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Finance & Development

Wish You Were Here

ADAM BEHSUDI

December 2020

Credit: ISTOCK / ULIMI; AJWAD CREATIVE ; MVALIGURSKY; PRIMEIMAGES; MYROSLAVA

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Tourism-dependent economies are among those harmed the most by the pandemic

Before COVID-19, travel and tourism had become one of the most important sectors in the world economy, accounting for 10 percent of global GDP and more than 320 million jobs worldwide.

In 1950, at the dawn of the jet age, just 25 million people took foreign trips. By 2019, that number had reached 1.5 billion, and the travel and tourism sector had grown to almost too-big-to-fail proportions for many economies.

The global pandemic, the first of its scale in a new era of interconnectedness, has put 100 million jobs at risk, many in micro, small, and medium-sized enterprises that employ a high share of women, who represent 54 percent of the tourism workforce, according to the United Nations World Tourism Organization (UNWTO).

Tourism-dependent countries will likely feel the negative impacts of the crisis for much longer than other economies. Contact-intensive services key to the tourism and travel sectors are disproportionately affected by the pandemic and will continue to struggle until people feel safe to travel en masse again.

“There is no way we can grow our way out of this hole we are in,” Irwin LaRocque, secretary-general of the Caribbean Community (CARICOM), said at a virtual event in September.

From the white sand beaches of the Caribbean, Seychelles, Mauritius, and the Pacific to the back streets of Bangkok, to Africa’s sweeping national parks, countries are grappling with how to lure back visitors while avoiding new outbreaks of infection. The solutions range from wooing the ultrarich who can quarantine on their yachts to inviting people to stay for periods of up to a year and work virtually while enjoying a tropical view.

Tourism receipts worldwide are not expected to recover to 2019 levels until 2023. In the first half of this year, tourist arrivals fell globally by more than 65 percent, with a near halt since April—compared with 8 percent during the global financial crisis and 17 percent amid the SARS epidemic of 2003, according to ongoing IMF research on tourism in a post-pandemic world.

The October World Economic Outlook projected the global economy would contract by 4.4 percent in 2020. The shock in tourism-dependent economies will be far worse. Real GDP among African countries dependent on tourism will shrink by 12 percent. Among tourism-dependent Caribbean nations, the decline will also reach 12 percent. Pacific island nations such as Fiji could see real GDP shrink by a staggering 21 percent in 2020.

Nor is the economic hit limited to the most tourism-dependent countries. In the United States, Hawaii saw one in every six jobs vanish by August . In Florida, where tourism accounts for up to 15 percent of the state’s revenue, officials said it will take up to three years for the industry to recover.

Among G20 countries, the hospitality and travel sectors make up 10 percent of employment and 9.5 percent of GDP on average, with the GDP share reaching 14 percent or more in Italy, Mexico, and Spain. A six-month disruption to activity could directly reduce GDP between 2.5 percent and 3.5 percent across all G20 countries, according to a recent IMF paper .

Managing the revenue gap

In Barbados and Seychelles, as in many other tourism-dependent nations, the pandemic brought the industry to a virtual standstill. After successfully halting local transmission of the virus, the authorities reopened their island countries for international tourists in July. Still, arrivals in August were down almost 90 percent relative to previous years, drying up a vital stream of government revenue.

Barbados had gone into the crisis with good economic fundamentals, as a result of an IMF-supported economic reform program that helped stabilize debt, build reserves, and consolidate its fiscal position just before the crisis struck. The IMF augmented its Extended Fund Facility program by about $90 million, or about 2 percent of GDP, to help finance the emerging fiscal deficit as a result of plummeting revenues from tourism-related activity and increasing COVID-related expenditures.

“The longer this lasts, the more difficult it gets to maintain,” says Kevin Greenidge, senior technical advisor to Barbados Prime Minister Mia Mottley. “What we don’t want to do is operate policy-wise in a manner that will jeopardize the gains in terms of the fundamentals that we have made.”

On the other side of the world, Seychelles, a country that entered the crisis from a similar position of strength, will still be challenged to return to medium-term fiscal sustainability without significant support. Just before the crisis struck, the government had rebuilt international reserves and consolidated its fiscal positions. Even so, the ongoing pandemic struck the Indian Ocean island nation very hard as tourism revenues fell while COVID-related expenditures increased.

