How hoteliers can ride the revival of domestic tourism

The tourism and hospitality sector are growing precipitously – but what has often gotten lost amidst the din is the extraordinary revival of domestic tourism. According to McKinsey’s recent report on the state of the sector, in 2023 75% of trips worldwide were taken domestically. Even in Western Europe this figure sits at 58%. Domestic travel is set to grow further still, reaching 19 billion lodging nights per year by 2030. 

Hoteliers should act now to reap the advantages. In doing so, hoteliers should bear the changing tastes of domestic travellers in mind. Domestic travellers now prize local immersion, a social conscience, and environmental sustainability.

In addition, hotels should make a renewed effort to appeal to younger customers, who are currently more likely to go overseas for their vacations – but certainly could be tempted by the right kind of holiday experience within their own country.

A local touch

As part of their overall sense of social responsibility, hotels should (of course) reach out to the community around them. Increasingly, though, this also carries a substantial commercial benefit. Domestic travellers now want to be more immersed in their holiday destinations. According to a new study by the sector observer Mabrian, tourists now feel that local immersion is almost as important to them as traditional holiday activities. 

Hoteliers can meet this new demand by partnering with the community writ large. For starters, hoteliers can source their ingredients locally. Guests not only appreciate local produce, but this also helps hotels build strong working relationships with local businesses. At Burgh, we source 80% of our ingredients from within a 30-mile radius of the hotel, offering guests the very best of Devon.

The same applies to the culture and heritage of an area, which guests are keen to immerse themselves in. Hotels can partner with local tour guides, galleries, stately homes, or museums to provide tours and other experiences to guests.

Tourism with a conscience 

Tourists, domestic and otherwise, are also becoming more concerned about the impact of their holidays. They want their vacations to be as carbon neutral as possible, and are concerned about the effects of possible ‘overtourism’ – when polled, 50% of people said that they would be willing to pay higher prices for more sustainable holidays. To fully benefit from the revival of domestic travel, hoteliers should aim to answer these concerns in what they offer to guests.

Hoteliers can take active measures to show that sustainability is important to their operations. At Burgh Island, we have taken a number of steps in this direction. We have installed solar panels on our disused tennis courts. We make sure that all recyclable waste is in fact recycled, and are always on the lookout for ways to minimise our water and energy use while maintaining guests’ experiences. The lights in our hotel all use energy-efficient light bulbs, and our outdoor lighting uses timers to prevent waste.

Hotels can also help mitigate the effects of possible overtourism. One way is to make sure that tourism brings concrete benefits to local communities. Sourcing from local providers, for example, is a way to make sure that the surrounding area shares fully in the financial benefits of tourism.

Indeed, hotels that cater mainly to the domestic market are uniquely capable of answering concerns about overtourism. These hotels are often small and boutique, and so do not overawe the local area. For instance, Burgh Island is a cosy establishment of just 25 rooms. 

Hotels like these can offer guests a relaxing getaway that does not place an undue burden on the local community.

The rise of staycations

Hoteliers looking to take advantage of the growth in domestic tourism should also look to younger customers. McKinsey’s recent report showed that younger tourists take an equal number of domestic and foreign trips – despite, on average, having less disposable income than other age groups.

This is far from inevitable. The British hotel sector has shown that it’s able to attract younger guests. This was demonstrated by the growth of ‘staycations’ over the last decade or so – driven almost exclusively by millennial holidayers looking for a change of pace.

For younger tourists, what’s appealing about a staycation is its potential as a true detox, away from the hubbub of daily life, as well as from often-overcrowded traditional holiday hotspots. The sector should double down on this advantage, attracting a younger clientele by offering them a relaxed and tranquil lacuna from the ordinary hustle and bustle. 

Domestic tourists now demand trips that are sustainable, relaxed, socially conscious, and embedded in the destination. As domestic tourism makes its great comeback, hoteliers would be wise to adapt their services and facilities to reap the benefits.