Sustainable Tourism Market

Market Overview

The global sustainable tourism market size was valued at USD 2.8 trillion in 2023 and is projected to reach a value of USD 10.2 trillion by 2032, registering a CAGR of 15.2% during the forecast period (2024-2032).

The adoption of sustainable tourism practices by significant tourism organizations, a shift in passengers' desire for authentic, local experiences, and the rise in popularity of new forms of tourism are the primary market drivers driving Sustainable Tourism market growth. 

Sustainable tourism is a travel and tourist concept that prioritizes reducing negative environmental consequences, maintaining cultural heritage, and helping local people. It includes measures that encourage ethical tourism management, conservation of natural resources, and equal socioeconomic development. 

The sustainable tourism market share has grown significantly in recent years. The growing concern among the travel industry and visitors about reducing environmental impact and safeguarding natural and cultural heritage assets has increased demand for sustainable tourism practices. Furthermore, increased ecological concerns among individuals and severe government rules on sustainable development have contributed considerably to market growth.

However, the substantial initial expenses of implementing and certifying sustainable measures are a significant barrier to tourism enterprises. Nonetheless, increased eco-consciousness and sustainable development goals articulated by prominent organizations are projected to propel the industry ahead.

Key Highlights

• Coastal Tourism accounts for the largest share by type.
• Family generates the highest revenue share by application.
• Millennial dominates the market by age group.

Market Dynamics

Global Sustainable Tourism Market Drivers

Shift in Consumer Preference

Today's holidaymakers are increasingly seeking accommodations that value sustainability and environmental care. Eco-friendly hotels, resorts, and lodges are gaining appeal among environmentally concerned consumers looking to reduce their carbon impact when traveling. These accommodations frequently employ environmentally friendly techniques such as energy-efficient lighting, water conservation measures, garbage recycling programs, and renewable energy sources. 

According to Booking.com's 2023 Sustainable Travel Report, 76% of global travelers intend to travel more sustainably in the next 12 months. The research also discovered that 67% of passengers switch off air conditioning while not in use, and 60% reuse towels. Booking.com also awards the Travel Sustainable label to over 500,000 lodgings worldwide for their efforts to promote sustainability. As of February 2023, 80% of global passengers agree that sustainable travel is vital. This is due to heightened awareness of climate change and a trend in the travel sector toward sustainability. The number of eco-certified properties, such as those certified by programs like LEED (Leadership in Energy and Environmental Design) or Green Key, is growing globally. The Global Sustainable Tourism Council (GSTC) certifies accommodations that satisfy its sustainability standards, which include environmental, social, and cultural elements. 

Furthermore, consumers are increasingly drawn to travel brands and locations committed to sustainability and responsible tourism practices. According to a Nielsen study, 66% of consumers are prepared to pay more for products and services from firms prioritizing sustainability. This trend extends to the travel industry, as consumers are eager to invest in sustainable tourism experiences that reflect their values.

Global Sustainable Tourism Market Restraints

High Initial Investment

Sustainable tourism strategies usually include improving infrastructure to lessen environmental impact. For example, adding solar panels, rainwater harvesting systems, and energy-efficient appliances in hotels and resorts might be costly upfront. In 2022, the average cost of building solar PV systems worldwide was USD 876 per kilowatt. In the United States, the cost of installing solar panels in 2024 ranges from USD 25,960 to USD 36,960 before the federal tax credit and USD 18,172 to USD 25,872 with the credit. In India, a 1 kW solar panel installation costs between Rs 75,000 and Rs 85,000, whereas a 3 kW to 5 kW installation for an ordinary family costs Rs 2.20 lakh and Rs. 3.5 lakh. While these expenditures can result in long-term energy savings and reduced carbon footprints, the initial cost can be too expensive for many enterprises.

Furthermore, obtaining sustainability certifications from the Global Sustainable Tourism Council (GSTC) or Green Key necessitates significant investment in achieving demanding environmental, social, and economic standards. The procedure frequently includes extensive audits, operational modifications, and continuing monitoring. For example, the cost of LEED (Leadership in Energy and Environmental Design) certification for a hotel in the United States can range from USD 900 to USD 5,000, depending on the project size and certification level. The USGBC estimates that satisfying LEED requirements will cost between USD 20,000 and USD 60,000, depending on the project's complexity and scale and whether it is new construction or restoration. 