“It is too early to determine whether the crisis represents a permanent shock and how it will shape the tourism industry going forward,” says Boriana Yontcheva, the IMF’s mission chief to Seychelles. “Given the large uncertainties surrounding the recovery of the sector, innovative structural policies will be necessary to adapt to the new normal.”

All over the world, tourism-dependent economies are working to finance a broad range of policy measures to soften the impact of plummeting tourism revenues on households and businesses. Cash transfers, grants, tax relief, payroll support, and loan guarantees have been deployed. Banks have also halted loan repayments in some cases. Some countries have focused support on informal workers, who tend to be concentrated in the tourism sector and are highly vulnerable.

An analysis of the tourism industry by McKinsey & Company says that multiyear recovery of tourism demand to 2019 levels will require experimenting with new financing mechanisms.

The consulting firm analyzed stimulus packages across 24 economies totaling $100 billion in direct aid to the tourism industry and $300 billion in aid across other sectors with significant involvement in tourism. Most direct stimulus was in the form of grants, debt relief, and aid to small and medium-sized enterprises and airlines. The firm recommends new ways to support the industry, including revenue-sharing mechanisms among hotels that compete for the same market segment, such as a stretch of beachfront, and government-backed equity funds for tourism-related businesses.

Development challenge

The crisis has crystallized the importance of tourism as a development pathway for many countries to decrease poverty and improve their economies. In sub-Saharan Africa, the development of tourism has been a key driver in closing the gap between poor and rich countries, with tourism-dependent countries averaging real per capita GDP growth of 2.4 percent between 1990 and 2019—significantly faster than non-tourism-dependent countries in the region, according to IMF staff.

Smaller, tourism-dependent nations are in many ways locked into their economic destinies. Among small island nations, there are few, if any, alternative sectors to which they can shift labor and capital.

Seychelles, for example, has benefited from increases in tuna exports during the COVID-19 period, which have somewhat offset tourism losses, but these additional earnings remain a fraction of tourism receipts. The government is also carrying out a plan to pay wages to displaced tourism-sector workers while offering opportunities for retraining.

Meanwhile, the government in Barbados is trying to maintain social spending and reprioritize capital spending to create jobs, at least temporarily, in nontourism sectors such as agriculture and infrastructure development.

The Caribbean Hotel and Tourism Association has projected that as many as 60 percent of the 30,000 new hotel rooms that were in the planning or construction phase throughout the Caribbean region will not be completed as a result of the crisis.

Still, the crisis is being viewed as an opportunity to improve the industry in the medium and long term through greater digitalization and environmental sustainability. The UNWTO has encouraged support for worker training in order to build digital skills for harnessing the value of big data, data analytics, and artificial intelligence. Recovery should be leveraged to improve the industry’s efficient use of energy and water, waste management, and sustainable sourcing of food.

“In a sector that employs 1 in 10 people globally, harnessing innovation and digitalization, embracing local values, and creating decent jobs for all—especially for youth, women, and the most vulnerable groups in our societies—could be at the forefront of tourism’s recovery,” says UNWTO Secretary-General Zurab Pololikashvili.

Adjusting to a new normal

As the immediate impact of lockdowns and containment measures eased during the second half of 2020, countries started looking for a balance.

Thailand, Seychelles, and other countries approved programs that would admit tourists from “lower-risk” countries with special quarantine requirements. Fiji has created “blue lanes” that will allow seafaring visitors to arrive on yachts and quarantine at sea before they unleash “the immense economic impact they carry aboard,” Prime Minister Frank Bainimarama declared on Twitter. St. Lucia requires a negative COVID-19 test no more than seven days before arrival. Australia created a “travel bubble” that will eliminate quarantine requirements for travelers from New Zealand. CARICOM countries have also created a “regional travel bubble” that eliminates testing and quarantine for people traveling from countries within the bubble.

In a new era of remote work, countries and territories such as Barbados, Estonia, Georgia, Antigua and Barbuda, Aruba, and the Cayman Islands offer new long-term permits, lasting up to 12 months in some places, to entice foreign visitors to bring their virtual offices with them while spending in local economies.

Japan, which had seen its international arrivals triple from 2013 to 2018, started lifting border closures for travelers from certain countries at the end of October. To accommodate a post-pandemic tourism rebound, an IMF Working Paper recommends that the government continue a trend of relaxing visa requirements, draw visitors away from urban centers to less populated regions of the country, and complement a tourism comeback with improvements to labor resources and tourism infrastructure.

