The Rise of the Emerging Market Traveler

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This is the first article in our series about The Habits of BRIC Travelers from Skift and Translations.com

Tourism’s wide-scale demographic shift is one of the biggest trends reshaping 21st century travel. As income levels climb, masses of first-time international travelers are pouring out of China and the other BRICs, and gradually venturing out of other emerging markets, from Mexico and Malaysia to Turkey and the Philippines.

“Outbound tourism from many emerging markets has grown very significantly over the past 10 years,” says Euromonitor analyst Amanda Bourlier. “This can be seen not just in one or two sub-regions, but from many countries.” While income isn’t always neatly correlated with travel, Bourlier notes that middle-class households have increased substantially over the past two decades in many of the fastest-growing outbound markets. Annual income of $35,000 per household is the estimated tipping point at which households start considering travel a viable option.  

Rising disposable income isn’t the only factor: The cost of travel has dropped, some visa restrictions have lifted, digital tools are expanding access to planning and booking, social media can serve as a powerful motivator, and the Millennial generation is exceptionally open to exploring other cultures. In turn, as travel brands better adapt to the emerging market customer, more tourists from these markets will be drawn to international destinations.

Across nine key emerging markets, just 8 percent of holidays are international trips, according to Credit Suisse’s fifth annual study of emerging consumers, released last January. But substantive increases in outbound travel from Brazil, China and Turkey suggest these markets “may have passed an important inflection point.” Credit Suisse reports a 13 percent overall growth rate in “holidaying” in these nine markets since 2010, with India and Indonesia showing the greatest increase.

China, of course, is the behemoth in terms of sheer numbers of international travelers as well as their spending. It’s the top source market for international tourists and, since 2012, the top spender in international tourism. The UN’s World Tourism Organization estimates that Chinese travelers spent $165 billion abroad in 2014 — some $54 billion more than Americans, the No. 2 spenders. Using UNWTO data, Euromonitor International reports a 13 percent compound annual growth rate in outbound trips from China from 2005 to 2014.

While the rate of growth is likely to slow in the wake of China’s stock market upheavals, the number of travelers is expected to keep swelling, especially given that thus far only a small minority of Chinese actually hold a passport (roughly 6 percent of the population). “We’re seeing the tip of the iceberg in terms of outbound travel from China,” says Chris Fair, president of Resonance, a New York- and Vancouver-based tourism consultancy. While more than 80 percent of international Chinese tourists currently remain within Asia, Fair expects that within a decade, more than half of Chinese travelers will go farther afield and seek out more diverse experiences.

Chinese and other emerging market travelers are already looking beyond packaged tours, “rapidly shifting from group travel, which is relatively self-contained and easy to manage, to free, independent travel,” says Chris Fair.

Geoffrey Breeze, marketing director at World Travel & Tourism Council, agrees, noting that “The propensity to individual travel is evolving as quickly as visa regulations and the regulatory climate permit.” The WTTC, which advocates for looser visa restrictions, reports that thanks to reductions in formalities around entering countries, the percentage of the world’s population that required a traditional visa prior to departure dropped from 77% in 2008 to 62% in 2014.

The next articles in this series will look at how companies are meeting the challenge of catching the eye of emerging market travelers, providing satisfying in-trip experiences and keeping them engaged afterward.

This post was created collaboratively with our partner Translations.com.