Niche tourism has been a significant development in the travel sector and is now considered “critical for companies seeking to attract 21st-century travellers,” according to a new report.

GlobalData’s Niche Tourism report contends that the category can now be considered mainstream having evolved as a result of brands trying to distinguish themselves from competitors and profile-raising exposure on social media.

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“This sector shares many characteristics with the experience economy, given that niche tourists are in constant pursuit of engaging and unique experiences that align with their specific interests,” the report says. “In recent years, mainstream holiday providers have pinpointed niche tourism as an area ripe for growth. As a result, niche tourism is no longer the exclusive domain of small, independent firms.

TUI Group and Expedia are among the major players to have invested heavily in niche tourism. German conglomerate TUI has acquired numerous small tour operators and travel agencies specialising in areas like food and wine, skiing, adventuring and ‘dark’ history, for example, while the ‘Expedia Local Expert’ allows tourists to personalise their trips by selecting activities that differ by destination.

With this in mind, the report notes: “Niche tourism should not be misconstrued as synonymous with ‘small’. Numerous niche tourism markets boast significant followings, including agritourism, ecotourism, cruises and ski tourism.

“Recognising the potential, large travel corporations have increasingly embraced niche tourism, acknowledging its industry-wide relevance rather than relegating it to the realm of smaller enterprises. Prominent attractions and vacation providers have pinpointed niche tourism as an avenue for expansion.”

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The report points to social media as a key growth driver of niche tourism, noting that visually striking destination in particular have benefitted, in part, it suggests, due to a desire among people to share compelling photos online. It gives the Tulip Fields in the Netherlands and Skógafoss Waterfall in Iceland as two examples of places that have benefitted from their “iconic visuals” in this way.

The report adds: “Industry themes such as online travel, the experience economy, the influence of word-of-mouth, and social currency – coupled with the impact of Generation Hashtag (millennials/Gen Z) – have accelerated niche tourism’s growth. Companies have moved away from the ‘one-size-fits-all’ approach, identifying specific niches within the market, which has become an umbrella term in itself. Consequently, large mainstream companies have adapted.”

It is also outlined that the trend towards niche travel is particularly evident in the hotel sector. The report notes that, historically, many independent hotels and accommodation providers have faced challenges in differentiating themselves but that the popularity of boutique hotels has surged in recent years.

“These establishments offer tourists a distinct experience, diverging from the standardised layout and format of typical hotel chains,” it says. “Boutique hotels often provide more personalised service and unique facilities that reflect the local culture or architecture. They tend to forge a closer connection with the local area, offering a more authentic representation of the destination’s culture and values.

“For example, a boutique hotel may feature an artisan bakery, café, or restaurant that exclusively uses local and organic ingredients. The venue might offer a more intimate atmosphere with local music or dance performances for entertainment. These elements allow the hotel to deliver a niche tourist experience while distinguishing itself from the market, thereby enhancing the value of the tourist’s stay.”

Looking ahead, the report forecasts that the travel sector will continue to offer more meaningful experiences.

“Many established travel and tourism enterprises, including hotels and airlines, are striving to foster greater brand loyalty,” it says. “Consequently, we can anticipate innovative modifications to the ‘traditional’ travel product.”