Airbnb reported a 22% jump in bookings to secondary cities in Q2 2026, outpacing growth in its traditional beach‑town portfolio.
The emerging‑destination wave will eclipse classic resorts as the primary driver of travel‑industry returns through 2027.
The data shows that investors chasing the next wave of tourism growth are ignoring a well‑documented shift: travelers are gravitating toward authentic, off‑the‑beaten‑track experiences, and capital is following.
Consensus Is Chasing the Same Old Beaches
Industry analysts at Euromonitor and Bloomberg routinely project double‑digit returns for established beach hubs like Cancun, Bali, and the French Riviera. Euromonitor’s 2024 outlook cites a 4.3% CAGR for these markets through 2028, while Bloomberg’s travel index assigns them a "stable‑growth" rating.
That narrative rests on two flawed premises. First, it assumes that post‑pandemic demand will revert to pre‑2020 patterns. Second, it treats historical occupancy rates as a reliable proxy for future profitability.
Both premises crumble under recent data. Expedia’s 2025 earnings call revealed that its “core” beach‑segment revenue grew a modest 1.8% YoY, far below the 5% growth the consensus expected. Meanwhile, Trip.com disclosed that its bookings for Tier‑2 Asian cities rose 31% in 2025, dwarfing the modest gains in its flagship beach listings.
Investors who cling to the beach‑centric thesis risk overpaying for saturated assets while missing the upside in emerging locales.
Four Pillars Prove the Emerging‑Destination Thesis
First, UNWTO’s 2025 regional forecast shows Asia‑Pacific tourism arrivals growing 5.2% YoY, driven largely by secondary cities in Vietnam, the Philippines, and Indonesia. This outpaces Europe’s 3.1% rise, which is anchored in traditional hubs.
Second, venture‑capital funding for niche travel platforms surged to $12 billion in 2023, with 45% earmarked for companies that specialize in lesser‑known destinations. Klook raised $800 million in a Series E round, explicitly targeting “undiscovered” markets in Southeast Asia.
Third, corporate travel spend is migrating to regional hubs. A 2024 B2B travel spend report from Deloitte shows that 38% of business‑travel bookings now originate from Tier‑2 cities, up from 22% in 2020.
Fourth, infrastructure upgrades are accelerating in these markets. The Indonesian government announced a $3.5 billion investment in airport capacity for Lombok and Labuan Bajo, projected to lift tourist arrivals by 1.8 million by 2027.
This shows that demand, capital, and supply are aligning around emerging destinations, creating a virtuous cycle that will outpace traditional beach markets.
Infrastructure Lag
Critics argue that inadequate infrastructure will choke growth in secondary locales, citing the 2023 World Bank report that 62% of Tier‑2 airports lack modern amenities.
The data suggests that this risk is already being mitigated. Public‑private partnerships in Kenya and the Philippines have cut average airport upgrade timelines from five years to under two, according to a 2024 McKinsey travel‑logistics study.
If a sudden policy reversal stalls these projects, the thesis would need to be revisited. But current execution speed makes that scenario unlikely.
Implications for Stakeholders
Stakeholders who act now can lock in outsized returns before the market corrects.
Institutional Investors
Allocate a minimum of 15% of travel‑sector exposure to emerging‑destination platforms. Funds such as Sequoia Capital have already earmarked $200 million for a “next‑gen tourism” vehicle focused on Africa and South‑East Asia.
Watch for the Q3 2026 earnings releases of Klook and GetYourGuide; a combined revenue beat will signal that capital is flowing into the right niche.
Enterprise Buyers
Shift corporate travel policies to prioritize Tier‑2 city hubs for cost‑effective meetings. Companies like Siemens have piloted a “regional‑first” travel rule, cutting travel spend by 12% in 2024.
Track the adoption rate of the new SAP Concur “Emerging Destinations” module, slated for rollout in November 2026. Early uptake will validate the shift.
Product & Engineering Teams
Build APIs that surface micro‑destinations, leveraging open‑data feeds from local tourism boards. Expedia’s recent API launch for “Hidden Gems” saw a 27% increase in third‑party integrations within two months.
Prepare for the Q1 2027 release of the Google Travel “Local Explorer” beta, which will embed real‑time availability for emerging spots directly into search results.
Two Bold Predictions
By December 2026, bookings to Tier‑2 Asian cities will exceed those to the top three beach destinations combined, as measured by Booking.com’s market share report.
By June 2027, venture‑capital funding for emerging‑destination platforms will surpass $15 billion annually, with Klook and GetYourGuide each crossing the $2 billion revenue threshold.
Both outcomes will cement the emerging‑destination thesis as the dominant narrative for travel investment.
Will the shift hurt established resort operators?
Resort chains like Marriott will feel pressure, but they can pivot by acquiring boutique operators in secondary markets. Marriott’s 2025 acquisition of a 30‑property portfolio in Vietnam already shows this adaptation.
Are regulators likely to restrict growth in emerging markets?
Regulatory risk exists, yet most governments are actively courting tourism dollars. The Philippines’ 2024 tourism bill, which streamlines visa processes for 15 new destinations, illustrates a pro‑growth stance.
Can the data be skewed by short‑term post‑pandemic curiosity?
Short‑term spikes are accounted for in the UNWTO’s multi‑year trend analysis, which still projects a 4.7% CAGR for emerging locales through 2029, well above the 2.9% for traditional resorts.
For deeper market intel, visit MarketIntel. Additional sources include the UN World Tourism Organization and the McKinsey Travel Insights