Global Sustainable Tourism Market Opportunity

Eco-Friendly Accommodation

There is a growing demand for eco-friendly lodgings that use sustainable techniques in their operations. This includes energy-efficient buildings, renewable energy sources, waste-reduction initiatives, and water-saving practices. Hotels and resorts that use these strategies can attract environmentally concerned guests and set themselves apart in the market.  Hotels established a goal of 25 hours. By the end of 2024, all 25hours Hotels will have received sustainability accreditation from an external institute. They've achieved some progress in 2021, from tree planting projects that help to preserve world biodiversity and introduce more sustainable food sources to lowering food surplus, the usage of single-use plastics, and more flexible mobility alternatives.  

Also, hotel energy management systems can reduce energy consumption by 36.6% to 59.7% per square meter. Green hotels have received notoriety for their dedication to energy conservation, water preservation, and waste reduction, which can result in significant cost savings. According to the United States Green Building Council (USGBC), LEED-certified buildings save up to 40% on energy and 20% on water expenditures. According to typeset.io, energy management systems in hotels can reduce energy consumption by 36.6% to 59.7% per square meter. Green hotels have received notoriety for their dedication to energy conservation, water preservation, and waste reduction, which can result in significant cost savings.

Regional Analysis

The global sustainable tourism market analysis is conducted in North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America.

North America Dominates the Global Market

North America is the most significant global sustainable tourism market shareholder and is estimated to grow at a CAGR of 15.0% over the forecast period. North America continues to dominate the sustainable tourism market, accounting for 35% of the total. The region, which includes the United States and Canada, has seen an increase in travelers' knowledge of environmental issues and a desire to make sustainable decisions. Furthermore, North America's sustainable tourism programs frequently prioritize preserving indigenous cultures and history. Responsible tourism methods seek to engage and support local communities, ensuring cultural diversity is valued and cherished.

Furthermore, major hotel companies, cruise lines, and tour operators have all embraced sustainable steps to lessen their environmental impact. The government also provides considerable assistance through legislation and programs that promote environmentally responsible tourism. Tourism boards actively promote sustainable places and experiences to conscientious American travelers. This has resulted in a significant and growing market share for the region.

Europe is anticipated to exhibit a CAGR of 14.9% over the forecast period, owing to a surge in demand for nature-based experiences, widespread visitor dissatisfaction, and rising environmental concerns. Some destinations create eco-friendly vacation packages to attract tourists while maintaining their natural surroundings in response to the increased demand for ecologically conscious travel and activities. 

In addition, according to the CBI (Ministry of Foreign Affairs), 15% of German tourists see nature as their main appeal. European governments and visitors have begun to pay more attention to sustainability issues such as plastic pollution, climate change, air and water pollution, land and water use, and the negative consequences of over-tourism on host communities. Furthermore, disposable money is rising, millennials and young people are increasingly interested in ecotourism, and leisure travel is expanding. 

Asia-Pacific is a rapidly rising market. Thailand, Indonesia, and Vietnam have an abundance of natural and cultural attractions perfect for sustainable tourism. With rising disposable incomes, Southeast Asia has seen an exponential increase in domestic and foreign tourist visits. Local communities are being trained to provide experiences highlighting natural heritage and indigenous activities while maintaining traditional ways of life. Some forward-thinking countries have created incentive programs to encourage environmentally friendly investments in tourism infrastructure. As a result, sustainable tourism is gaining traction throughout the region.

The Middle East and Africa holds a significant share. The conditions under which activities are done in Africa necessitate flexible and stable power solutions that allow it to go even further. The Middle East and Africa are also two of the most promising regions in terms of growth prospects for the military power solutions market. 

Segmental Analysis

The global sustainable tourism market is segmented based on type, application, and age group.

The market is further segmented by type into Coastal, Mountain, and Island Tourism.

Coastal tourism accounts for 40% of the sustainable tourism sector because of people's intrinsic affinity with beaches and the water. Coastal attractions allow visitors to unwind in a peaceful natural setting while admiring stunning sea views. The relaxing properties of waves make being near the water beneficial psychologically and physiologically for stress reduction. Many tourists are drawn to coastal areas for water-based activities such as swimming, surfing, fishing, and boating. The opportunity to engage in seaside culture enhances the overall experience. Small boutique resorts and homestays that merge effortlessly with the coastline allow travelers to feel connected to local people and immerse themselves in sustainable lifestyles. The growing wellness tourism industry also increases demand, as seaside places provide an excellent backdrop for holistic regeneration.