The World Tourism and Travel Council in a report on the future of the industry said the pandemic has shifted travelers’ focus to domestic trips or nature and outdoor destinations. Travel will largely be “kickstarted by the less risk averse travelers and early adopters, from adventure travelers and backpackers to surfers and mountain climbers,” the report says.

Leisure travel will lead the comeback in the tourism and travel sector. Business travel, a crucial source of revenue for hotels and airlines, could see a permanent shift or may come back only in phases based on proximity, reason for travel, and sector.

In the end, the return of tourism will likely hinge on what will be a deeply personal decision for many people as they weigh the risk of falling ill against the necessity of travel. The private sector backed by some tourism-dependent nations is developing global protocols for various travel industries, including a call for more rapid testing at airports to boost confidence in traveling.

“The fact is people do not feel comfortable traveling. We have not put in the necessary protocols to give them that comfort,” St. Lucia Prime Minister Allen Chastanet said at a September virtual event. “After 9/11, the TSA [Transportation Security Administration] and other security agencies around the world did a fantastic job of developing protocols that regained the public’s confidence to travel, and sadly with this pandemic we haven’t done that.”

ADAM BEHSUDI is on the staff of Finance & Development.

Opinions expressed in articles and other materials are those of the authors; they do not necessarily reflect IMF policy.

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The way we travel now

What sorts of journeys do today’s travelers dream about? Where would they like to go? What do they hope to do when they get there? How much are they willing to spend on it all? And what should industry stakeholders do to adapt to the traveler psychology of the moment?

About the authors

To gauge what’s on the minds of current-day travelers, we surveyed more than 5,000 of them in February and March of this year. 1 Unless otherwise noted, the source for all data and projections is McKinsey State of Travel Survey, 5,061 participants, February 27 to March 11, 2024. Our universe of respondents included travelers from five major, representative source markets: China, Germany, the United Arab Emirates, the United Kingdom, and the United States. All respondents took at least one leisure trip in the past two years. We asked them more than 50 questions about their motivations, behavior, and expectations.

Results from this survey, supplemented with findings from focus groups and other additional research, suggest six vital trends that are shaping traveler sentiment now.

Travel has become a top priority, especially for younger generations

Sixty-six percent of the travelers we surveyed say they’re more interested in travel now than they were before the COVID-19 pandemic. This pattern holds across all surveyed age groups and nationalities. Respondents also indicate that they’re planning more trips in 2024 than they did in 2023.

Travel isn’t merely an interest these days. It’s become a priority—even amid uncertain economic conditions that can make budgeting a challenge. Travel continues to be one of the fastest-growing consumer spending areas, rising 6 percent over a recent 12-month period in the United States, even when adjusted for inflation. Only 15 percent of our survey respondents say they’re trying to save money by reducing the number of trips they go on. And in the February 2024 McKinsey ConsumerWise Global Sentiment Survey of more than 4,000 participants, 33 percent of consumers said they planned to splurge on travel, ranking it the third-most-popular splurge category—trailing only eating at home and eating out at restaurants. 2 Christina Adams, Kari Alldredge, Lily Highman, and Sajal Kohli, “An update on US consumer sentiment: Consumers see a brighter future ahead,” McKinsey, February 29, 2024.

Younger generations appear to propel much of the rising interest in travel (Exhibit 1). In 2023, millennials and Gen Zers took, on average, nearly five trips, versus less than four for Gen Xers and baby boomers. Millennials and Gen Zers also say they devote, on average, 29 percent of their incomes to travel, compared with 26 percent for Gen Zers and 25 percent for baby boomers.

Younger travelers are the most keen to venture abroad

Younger travelers are particularly excited about international travel. Gen Zers and millennials who responded to our survey are planning a nearly equal number of international and domestic trips in 2024, no matter their country of origin, whereas older generations are planning to take roughly twice as many domestic trips (Exhibit 2).

Younger travelers’ thirst for novelty might be motivating their urge to cross borders. Gen Zers say their number-one consideration when selecting a destination is their desire to experience someplace new. For Gen Xers, visiting a new place comes in at number eight, behind factors such as cost, ease of getting around, and quality of accommodation.

