Travel experiences are poised to outpace sales of every segment of travel by 2029, reaching $342 billion annually, according to data from Arival and Phocuswright.
The two research firms released a report Wednesday detailing the outlook of travel experiences from 2019 to 2029. According to the report, the segment is expected to see a major growth spurt as consumers prioritize experiences in their travels. (Phocuswright is owned by Northstar Travel Group, Travel Weekly's parent company.)
"This year's data tells a maturity story, one defined by change, digital saturation and entirely new demand patterns," said Pete Comeau, the managing director of Phocuswright.
According to the Phocuswright and Arival research, OTAs are expected to increase their bookings more than fivefold, from under $8 billion in 2019 to more than $40 billion in 2029. Part of the accelerated growth of experiences is being led by online marketplaces, such as Airbnb, Viator and Get Your Guide, they said.
On the other hand, the report found that just 33% of bookings are made online, lagging the rest of the travel industry.
But even though the online options for booking experiences has not yet matured -- offline booking reigns supreme -- the report found that online sales are projected to capture 43% of the market by 2029, meaning companies have a huge opportunity to develop the online platforms and technology to support this segment of the industry.
The definition of travel 'experiences'
"Experiences" is a broad term, encompassing day tours, activities and attractions. The growth is driven by both a change in consumer behavior, as travelers increasingly prioritize experiences over than physical purchases, and the ease in online booking, representing a tremendous opportunity for the industry, according to the report.
"For years, experiences were called travel's last untapped opportunity, but this report marks a turning point," Arival CEO and cofounder Douglas Quinby said. "The sector has not only recovered; it is now the fastest-growing segment of travel, reshaping how people choose where to go and why."
The report found that 90% of travelers participate in activities while on vacation, with Gen Z leading the pack at 96%.
And they no longer wait until they're in-destination to book experiences. Instead, they're planning their trip around them. Two-thirds of travelers said they pick travel destinations based on the types of experiences they can have while there, the report said.