In this article, we shall discuss the 20 countries that have the potential to be major tourist destinations. To skip our detailed analysis of the global tourism industry in 2024, go directly and see 10 Countries That Have The Potential To Be Major Tourist Destinations.
Global Tourism Industry Outlook: Key Trends
According to World Tourism Barometer by the WTO, international tourism ended 2023 by reaching 88% of pre-pandemic levels, with more than 1.3 billion people engaging in outbound travel. The release of remaining pent-up demand, enhanced air and rail connectivity, and a robust recovery of Asian markets and countries that have the potential to be major tourist destinations is expected to catalyze a complete recovery by the end of 2024. According to a report by Deloitte, there are five major trends which are expected influence the travel industry in 2024, one of them being the meteoric rise of automated bookings. Although automated bookings are hardly a new phenomenon in travel, they are expected to skyrocket in 2024 and beyond, with the online booking market expected to reach $833 billion by the end of 2025 from $432 billion at the end of 2022. Closely related to this trend is an increased use of mobile phones, with the report citing that more than 70% of the global consumer base uses smartphones to make travel reservations. Furthermore, more than 72% of bookings take place within 48 hours of the first Google search. Thus, major players in the travel industry like Booking Holdings Inc. (NASDAQ:BKNG), Airbnb Inc. (NASDAQ:ABNB), and Expedia Inc. (NASDAQ:EXPE) are divesting greater investments in targeted advertisements to effectively engage with the consumer’s attention. Furthermore, these companies realize the short window they have to efficiently retarget customers with appropriate display ads based on prior activity and engagement.
Thirdly, corporate travel is looking at a strong resurgence in 2024 and is expected to reach more than 95% of pre-pandemic levels by the second half of 2024, although gains are decelerating. With macroeconomic and geopolitical headwinds disrupting operations in countries that have the potential to be major tourist destinations, business leaders are relatively much more stringent with travel spending in 2024. Although they recognize the significance of trips in fostering client relationships and facilitating cross-vertical collaboration, costs still emerge as a significant concern. More than 86% of corporate travel managers cite airfare as one of the biggest factors affecting companies’ lack of willingness to travel. Despite this, US corporate travel spending is still expected to cross pre-COVID levels by the end of 2025.
According to McKinsey, more than 71% of consumers expect travel companies to offer personalized solutions and interactions, with more than 76% of consumers reporting frustration when this demand is not met. Thus, in a bid to win over the market, companies are ensuring that their interactions with consumers are tailored to their unique needs and preferences. Furthermore, it is also essential that advertisements target consumers’ prior interactions, making consumer data invaluable for companies. Lastly, skyrocketing interest rates and elevated costs in countries that have the potential to be major tourist destinations have made it incredibly expensive to upgrade hotel and airline experiences. In a bid to navigate macroeconomic headwinds, companies are making continued investments in back-office technology and generative AI which may enhance operational efficiency and better align resources to demand.
As companies continue to capitalize on these trends, investor sentiment around major travel stocks continues to rise. One way to gauge increasing investor interest in the travel industry is by evaluating the performance of prominent travel-focused ETFs like Amplify Travel Tech ETF (NYSE:AWAY), which gives investors direct access to technology-focused equities within the global tourism industry. The ETF seeks investment results which mirror total return performance of the Prime Travel Technology Index NTR, and as of April 25, has more than 31 holdings including major players like Booking Holdings Inc. (NASDAQ:BKNG), Airbnb Inc. (NASDAQ:ABNB), and Expedia Inc. (NASDAQ:EXPE). In the last one year, the fund is up by more than 19.12% as of April 25. Another major travel-focused ETF is the Harvest Travel & Leisure Index ETF (TSE:TRVL), which provides investors with exposure to the growth trends in the travel industry driven by structural, demographic forces in countries that have the potential to be major tourist destinations. With more than 30 equities under management including prominent players like Booking Holdings Inc. (NASDAQ:BKNG), Marriot International Inc. (NASDAQ:MAR), and Hilton Worldwide Holdings Inc. (NYSE:HLT), the fund is up more than 6.93% year-to-date as of April 25.
Travel in the Metaverse: An Analysis
According to a report by McKinsey, the global travel industry is incredibly well-positioned for a virtual disruption. As the metaverse – a collective space wherein physical and virtual dimensions converge to generate a more immersive, interactive experience – becomes cheaper and faster to implement, if driven by proactive advertising and virtual events, could provide for a $20 billion opportunity by 2030, even in countries that have the potential to be major tourist destinations. As innovative formats become more common, new economic models are coming to the foreground. The travel experience of the future is expected to neither be completely online nor be a solely physical experience. Instead, companies across the world like Booking Holdings Inc. (NASDAQ:BKNG), Airbnb Inc. (NASDAQ:ABNB), and Expedia Inc. (NASDAQ:EXPE) are gearing for a more hybrid orientation, with virtual events, edutainment, and inspiration carefully balanced and integrated with physical destinations. One major way in which companies are dealing with this complexity is by implementing a traveler-first mentality. By empathizing with their target tourist, companies are able to better identify opportunities to integrate relevant virtual aspects.