There might be a mindset shift under way, with international travel feeling more within reach for younger travelers—in terms of both cost and convenience. Younger travelers have become adept at spotting international destinations that feature more affordable prices or comparatively weak currencies. Low-cost airlines have proliferated, carrying 35 percent of the world’s booked seats over a recent 12-month period. 3 “Low-cost carriers in the aviation industry: What are they?,” OAG Aviation Worldwide, September 13, 2023. Meanwhile, translation software is lowering language barriers, mobile connectivity overseas is becoming cheaper and more hassle free, and recent visa initiatives in various regions have made passport-related obstacles easier to overcome.

It remains to be seen whether this mindset shift will endure as younger generations get older. But early evidence from millennials suggests that they’ve retained their interest in international travel even as they’ve begun to age and form families. It could be that this is a lasting attitude adjustment, influenced as much by the changing dynamics of travel as it is by youth.

Baby boomers are willing to spend if they see value

Baby boomers are selective about their travel choices and travel spending. Enjoying time with family and friends is their number-one motivation for taking a trip. Experiencing a new destination is less important to them—by as much as 15 percentage points—than to any other demographic.

Although older travelers appreciate the convenience that technology can offer, they prefer human contact in many contexts (Exhibit 3). For example, 44 percent of baby boomers—versus only 30 percent of other respondents—say they value having a travel agent book an entire travel experience for them. And only 42 percent of baby boomers have used a mobile app to book transportation, versus 71 percent of other respondents.

While this generation typically has more accumulated savings than other generations, they remain thoughtful about how they choose to spend. Their top two cited reasons for not traveling more are “travel is becoming too expensive” and “not having enough money to travel.” They make up demographic most willing to visit a destination out of season, with 62 percent saying they’re open to off-peak travel to bring costs down.

Baby boomers might be willing to spend strategically, in ways that make travel more convenient and less burdensome. For example, whereas 37 percent of Gen Zers are willing to take a cheaper flight to lower their travel costs—even if it means flying at inconvenient times or with a stopover—only 22 percent of baby boomers say they’ll do the same. But these older travelers don’t splurge indiscriminately: only 7 percent describe their attitude toward spending as “I go out all the way when I travel.” They’re much more willing to forgo experiences to save money, identifying this as the first area where they cut spending. Gen Zers, on the other hand, will cut all other expense categories before they trim experiences.

Whatever baby boomers’ stated feelings and preferences, they still account for a substantial share of travel spending. And they still spend more than younger generations—three times more per traveler than Gen Zers in 2023, for example.

The adventure starts before the trip begins

Travelers are delighting in crafting their own trips. Only 17 percent of survey respondents say they used a travel agent to book a trip in the past year. When asked why, respondents’ top-cited reason is that they want full control over their itineraries. Their second-most-cited reason? They simply enjoy the planning process. In fact, studies have shown that the anticipation of a journey can lead to higher levels of happiness than the journey itself. 4 Jeroen Nawijn et al., “Vacationers happier, but most not happier after a holiday,” Applied Research in Quality of Life , March 2010, Volume 5, Number 1.

When seeking inspiration during the planning process, respondents are most likely to turn to friends and family—either directly or on social media (Exhibit 4). Advice from other travelers is also sought after. Fewer and fewer travelers rely on travel guidebooks for inspiration.

Today’s travelers tend to view the planning process, in part, as a treasure hunt. Seventy-seven percent of respondents describe the research phase as an effort to ensure that they’re finding good deals or saving money. And all demographics describe “value for money” as the most important factor when choosing a booking channel.

Unexpected traveler archetypes are emerging

When we analyzed our survey results, we identified seven clusters of travelers who express shared attitudes and motivations toward travel. While the distribution of these archetypes varies across source markets, respondents within each archetype exhibit strong similarities:

Seven clusters of travelers express shared attitudes and motivations toward travel. Each archetype’s distribution varies across source markets, but the travelers within them exhibit strong similarities.