Mountain tourism appeals to people seeking adventure, nature, and cultural encounters in mountainous areas. Hiking, skiing, and learning about local cultures and wildlife are available. Sustainable mountain tourism seeks to safeguard fragile habitats, avoid deforestation, and minimize the environmental impact of tourism infrastructure. Efforts include encouraging environmentally friendly accommodations, sustainable waste management, and community-based tourism that benefits locals. 

The market can be bifurcated by application into Solo, Group, Family, and Couples.

The family segment represents 40% of the sustainable tourism market. Family travel refers to journeys taken by families, including parents and children, frequently focusing on educational and recreational activities. Sustainable tourism for families seeks to provide engaging experiences while teaching environmental stewardship. This involves visiting natural reserves, participating in wildlife conservation activities, and staying in environmentally friendly lodgings. 

Additionally, traveling with your family allows you to spend quality time together, bond, and create lasting memories. Sustainable locations appeal to families because they allow children to experience nature while learning in a safe, community-focused setting. Most sustainable resorts and homestays tailor services and activities to diverse family members' needs, from meals to amusement. The emphasis on local culture and minimizing environmental impact instills a sense of responsibility in families when traveling ethically. Multi-generational family visits are also rising as environmentally concerned baby boomers strive to instill community and ecological stewardship ideals in future generations.

The solitary segment is expected to grow at the fastest CAGR throughout the forecast period. Solo travelers seeking independence and personal improvement add to the growing demand for sustainable tourism. Solo travel refers to someone traveling alone, allowing for unique and flexible itineraries. Solo travellers frequently seek unique and engaging experiences like eco-friendly excursions, volunteer tourism, and cultural exchanges. Sustainable tourism for single travellers prioritizes safe, inclusive, and environmentally responsible solutions. Solo travelers can stay in eco-lodges and hostels and use sustainable transportation such as bike rentals and public transit. For example, groups such as WWOOF (World Wide Opportunities on Organic Farms) allow single travelers to labor on organic farms for food and shelter, supporting sustainable agriculture and cultural exchange.

The market is fragmented into Millennials, Baby Boomers, Generation X, and Silver Hair based on age group.

Millennials dominate the sustainable tourism business, accounting for 43% of the market due to their strong environmental awareness and social conscience. Millennials (born between 1981 and 1996) are noted for prioritizing experiences over material belongings and being more aware of social and ecological issues. This age group is highly interested in sustainable tourism techniques. They seek authentic experiences, eco-friendly accommodations, and activities that allow them to interact with local cultures while benefiting the environment. 

Having grown up in an era of increased climate change awareness, most millennials incorporate sustainability into their lives, including travel. They want to visit places supporting local economies while protecting the environment. Interacting with communities also fulfills their desire for unique experiences over mass tourism. Sustainable solutions enable millennials to travel responsibly based on their ideals. Some people are drawn to volunteer opportunities that allow them to contribute to conservation efforts. With a solid online presence, millennials persuade their peers to follow in their footsteps, accelerating the rise of sustainable tourism through word-of-mouth and consolidating it as future tourism.

Baby Boomers comprise a sizable share of the tourism sector due to their discretionary income and time availability. This generation appreciates comfort and ease but is becoming more mindful of the environmental impact of travel. Many Baby Boomers want sustainable travel experiences that combine relaxation and cultural enrichment, such as eco-friendly cruises, heritage excursions, and wilderness retreats. According to the AARP Travel Survey, 51% of Baby Boomers are prepared to spend more to ensure their travel choices are sustainable. This age group values extensive information and confidence regarding the sustainability practices of their preferred destinations and accommodations.

Recent Developments

• April 2024- The United Nations General Assembly recently convened a second theme event focused on tourism and the sector's vital role in furthering sustainable development and resilience.
• January 2024- CAF The global organization unveiled its new tourism strategy for Latin America and the Caribbean at FITUR 2024, signed agreements to promote sustainable tourism in Latin America, and set up a booth to boost the region's voice.