During the pandemic, there was substantial global gravitation towards virtual concerts with significant surges in consumer demand, spending, and audience numbers. In 2020, the metaverse made up for a mere 0.1% of all live-music spending; by 2021, this figure has multiplied by ten-fold. According to the report, virtual events could make up for more than 20% of revenues by the end of the decade, owing largely to increased audience capacity at a fraction of the cost. With the metaverse expected to revolutionize multiple aspects of the global economy especially with regards to countries that have the potential to be major tourist destinations, travel is no exception, with virtual events promising enormous potential for the industry as a whole. However, in the short-term, opportunities may be fairly limited for a select key touchpoints, namely travel inspiration, events, and edutainment. End-to-end travel experiences are still further down the road.
Our Methodology
To compile our list of the 20 countries that have the potential to be major tourist destinations, we decided to create Insider Monkey’s Tourism Potential Index by considering a conference paper from the 28th World Business Congress at the University of Cyprus. The paper used the Delphi technique to run a predictive analysis of future tourism and hospitality scenarios in different states. The paper identified three primary metrics through which the tourism potential of a particular country can be gauged, namely infrastructure and development, cultural heritage and attractiveness, and security. We decided to integrate this study with another research by Bloom Consulting, which measures the nation brands of countries in order to predict the international perceptions and reputation countries may have over a specific time period. Hence, to create Insider Monkey’s own tourism potential index, we decided to consider four primary metrics, namely infrastructure and development (25 points), cultural heritage and attractiveness (25 points), security (25 points), and international perception and reputation (25 points).
Firstly, we decided to use the index in our article on the 40 Least Visited Countries in the World in order to shortlist 100 countries with low tourism numbers. In order to determine the tourism infrastructure in each country, we decided to use the index in our articles 30 Most Walkable Cities in the World and Top 20 Countries with the Best Roads in the World. In order to determine cultural heritage, we decided to use our article on the 35 Best Destinations in the World for Cultural Tourism. To determine security, we looked at the index in our article 30 Safest Countries in the World in 2024. Finally, in order to determine international perception and reputation, we decided to use Bloom Consulting’s predictive analysis of nation brand value in the coming years.
We created primary rankings for each metric by listing the top 50 countries in each of the four areas, namely infrastructure and development, cultural heritage and attractiveness, security, and international perception and reputation. As expected, there was significant overlap amongst all four primary lists. Then, we assigned points to each country based on their relative position in each primary list. For instance, if a country ranked number 1 on a list, it received 25 points. If it ranked second, it received 24.5 points, and so on. We then tabulated the total number of points scored by each country out of 100 to arrive at a cumulative score for each entry. We then ranked each entry based on these cumulative scores, from lowest to highest.
By the way, Insider Monkey is an investing website that tracks the movements of corporate insiders and hedge funds. By using a similar consensus approach we identify the best stock picks of more than 900 hedge funds investing in US stocks. The top 10 consensus stock picks of hedge funds outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). Whether you are a beginner investor or a professional looking for the best stocks to buy you can benefit from the wisdom of hedge funds and corporate insiders.
20 Countries That Have The Potential To Be Major Tourist Destinations
20. Albania
Tourism Potential Score: 60.4
There are various reasons which suggest that Albania has the potential to become one of the top tourist destinations. The country is home to beautiful landscapes, as well as some cultural heritage spots that have been identified as UNESCO World Heritage Sites.
19. Romania
Tourism Potential Score: 63.6
While visiting Romania, one can engage in a wide range of outdoor activities at any time of the year, including hiking, dog-sledding, and biking. This increases its chance of becoming a major tourist destination in the future.
18. El Salvador
Tourism Potential Score: 69.2
Initially, El Salvador was not considered to be a safe country; however, over the years, the country has been making efforts to improve its safety situation. The country is known primarily for its beautiful coastline and plenty of volcanoes, and thus makes our list of countries that have the potential to be major tourist destinations.
17. Mauritius
Tourism Potential Score: 60
Mauritius is considered to be an extremely safe country for tourists since the crime levels are low. It is known to be one of the most peaceful countries in Africa. The people of Mauritius are known to be extremely friendly and warm.
16. Kenya
Tourism Potential Score: 61.4
In recent years, the tourism infrastructure has developed greatly in Kenya, which includes the development of hotels and adventure activities for tourists. The country is mainly known for its wilderness and national parks, and thus makes our list of countries that have the potential to be major tourist destinations.
15. Iran
Tourism Potential Score: 71.8
Despite its history of political conflict, Iran has the potential to become a travel destination in the near future. The country is home to various ancient cities including Persepolis and Hamedan. Additionally, it also offers a multitude of activities to its visitors, like skiing and sunbathing.
14. Tanzania
Tourism Potential Score: 73.6
The National Tourism Policy in Tanzania aims to promote the livelihood of people by developing sustainable tourism practices and encouraging quality tourism. Additionally, the people of Tanzania are known to be extremely hospitable and warm.
13. Zambia
Tourism Potential Score: 75
Even though Zambia is one of the most-visited countries, it has the potential to become a major tourist destination in the coming years. The country is primarily known for Victoria Falls and National Parks.
12. Botswana
Tourism Potential Score: 76.2
Botswana is known for its diverse and unique wildlife experience, which includes lions, elephants, cheetahs, and zebras. Botswana consistently makes efforts to protect its wildlife, which may attract many tourists in the coming years.
11. Namibia
Tourism Potential Score: 79.8
Namibia is one of the safest countries in Africa and is slowly working towards developing and expanding its tourist infrastructure including tour operators and hotels. The country is also home to extremely diverse landscapes, and hence makes our list of countries that have the potential to be major tourist destinations.
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Disclosure: None. 20 Countries That Have The Potential To Be Major Tourist Destinations is originally published on Insider Monkey.