• Sun and beach travelers (23 percent of respondents). These vacationers travel rarely and spend frugally, preferring sun and beach destinations that are easy to get to. They like to relax and visit with family. They’re relatively more likely to place significant value on nonstop flights (72 percent, versus 54 percent overall) and are less interested in authentic and immersive experiences (only 13 percent say these are main reasons why they travel).
• Culture and authenticity seekers (18 percent). These are active and high-budget travelers who typically spend more than $150 per day on holiday, love to sightsee, are willing to spend on experiences, and don’t want to settle for typical bucket-list destinations. Only 6 percent prioritize familiarity when choosing where to go—the lowest percentage of any traveler segment. This segment is also least likely (at 17 percent) to say they would shorten a holiday to save money.
• Strategic spenders (14 percent). These travelers are open to selectively splurging on authentic, carefully curated experiences. But they keep a watchful eye on total spending. They’re willing to sacrifice some conveniences, such as nonstop flights, in the interest of cost savings.
• Trend-conscious jet-setters (14 percent). Travelers in this high-budget group (they spend more than $150 per day when traveling) turn first to friends and family (79 percent) and then to social media (62 percent) when scouting destinations. Seventy-six percent say the popularity of a destination is an important factor, compared with 63 percent overall. And 75 percent say they focus on hotel brands when selecting accommodations.
• Cost-conscious travelers (11 percent). This travel segment is made up of predominantly older travelers who travel rarely and frequently return to the same destinations and activities. They’re relatively more likely to care about the familiarity of a destination (54 percent, versus 35 percent overall) and the cost of the trip (76 percent, versus 65 percent overall).
• Premium travelers (12 percent). This segment expects high-quality trappings when they travel, and only 20 percent say that cost is an important factor. These frequent travelers are especially selective about accommodation—they, on average, are more likely than travelers overall to care about brand, prestige, exclusivity, design, decor, amenities, and sustainability. Similarly to trend-conscious jet-setters, this traveler segment is, on average, more likely than travelers overall (at 27 percent, versus 18 percent) to be swayed by celebrities and influencers when choosing travel destinations.
• Adventure seekers (8 percent). This younger segment enjoys active holidays that present opportunities to encounter like-minded travelers. Nineteen percent say they’re motivated by adventure and physical activities, and 15 percent say meeting new people is a major reason why they travel. They aren’t after large-group events; instead, they prefer small-group adventures. This segment prizes remoteness, privacy, and sustainability.

What travelers want depends on where they’re from

When asked what trips survey respondents are planning next, 69 percent of Chinese respondents say they plan to visit a famous site—a marked difference from the 20 percent of North American and European travelers who say the same. Chinese travelers are particularly motivated by sightseeing: 50 percent cite visiting attractions as their main reason for traveling, versus an average of 33 percent for those from other countries.

Emirati travelers, like their Chinese counterparts, favor iconic destinations, with 43 percent saying they plan to visit a famous site. They also have a penchant for shopping and outdoor activities. Fifty-six percent of respondents from the United Arab Emirates describe the range of available shopping options as an important factor when selecting a destination—a far higher proportion than the 35 percent of other respondents. And respondents from the United Arab Emirates report going on a greater number of active vacations (involving, for instance, hiking or biking) than any other nationality.

Travelers from Europe and North America are especially keen to escape their daily routines. Respondents from Germany (45 percent), the United States (40 percent), and the United Kingdom (38 percent) place importance on “getting away from it all.” Only 17 percent of respondents from China and the Middle East feel the same way. European travelers are particularly fond of beach getaways: respondents from the United Kingdom and Germany cite “soaking in the sun” at twice the rate of American respondents as a main reason they travel.

Travel is a collective story, with destinations as the backdrop

Younger generations are prioritizing experiences over possessions. Fifty-two percent of Gen Zers in our survey say they splurge on experiences, compared with only 29 percent of baby boomers (Exhibit 5). Gen Z travelers will try to save money on flights, local transportation, shopping, and food before they’ll look to trim their spending on experiences. Even terminology used by younger generations to describe travel is experience oriented: “Never stop exploring” is tagged to nearly 30 million posts on Instagram.

The value of experiences is often realized in the stories people tell about them. Books and films have spurred tourists to flock to specific destinations (for instance, when droves of Eat, Pray, Love: One Woman's Search for Everything across Italy, India and Indonesia [Viking Penguin, 2006] readers visited Bali). And travel has always been a word-of-mouth business, in which travelers’ stories—crafted from their experiences—can inspire other travelers to follow in their footsteps.

Social media is the latest link in this chain: a technology-driven, collective storytelling platform. Ninety-two percent of younger travelers in our survey say their last trip was motivated in some way by social media. Their major sources of social inspiration, however, aren’t necessarily influencers or celebrities (30 percent) but rather friends and family (42 percent). Consumers’ real-life social networks are filled with extremely effective microinfluencers.

