It is estimated that by 2040, the number of trips will continue to increase, reaching 2.4 billion travelers. The Mediterranean, as a cluster with the highest expected number of arrivals, will continue to be recognized for its mild climate, natural resources, rich history, and cultural heritage. For Croatia, membership in this cluster is a unique opportunity to capitalize on the collective appeal of the region and highlight its unique offerings.

The tourism industry has experienced transformative growth over the past few decades, evolving in response to socio-economic changes, technological advancements, and global events. By 2040, the tourism and travel sectors will undergo further significant changes, according to a study by Deloitte and Google that explores trends shaping the future dynamics of travelers and tourist sources and destinations, as well as implications for travel operators and industry stakeholders. Given the importance of tourism for Croatia’s economic opportunities, analyses from this global study can be applied to the further development of this sector in our country.

The tourism sector experienced strong growth from 1975 to 2019 (which was taken as the reference year instead of 2020 due to the impact of COVID-19). During this period, the number of international arrivals worldwide nearly doubled every fifteen years, reaching around one and a half billion travelers. This growth trajectory was temporarily disrupted by the COVID-19 pandemic, which caused a significant decline in travel activities. However, by 2023, global tourism had returned to 86 percent of the 2019 level, demonstrating the resilience of the industry.

From the 90s to 2023.

A closer examination of data on the countries from which tourists come reveals that European countries (in absolute numbers) have traditionally been the leading tourist sources. However, from 2010 to 2019, the growth in the number of tourists coming from the Asia-Pacific (APAC) region and Africa outpaced the average growth from other regions (8% and 6.8%, compared to an average of 4.8%) and significantly exceeded the growth of new tourists from Europe (3.8%), signaling a shift in global travel dynamics. By 2019, China had become the leading country of origin for tourists, reflecting its rapid economic growth, rising per capita income, and strengthening middle class. The COVID-19 pandemic altered these relationships somewhat, temporarily returning the US, Germany, and the UK to the top three positions in 2023.

As tourists gain more travel experience, the number of domestic/local trips per capita tends to decrease in favor of international travel. For long-distance international destinations, the processes of selecting the final destination and preparing for the trip are longer due to their complexity and longer stays. Regarding accommodation, hotels are the main preference for guests coming from distant destinations, with around 80 percent of tourists relying on this type of accommodation. For tourists coming from closer and medium-distance countries, alternative accommodations such as rentals are becoming increasingly popular among travelers’ preferences (15%). From Croatia’s perspective, this means that attracting guests from global regions with the highest growth of new tourists (which are overseas countries) requires an increase in higher-category hotel capacities.

Vision for 2040.

As we look ahead to 2040, several key trends are expected to shape the future of travel and tourism. Namely, future growth in travel globally will largely depend on the growth of the middle-class population. An analysis, which includes about 20 additional variables, estimates that by 2040, the number of trips will continue to increase, reaching 2.4 billion travelers. Due to the increased frequency of travel, the highest number of tourists in 2040 will come from five countries: China, the United States, the United Kingdom, India, and Germany. On the other hand, Pakistan, Brazil, Saudi Arabia, Indonesia, and Mexico are expected to enter the top fifteen countries from which the largest number of tourists will come, primarily driven by the growth of their middle class.

The future of tourist destinations is equally dynamic, with predictions that several regions will emerge by 2040. Specifically, the study emphasizes that in the upcoming period (2019 – 2040), European countries will receive the largest share of tourists, with more than 362 million incremental guests (38% of the total), followed by countries in the APAC region, which will exceed 278 million incremental tourists (30%). Furthermore, greater segmentation in capturing market share is observed, mainly because the Middle East and Africa are growing at a faster pace (3.5 – 5% CAGR; compared to Europe, which will grow at 2% CAGR).

Emerging destinations are part of broader regional clusters identified as key growth areas, which are suggested to represent 45 percent of all visits by global travelers/tourists by 2040. These include the Mediterranean (480 million), Southeast Asia (255 million), the new Middle East (175 million), and the Caribbean (145 million).

