According to the World Travel and Tourism Council, the tourism industry contributes about 10 percent to global GDP and represents the world’s largest employer. While the size of the global travel industry may impress, it’s the growth rate and rapid change in its composition that truly amazes.
Spending on global tourism has significantly outpaced global economic growth over the last decade. Three major forces are driving this expansion: increasing wealth in Asia, increasing curiosity among millennials, and an increasing appetite for authenticity and adventure.
In 1975, 400 million Americans took to the skies alongside just 1 million Chinese. In 2016, 800 million Americans went aloft alongside 400 million Chinese. To put this passenger shift into proper perspective, Americans accounted for 47 percent of all commercial airline seats in 1975, falling to 22 percent today, while the Asian share has risen to 31 percent. In addition to traveling more, Asian travelers spend more. The Chinese alone spent twice as much on international travel last year as Americans and yet, amazingly, only 5 percent of Chinese citizens hold passports! The rise of the Asian traveler will dominate global travel trends for decades.
It’s not just Asian wealth accumulation driving global tourism growth. Within the United States, 47 percent of baby boomers plan to travel this year compared with 64 percent of millennials. Additionally, millennials plan to spend more on travel than their boomer parents and are twice as likely to travel internationally. Millennials within the “gig economy” prefer lifestyles of flexibility and portability, with shorter-term work assignments and on-demand leisure options. They are also the largest generation to date and are just now beginning to hit their peak earnings years.
Finally, destination travel has transformed into adventure travel. The world has become an accessible playground devoid of secrets. Travelers will pay premium rates to swim with whale sharks in the Maldives, track gorillas in Rwanda, or hike the Spanish “Coast of Death.” Why go to Epcot for Oktoberfest when you can go to Munich and pay just a little bit more? Given the size and appetites of the untethered millennial generation, expect travel menus to get even more expensive and exotic over time.
Can we capitalize on these travel trends in Memphis? According to Memphis Tourism (formerly the Convention and Visitors Bureau), the city had more than 11 million visitors last year, 1 million of which were foreign passport holders. Eighty percent of our international visitors (largely from Canada, Australia, and the UK) cited Memphis’ musical heritage as the primary draw. Therefore, packaging Memphis as the gateway for American musical tourism might attract lucrative Asian and millennial travel adventurers.
Imagine Graceland hosting adventurous travel parties for local tours while also coordinating seamless tours, logistics, and lodging packages for America’s other top musical destinations. Memphis could transform from a musical destination to America’s musical concierge. We basically invented America’s music — why not curate it?
David S. Waddell is CEO of Waddell and Associates. He has appeared in The Wall Street Journal, Forbes, Business Week, and other local, national, and global resources. Visit waddellandassociates.com