Posting vacation selfies is a popular way to share the story of a journey. But a growing number of social media users are searching for ways to present their travel narratives in a more detailed and more enduring fashion, and new apps and platforms are emerging to help them do so. The microblogging app Polarsteps, which more than nine million people have downloaded, helps travelers plan, track, and then share their travels—allowing journeys to be captured in hardcover books that document routes, travel statistics, and musings.

Giving today’s travelers what they need and want

From our survey findings, important takeaways emerge that can help tourism industry players engage with today’s travelers.

Know customer segments inside and out

Serving up a one-size-fits-all experience is no longer sufficient. Using data to segment customers by behavior can help tourism players identify opportunities to tailor their approaches more narrowly.

Cutting-edge data strategies aren’t always necessary to get started. Look-alike analysis and hypothesis-driven testing can go a long way. Even without having data about a specific family’s previous travel patterns, for example, an airline might be able to hypothesize that a family of four traveling from New York to Denver on a long weekend in February is going skiing—and therefore might be interested in a discounted offer that lets them check an additional piece of luggage.

The same philosophy applies to personalization, which doesn’t necessarily need to be focused on a single individual. Merely having a clearer sense of the specific segments that a provider is targeting can help it craft a more compelling offer. Instead of simply creating an offer geared toward families, for instance, providers might build an offer tailored to families who are likely to visit in the spring and will be primarily interested in outdoor activities. And instead of relying on standard tourist activities, providers might find ways to cater to more specific traveler interests—for example, facilitating a home-cooked meal with locals instead of serving up a fine-dining experience.

Help travelers share their journeys

Today’s travelers want to share their travel stories. And friends and family back home are more likely to be influenced by these stories than by anything else they see or hear. Providers should consider ways to tap into this underexploited marketing channel.

Hotels can install a photo booth that enables guests to share pictures from their journeys. Guests can be given small souvenirs to take home to their friends and family. Hotels might also send guests photos on the anniversary of a trip to help jog happy memories and prompt a future booking.

Given the right incentives, customers can act as a distributed team of marketers. Reposting guests’ social media photos and videos, for example, or spurring engagement with contests and shareable promo codes can encourage travelers to become evangelists across an array of different channels.

Recognize younger generations’ unquenchable thirst for travel

Younger travelers’ remarkable desire for experiences isn’t always in line with their budgets—or with providers’ standard offerings. A new generation of customers is ripe to be cultivated if providers can effectively meet their needs:

• Travel companies can better match lower-budget accommodations with younger travelers’ preferences by incorporating modern design into rooms and facilities, curating on-site social events, and locating properties in trendy neighborhoods.
• More affordable alternatives to classic tourist activities (for example, outdoor fitness classes instead of spas or street food crawls instead of fine dining) can be integrated into targeted packages.
• Familiar destinations can be reinvented for younger travelers by focusing on experiences (for instance, a street art tour of Paris) instead of more traditional attractions (such as the Eiffel Tower).

Cater to older travelers by using a human touch and featuring family-oriented activities

Older generations remain a major source of travel spending. Providers can look for ways to keep these travelers coming back by meeting their unique needs:

• While older travelers are growing more comfortable with technology, they continue to favor human interaction. Stakeholders can cater to this preference by maintaining in-person visitor centers and other touchpoints that emphasize a human touch.
• Older travelers are generally fond of returning to familiar destinations. Providers can look to maximize repeat business by keeping track of guest information that aids personalization (such as favorite meals or wedding anniversary dates). Identifying historical behavior patterns (for example, parents repeatedly visiting children in the same city) can help providers make targeted offers that could maximize spending (for example, a museum subscription in that city).
• The off-seasonal travel patterns that older travelers often exhibit might open opportunities for providers to create appealing experiences scheduled for lower-occupancy periods—for example, an autumn wellness retreat at a popular summer destination.
• Older travelers’ propensity to visit family and friends opens the door to offerings that appeal to a range of generations, such as small-group trips pairing activities for grandparents and grandchildren.

Travelers are more interested in travel—and more willing to spend on it—than ever before. But the familiar, one-size-fits-all tourism offerings of the past have grown outdated. Today’s travelers want to indulge in creative experiences that are tailored to their priorities and personal narratives. The good news for providers: new technology and new approaches, coupled with tried-and-true strengths such as managerial stamina and careful attention to service, are making it easier than ever to shape personalized offerings that can satisfy a traveler’s unique needs.