Mediterranean Cluster

The Mediterranean, as a cluster with the highest expected number of arrivals, will continue to be recognized for its mild climate, exceptional natural resources, rich history, and cultural heritage. For Croatia, membership in this cluster is a unique opportunity to capitalize on the collective appeal of the region while highlighting its unique offerings. To maximize this opportunity, Croatia must continue to invest in its tourism infrastructure, enhance its cultural and natural attractions, and collaborate with neighboring countries to promote the Mediterranean as a unique, diverse destination.

Those who wish to participate in the future of tourism must recognize the importance of adapting to the new market dynamics, embracing technological advancements, and committing to sustainability. As we approach 2040, countries with successful tourism industries will be those that anticipate changes, respond agilely, and place the traveler at the center.

Strategies for Croatian tourism operators: Six key trends they must adapt to

Diversification of source markets. Europe will remain a key source market, but Croatia must also focus on attracting travelers from developing markets. It is expected that by 2040, the global middle-class population will significantly increase, and countries such as China, India, Pakistan, South Korea, Brazil, and Indonesia are becoming increasingly important markets. For Croatia, this means the need to adapt marketing strategies and tourism offerings to attract this new demographic. This will require targeted marketing campaigns, partnerships with travel agencies in those regions, investment in language and cultural training for service providers, and strengthening digital marketing efforts to reach potential travelers in those developing markets.

Investment in technology. Embracing technological innovations will be crucial for enhancing visitor experiences and maintaining Croatia’s competitive edge. This includes adopting AI-driven customer support tools, virtual reality (VR) experiences that allow potential visitors to virtually explore Croatian destinations before booking, and real-time translation services that break down language barriers. Additionally, Croatia should explore advanced data analytics to gain insights into traveler/tourist behavior and preferences, enabling more personalized and effective marketing strategies. Moreover, the trend towards hyper-personalization will continue to gain momentum, driven by the increasing availability of data and advancements in artificial intelligence. Furthermore, technology can help Croatia promote lesser-known destinations, spreading tourism more evenly and reducing pressure on popular spots like Dubrovnik and Split.

Development of new business models. The proliferation of new business models, such as subscription-based travel and experiential tourism, will challenge traditional revenue streams and require Croatian tourism companies to continuously innovate to stay ahead. As specific experiences become key to tourism, collaboration between different industries – such as hospitality, entertainment, and technology – will enable operators to offer unique, integrated experiences that address tourists’ expectations.

Promoting sustainability. As travelers become more environmentally and socially conscious, demand for sustainable tourism options is expected to rise. Croatia’s commitment to sustainability should be at the forefront of its tourism strategy. This includes not only improving waste management of all types and protecting natural and cultural resources but also promoting sustainable tourism practices among visitors. Developing eco-friendly accommodations, promoting local products and services, and implementing policies that minimize the impact of tourism on the environment are essential components of this strategy. Furthermore, Croatia should actively participate in global sustainability initiatives and position itself as a leader in sustainable tourism in the Mediterranean region.

Improving infrastructure and connectivity: To adapt to the expected increase in incoming travel, Croatia must continue to improve its tourism infrastructure. This includes continuing to expand airport capacities, enhancing transportation infrastructure – especially railways and bus stations, where we lag the most – and increasing the number and quality of hotel accommodations and tourism services. Additionally, Croatia should focus on improving connectivity with countries experiencing the fastest growth in incoming travelers/tourists, enabling travelers from those regions to visit our country more easily.

Leveraging strategic partnerships: Collaboration with regional partners will be key for the Croatian tourism industry. This includes partnerships with other Mediterranean countries in promoting the region as a unique destination, as well as alliances with global travel agencies and technology companies to enhance the (digital) visibility of Croatian tourism offerings. By working together, these partnerships can create synergies that benefit all parties involved and stimulate greater tourism growth.