Urban tourism focuses on experiencing culture, heritage and lifestyle of cities and is gaining momentum driven by increasing urbanization trends. Urban Tourism provides unique experiences to visitors through exploring varied attractions, monuments, vibrant culture, diverse cuisine and bustling street life of cities. Global urban tourism market is estimated to be valued at USD 6.98 TN in 2024 and is expected to reach USD 10.56 TN by 2031, exhibiting a compound annual growth rate (CAGR) of 6.1% from 2024 to 2031.
Urban tourism experiences involve visiting various landmarks, heritage buildings, street food tours, nightlife activities, art and culture festivals in cities. Growth in disposable incomes and increasing preference for unique experiences are propelling the demand for urban tourism across the world. Key Takeaways
Key players operating in the Urban Tourism market are URBAN TOUR , Intrepid Urban Adventures, MakeMyTrip, Yatra, ClearTrip, EasemyTrip, Expedia, Thomas Cook, Riya Group, Thrillophilia, Travel Troops Global Private Ltd., Flying Squirrel Holidays, SOTC Travel Limited, G Adventures, Hays Travel, Audley Travel, Go Travel, TransIndus , Travelex , Al Tayer Group. These players offer customized urban tour packages, online booking facilities and promote lesser explored cities and attractions. Urban Tourism Market Demand is fueled by growing urbanization, an expanding middle-class population, and the development of modern infrastructure and urban regeneration projects. Rising disposable incomes are also encouraging people to seek unique urban tourism experiences during travel.
Major cities across the world are leveraging their cultural heritage, art, lifestyle and nightlife to promote urban tourism. Many local governments are collaborating with global tour operators to design innovative urban tour packages and promote their distinct city experiences. This helps in boosting visitor footfalls and contributing significantly to the local economies. Market Key Trends
One of the prominent trends in the urban tourism market is increasing popularity of theme-based trails and tours. Tour operators are curating specialized tours covering street art, gastronomic experiences, literary walks, photography trails and heritage walks based on themes to attract visitors. This enables tourists to explore different facets of cities through immersive theme-based itineraries.
Porter's Analysis
Threat of new entrants: Urban tourism market already has number of established players making entry of new players difficult due to capital requirements and expertise needed. However, new technologies can help lower entry barriers.
Bargaining power of buyers: Buyers has high bargaining power due to presence of many players providing similar urban tourism offerings. Buyers can choose from various options lowering sellers ability to raise prices.
Bargaining power of suppliers: Suppliers of urban tourism services like local guides, transport providers etc have low bargaining power due to dependencies of existing players on their services and availability of substitutes.
Threat of new substitutes: Substitutes like rural tourism and adventurous tourism pose medium threat. However, urban tourism fills a different niche of interests that attracts certain traveler demographic.
Competitive rivalry: Intense competition exists among existing operators due to low product differentiation. Players rely on strong branding, reviews and unique offerings to gain an edge. Geographical regions in terms of value where urban tourism market is concentrated include regions with large metropolitan cities like North America, Western Europe and major Asian countries like China and India. These developed and developing regions attract significant number of both domestic and international urban visitors. The fastest growing region for urban tourism market is expected to be Asia Pacific due to rapid urbanization and rising incomes in major countries like China and India. Their large and growing middle class is driving strong demand for urban experiences and leisure travel within cities. Infrastructure developments and government initiatives to boost tourism are further pushing the region's growth. Geographical Regions
Urban tourism market witnesses highest value concentration in geographical regions with largest metropolitan urban centers worldwide. North America, represented by cities like New York, Los Angeles and Chicago, has been a mature urban tourism market. Western Europe, led by London, Paris, Rome and others, also account for significant share. Among developing regions, Asia Pacific region has emerged as the fastest growing for urban tourism. Major Asian countries like China and India are experiencing rapid urbanization paired with large population and growing incomes. Cities like Shanghai, Beijing, Delhi and Mumbai attract significant number of domestic and international urban visitors. Infrastructure developments and diverse cultural experiences are driving the Asia Pacific regions growth to outpace global urban tourism expansion. Other developing regions in Middle East and Africa are also witnessing steady increases in urban tourism but Asia Pacific remains the frontier for future opportunities.
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