Caroline Tufft is a senior partner in McKinsey’s London office, Margaux Constantin is a partner in the Dubai office, Matteo Pacca is a senior partner in the Paris office, Ryan Mann is a partner in the Chicago office, Ivan Gladstone is an associate partner in the Riyadh office, and Jasperina de Vries is an associate partner in the Amsterdam office.

The authors wish to thank Abdulhadi Alghamdi, Alessandra Powell, Alex Dichter, Cedric Tsai, Diane Vu, Elisa Wallwitz, Lily Miller, Maggie Coffey, Nadya Snezhkova, Nick Meronyk, Paulina Baum, Peimin Suo, Rebecca Stone, Sarah Fellay, Sarah Sahel, Sophia Wang, Steffen Fuchs, Steffen Köpke, Steve Saxon, and Urs Binggeli for their contributions to this article.

This article was edited by Seth Stevenson, a senior editor in the New York office.

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Inside the World’s Rarest Experiences: Why the Rich Love Extreme Tourism

O n June 18, 2023, the submersible Titan lost contact with the outside world as it approached the wreckage of the Titanic 13,000 feet below sea level at the bottom of the North Atlantic.

Among the five people on board were ultra-rich extreme tourists who paid $250,000 each to cram into the makeshift sub and descend into the abyss.

Four days later, on June 22, an international search was called off when officials determined that Titan had imploded, killing all aboard.

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The next day, on June 23, Business Insider reported that it was unlikely that the tragedy would deter the world’s wealthy elite from paying top dollar to risk their lives for the sake of so-called “extreme tourism” — high-end, hardcore adventure travel that requires money most people will never have for experiences that most people would never want.

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The lifting of pandemic-era restrictions triggered an avalanche of cash into the extreme tourism realm as the rich lined up to part with small fortunes to experience the last remaining (mostly) unseen, untouched corners of the world and beyond.

Grand View Research reports that the extreme tourism industry was worth $322 billion in 2022 but is on pace to top $1 trillion in 2030.

Much of the enthusiasm comes from COVID itself.

Like everyone else, the rich watched helplessly as friends and loved ones died from humdrum daily tasks like trips to the grocery store or visits to the doctor’s office. Gone forever, their fortunes unspent, many rich survivors vowed to live their lives to the fullest, even if it killed them.

“More and more wealthy travelers are diving into extreme tourism because they understand how fleeting life can be,” said Frank Spitzer, CEO at Pelecanus , a luxury travel operator that specializes in upscale vacation packages in Colombia. “This mindset of embracing life’s unpredictability is pushing them to seek out thrilling adventures and extravagant getaways before change is ahead. Also, they can easily afford these extravagant expeditions, so why not?”

So, what, exactly, are these ‘extravagant expeditions’ and how much do they cost?

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The Titanic wreckage sits roughly 2.5 miles below the surface of the ocean. That’s just a short stroll compared to the journey that space tourists take when they travel up and away from Earth’s oceans to a different kind of abyss.

Axiom Space is a privately funded space infrastructure corporation that flies missions to the International Space Station and its own Axiom Station. It offers so-called “private astronauts” the chance to visit space and view their home planet from the emptiness of the final frontier. 

The company states, “Missions with Axiom include 17 weeks of expert training at space agency facilities that only a privileged few get to see. Training prepares the participant as an astronaut, develops a deep camaraderie with fellow astronauts and truly inaugurates one as a member of the exclusive space traveler family.”

Understandably, none of that comes cheap. Axiom Space doesn’t disclose the per-person cost of its private astronaut program, but Space.com estimates each seat sells for roughly $55 million.

Jet-Setting, Redefined

Some people would rather see the world than float above it — and they might not have eight figures to plunk down even if they did. For them, extreme tourism involves cramming as many experiences in as short a time with as much luxury as humanly possible.

Companies like Abercrombie & Kent organize mind-boggling global private jet tours like Around the World with Geoffrey Kent. It costs $185,000 per person — but think of what you get for the money.

The excursion takes place over 26 days, and in less than a month, the rich will receive insider access to local spots that regular tourists can’t visit in Japan, India, Malta, Senegal, Saint Helena, Uruguay, Easter Island and French Polynesia.

