June 17, 2024
Urban Tourism Market

Urban Tourism Market Estimated to Witness High Growth Owing to Growing Interest in Cultural Experiences

Urban tourism refers to visits by persons from outside a city or town to experience culture, attractions, and unique aspects in an urban environment. It involves traveling to cities, towns, and locations within city limits for leisure, business, and other purposes. Urban tourism provides an opportunity for cultural enrichment as visitors explore architecture, historical sites, museums, art galleries, festivals, and food influenced by the local culture. The growing interest of people in cultural experiences and unique offerings of destinations rather than conventional forms of tourism has been a key driver for the urban tourism market.

The global urban tourism market is estimated to be valued at US$ 10.56 trillion in 2024 and is expected to exhibit a CAGR of 6.1% over the forecast period from 2024 to 2031. Key cities and destinations have transformed themselves to offer experiences centered around art, culture, heritage, culinary, nightlife and more to appeal to a new generation of travelers. This has increased the attractiveness of urban areas as preferred tourism destinations.

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.

The key opportunities in the Urban Tourism Market Trends include personalized and specialized tours covering niche interests, developing new tourism circuits and routes connecting multiple cities, curating unique food and cultural experiences for visitors. Many cities are also working to improve infrastructure and transportation options to make destinations more accessible and tourist-friendly.

Globally, more cities especially in developing regions are recognizing the economic potential of urban tourism and investing in urban regeneration initiatives. They are focusing on cultural heritage preservation, improving urban environments and promoting local communities. This will help expand the global urban tourism industry footprint over the coming years.

Market Drivers

A major market driver is the growing interest of millennials and generation Z travellers in authentic experiences, cultural discovery and adventure activities when travelling. They prefer exploring destinations by immersing themselves in local life rather than staying confined in all-inclusive resorts. This has boosted the demand for urban tourism products tailored around culture, arts, niche interests and Instagrammable moments of a place.

PEST Analysis

Political: Urban tourism is highly influenced by various regulations and policies introduced by governments related to travel, infrastructure development, transportation and conservation of historical/cultural sites. New visa rules and regulations can impact cross border tourism.

Economic: Growth in disposable incomes and spending power has led to rise in leisure travel among urban populations. Urban tourists tend to spend more on local experiences, stay, dining and shopping which boosts local economies.

Social: Rising popularity of urban destinations among millennial travelers is a major social trend. Many seek unique experiences, explore local culture and indulge in activities like street food, art walks or festivals. Social media further drives interest in offbeat urban places.

Technological: Advanced technologies facilitate seamless travel bookings, transfers and payments for urban tourists. Apps providing tailored recommendations based on interests are widely used. Wearables and AR/VR enhance the travel experience in some cities.

Market where value is concentrated

North America accounts for the largest share of the global urban tourism market value predominantly owing to the United States. Major cities like New York, Los Angeles, Chicago, Miami attract substantial domestic as well international tourists every year. Europe is another region with high market value led by top destinations such as London, Paris, Rome, Barcelona. Asia Pacific is emerging rapidly led by Chinese and Indian metropolitan centers.

Fastest growing region

Asia Pacific region is poised to exhibit the fastest growth in the urban tourism market during the forecast period. Rapid urbanization, growing middle class, increasing spending power and globalization are driving more domestic and international travelers to explore major cities in countries such as China, India, Thailand, Indonesia and Vietnam. Metro cities in Asia already attract a significant number of tourists and the regional market is expected to witness strong momentum. Investments in infrastructure and connectivity along with government support will fuel the Asia Pacific’s lead as the fastest growing region.

*Note:
1. Source: Coherent Market Insights, Public Source, Desk Research
2. We have leveraged AI tools to mine information and compile it