Four themes emerged from this year’s McKinsey & Company’s State of Tourism and Hospitality report, which provides a snapshot of current traveler flows and estimates for growth. The themes outlined below all have one thing in common: they’re disruptive. They’re changing the way we look at travel. They’re setting new trends that will last through the end of the decade.

1. The Bulk of Travel is Close to Home

Domestic travel still represents the bulk of the market, according to the report. It recovered faster than international travel after the COVID-19 pandemic. In fact, it’s breaking records: Five national parks broke attendance records in 2023.

Here’s how to take advantage of the domestic travel boom, according to McKinsey:

  • Encourage domestic tourists to rediscover local gems.
  • Tie in domestic destinations into fuller itineraries.
  • Remove logistical barriers to traveling across border countries.

2. Consumers are Increasingly Prioritizing Travel — When It’s on Their Own Terms

The year of personalization has become the decade of personalization, and it’s everywhere. McKinsey recommends adapting offerings accordingly by using segmentation and hypothesis-driven testing to improve value propositions.

Travel has become a priority, especially for younger generations, McKinsey’s survey found. Younger travelers are particularly interested in international travel, and they’re doing the research upfront to figure out what kind of experiences they want.

3. The Face of Luxury Travel is Changing

McKinsey suggests it’s time to reexamine what we consider the “luxury traveler” in 2024. Demand for luxury tourism and hospitality is expected to grow faster than for any other industry segment, powered in part by a sharp rise in the number of people globally whose net worths fall between $1 million and $30 million.

But those aren’t the only people seeking luxury experiences; McKinsey’s analysis found that folks with a net worth of between $100,000 and $1 million are also increasingly willing to spend more on upscale travel options. McKinsey suggests we alter our perception that all luxury travelers are very wealthy.

We also need to nix the idea that the luxury traveler is old — McKinsey found that 80 percent of the luxury leisure market is made up of people below the age of 60.

McKinsey surveyed so-called luxury travelers — defined in the report as those who spend, on average, $500 or more a night on lodging — and found these commonalities: they were from China, Germany, the United Arab Emirates, the United Kingdom, and the United States; and they had all taken at least one leisure trip in the past two years.

4. Destinations Need to Prepare to Mitigate Overcrowding

Given that travel is once again sought after, and younger generations are taking part with enthusiasm, it’s no wonder McKinsey’s report found a huge need for destinations to prepare for the increase in visitors by investing in mitigation strategies to prevent overcrowding.

McKinsey cited recent satellite data that suggested 80 percent of travelers visit just 10 percent of the world’s tourist destinations.

“A large flow of tourists, if not carefully channeled, can encumber infrastructure, harm natural and cultural attractions, and frustrate locals and visitors alike,” the report states. “Today’s tech-enabled travel landscape can exacerbate this issue: one eye-catching photo on a social media network can make a little-known attraction go viral.”

Download the full McKinsey report now to learn more about the trends shaping travel in 2024.