Their tour bus is a chartered Boeing 747 with full lie-down first-class seating, a dedicated staff and a chef. Wherever the passengers go, a valet, concierge, guide and luggage handler follow.

They probably won’t risk their lives, but they will experience the most extreme and expensive globe-trotting that money can buy.

Pursuing Extreme Animals and Environments

Another mainstay of extreme tourism is, naturally, the pursuit of the extreme — extreme wildlife, extreme environments, extreme weather, etc.

For example, Abercrombie & Kent — just one of several ultra-luxe extreme travel providers — offers the following packages that allow the rich to pursue the planet’s wildest side in style:

• North Pole Expedition Cruise: From $47,995 per person
• Arctic Cruise Adventure — In Search of Polar Bears: From $20,495 per person
• Kenya and Tanzania Wildlife Safari: From $11,995 per person
• Climb Kilimanjaro — Summiting the Machame Route: From $8,495 per person
• The Great Migration Safari in Style: From $19,795
• Galapagos Wildlife Adventure: From $11,495 per person
• Patagonia, the Last Wilderness: From $11,495 per person

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This article originally appeared on GOBankingRates.com : Inside the World’s Rarest Experiences: Why the Rich Love Extreme Tourism

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JTT is your one stop shop for all your travel needs when visiting Jordan.  Not only do we offer daily transportation options to various touristic sites in Jordan, we also offer exciting custom made packages: if you want Eco & Adventure, History & Culture, Leisure &Wellness, Religion & Faith escapades during your visit to Jordan, we can put together a package to meet your needs!

Eco & Adventure:

The nature of the land has for centuries shaped the nature of its inhabitants; and the nature of the land here has inspired hospitable people, varied local cuisine and remarkable experiences. The variety in landscape also inspires locals and guests to go on safaris, watch migratory birds on their seasonal movements, observe endangered species in their natural habitats, search for rare flowers in the valleys and hills, enjoy some horseback riding, or trek around the Kingdom.

In Jordan you will be able to hike through canyons, and descend stunning waterfalls in the middle of untouched nature, climb cliffs and mountains to reach breathtaking views, bike through the roads of history’s kings and emperors and so much more.

History & Culture:

There is no mistaking the fact that Jordan is a Kingdom steeped in history and culture. From the moment you arrive, you get a sense of its rich heritage; all around are remnants of ancient civilizations long since passed, yet they still remain, stamped into the very fabric of this amazing Kingdom and etched into the soul of the people who live here.

Leisure & Wellness:

The popularity of the spa vacation has increased worldwide as many people are adopting healthier lifestyles. For this reason, Jordan has complimented its natural therapeutic sites with first class resorts offering a diverse range of amenities. The goal is to provide its visitors with a unique and relaxing experience catering to all of their health, fitness and beauty needs.

Religion & Faith:

The land of modern day Jordan has been the site of significant events in the history of Christianity spanning across centuries throughout the New and Old Testaments. It is because of this religious signifcance that sites all around Jordan have been designated as pilgrimage sites and have been visited by Pope John Paul VI, Pope John Paul II, Pope Benedict XVI and Pope Francis within the past half century. As a land dedicated to religious coexistence, the country of Jordan maintains and protects these religious sites for the use of pilgrims from all around the world.

Meaningful Trips:

By offering unique and hands-on cultural experiences for travelers, each of these social enterprises is satisfying the demand from travelers seeking authentic sustainable experiences that make a difference and their need to use the power of travel to help people and places thrive. If this is what you are looking for, you have come to the right place!

Jordan Trail:

The Jordan Trail is a long distance hiking path in Jordan; connecting the entire length of Jordan from Um Qais in the north to Aqaba in the south. Offering 40 days of hiking with over 650 kilometers of trail, travelling through 52 villages and towns on the wondrous journey, The trail traverses the diverse landscapes and vistas of Jordan’s countryside; from the rolling wooded hills of the north, to the rugged wadis and cliffs overlooking the Jordan Rift Valley, the rose rock city of Petra, to the crystal waters of the Red Sea. 

As you walk the Jordan Trail, it becomes a journey through the history of Jordan and an encounter with its diverse culture. Travelling the length of the country enables visitors the chance to peel through the different layers of culture; tasting the varied cuisines of Jordan and encountering locals while you spend glorious nights in local homestays. = The trail moves through major historical sites in the region such as Um Qais, Jerash, and Petra, while also harbouring hidden ruins resting amongst the land. 

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