. In 2014, China accounted for 10.9 percent of foreign visitor spending, with Chinese visitors spending $24.0 billion, up 14 percent from the previous year. The two other countries in the top 10 with double-digit spending growth are also in Asia: South Korea (11 percent growth) and India (10 percent).4

Supporting Tourism Locally

With business booming in the travel trade, it makes economic sense to invest in tourism. In addition to the direct benefits that local businesses receive, there can be significant multiplier effects as those businesses and their employees make additional purchases locally. The influx of revenue that occurs as a result of visitor spending can be reinvested to make the community a better place for local residents. Moreover, improvements in quality of life for local residents as a result of tourism investment can help to make a community more attractive to other industries.

Here are some ways that communities can leverage the big trends in the industry:

  • Develop attractions that highlight the unique cultural or natural aspects and allow visitors to experience the place in a way that is more meaningful than simple sightseeing.
  •  Support the growth of the sharing economy to exploit existing capacity and resources—formal tourism infrastructure can then be built on this foundation.
  • Market and promote through social media, appealing to tech-savvy travelers who rely on online recommendations and reviews to make destination decisions.
  • Finally, figure out how your community might cater to the foreign market.

[1] Peak + Skift. “The Rise of Experiential Travel.”

[2] Spring O’Brien. “Social Media Trends for the Travel Industry”

[3] World Travel & Tourism Council. “Travel & Tourism: Economic Impact 2015. United States of America.”

[4] U.S. Department of Commerce National Travel and Tourism Office.

[5] Visit California. China Ready Toolkit.

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