Home Travel Industry Complete Overview of the 5 Sectors in the Tourism Industry

Complete Overview of the 5 Sectors in the Tourism Industry

Complete Overview of Sectors in the Tourism Industry in 2023
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14 min.

The tourism industry is one of the most dynamic landscapes. That’s primarily because it consists of several unique sectors. Each one of these sectors goes through comprehensive changes and is subject to many factors. 

Tourism Industry dynamic landscape

Nevertheless, understanding these sectors is quite essential! Why? Because it can help you make informed business decisions, identify valuable growth opportunities, future-proof your travel brand, and, ultimately, set it up for success.

That’s because the industry encompassing various segments that work together to create a seamless travel experience. These tourism sectors include transportation, accommodation, food and beverages, recreation and entertainment, and travel services. Let’s dive deeper into each of these sectors to understand their impact and significance.

Overview of the sectors in tourism

The tourism vertical is quite extensive. It consists of six sectors, making it one of the most diverse industries. These sectors are transportation, accommodation, food and beverage, travel agencies, and attractions. Let’s take a closer look at the sectors, their sizes, and their economic impact.

Transportation in Tourism

Transportation in tourism is a big sector. It encompasses a wide range of forms of travel and enables tourists to reach their destinations safely and efficiently. The sub-sectors include air travel, land transportation and maritime travel, each playing a vital role in the tourism sectors. Efficient and reliable transportation services are essential for a positive travel experience.

Transportation in Tourism

When it comes to inbound tourism, air travel comprises the largest share, 57%. Travelers trying to reach faraway destinations often choose from various travel options. One can actually gauge the momentum of the tourism sector recuperation after the COVID-19 pandemic by looking at air transportation trends. The latest report states that total air traffic is up by 52% compared to 2022

Land transportation for tourists has been increasing in recent years. A recent study reveals that car transportation makes up 77% of all journeys. The reasons that explain this trend are flexibility, price, and independence. 

Maritime travel or cruise tourism is also experiencing steady growth. This subsector is estimated to continue to grow at a CAGR of 10.4% from 2022 to 2031.

Transportation is one of the pillars of the tourism industry, and as such, it has a tremendous economic impact on the vertical – its efficient functioning is critical for not only attracting tourists to destinations but also enabling them to reach their desired locations. It allows companies to generate revenue through ticket sales. However, by enabling tourists to reach their destinations, it also drives economic activity in hospitality.

Accommodation in Tourism

All the lodging options tourists can choose from comprise the accommodation subsector of the tourism industry. It includes hotels, resorts, hostels, vacation rentals, Airbnb, and more. 

Accommodation in Tourism

The hotel occupancy rates metric is the best one to keep track of the developments in this subsector simply because there are almost 750,000 hotels and resorts worldwide. In April 2022, hotel occupancy rates were highest in the Americas, reaching 64%. Europe was in second place with the hotel occupancy rates at 63%, followed by the Middle East and Africa at 49% and the Asia Pacific at 48%. 

When it comes to the economic impact, the best metric to track is revenue per available room or RevPAR. The RevPar reached $93.27 in 2022, an 8.1% increase compared to 2019. The average daily rate is up by 13.6%, which makes $148.83 for the same period. Occupancy rates are still not at the pre-pandemic level, but with only a 4.9% difference, they are getting there. 

The revenue this sector generates has a tremendous impact. The money is used toward creating new jobs, developing infrastructure, and boosting local economies. Local communities and governments also benefit from the taxes and fees collected from accommodation providers. 

Food and Beverage in Tourism

The food and beverage tourism sector is quite diverse and doesn’t just include restaurants and cafes. It also encompasses various dining establishments where tourists can experience local culinary traditions and cuisine.

Food and Beverage in Tourism

According to the National Restaurant Association research, the sales in the fine dining segment to travelers and visitors went down by 41%. However, total restaurant industry sales are projected to reach $.1.2 trillion by 2030, and traveler purchases will significantly contribute to this positive development. The food tourism market is projected to reach $1,796.5 billion by 2027 in size, which is a 16.8% growth given that its size in 2022 is $1,116.7 billion. 

One of the most extensive studies done recently encompassed the data from over 50,000 travelers to conclude that 64% of travelers base their traveling decisions on the food and drink options available at their destination. 

There are two sides to the economic impact of food and beverage in tourism. First, it helps generate more direct revenue, and second, it fosters culinary entrepreneurship and can significantly boost agricultural and food production sectors. It can also help create more job opportunities.

Travel Agencies and Tour Operators 

Travel agencies are travel brands that specialize as intermediaries. They provide tourists with access to accommodation and other tourism options. Travel agencies can also offer various services, such as tour packages, accommodation reservations, and transportation booking

Travel Agencies and Tour Operators

Online travel agencies or OTAs are currently dominating this space. In 2022, the online global travel market size reached $475 billion and is projected to reach over one trillion US dollars by 2030. OTAs, including the most significant players such as Booking.com, Trip.com, and Expedia, captured over 40% of the total market

While travel agencies continue to generate revenue, it’s important to note that global travel agency revenue is growing at a CAGR of 2.5%

Travel agencies, both offline and online, are vital parts of the entire travel ecosystem. They both contribute to the whole sector and facilitate tourism overall. Travel agencies stimulate economic activity through other sectors as they are responsible for actually funneling tourists to destinations. They also help create new jobs, improve travel satisfaction, and ensure repeat business.

Tour Operator

Tour operators, the companies that create packages for travel agencies to sell, also make up a sizable sub-sector. The market size of the tour operators industry in the US in 2022 was $8.6 billion. The US market will continue to grow at a CAGR of 17% to reach $30 billion in size by 2023. Across the ocean, we have Europe, with its tour operator market size projected to reach $74 billion by 2026, with Germany as the leader in the field with a market size of $24 billion.

Tourism Attractions

Tourism attraction is a place of interest. Generally speaking, tourism attractions’ primary role is to attract tourists to a particular destination. It can be anything from natural wonders and historical sites to museums and cultural landmarks. 

Tourism Attractions

According to the latest data, the most visited attractions are spread across the globe. These include Nagashima Spa Land, Japan; Universal Studio, USA; Palace of Versailles, France; and Bourbon Street, USA.

Theme parks are also among the most popular tourist attractions. In 2022, these parks attracted almost 200 million visitors. The museums are right behind theme parks, with an attendance of 57 million. 

Tourism attractions also have a significant economic impact. They support jobs in the vicinity, boost local economies, and positively impact the overall tourist experience. They are also the number one factor that often drives visitation. 

The interplay of sectors in tourism

The most important thing to understand about sectors in the tourism industry is that they are not separated from one another. In fact, the interplay of sectors in tourism is quite elaborate and happens on so many different levels. 

The interplay of sectors in tourism

Let’s start with transportation. The affordable, dependable, and reliable means of transportation can facilitate visitation. Transportation is also responsible for the tourist experience. It can improve access to tourism attractions, make tourism agencies more attractive, and drive sales in the accommodation and food and beverage sectors. 

Accommodation in tourism often interplays with travel agencies. It can help improve the brand image of a travel agency by enhancing the stay experience. It can also lead to increased food and beverage sales if the hotel or a resort has its own facilities, such as a restaurant or bar. In return, the food and beverage sector can improve the standing of accommodations and destinations in the eyes of travelers.

Travel agencies interplay with all of the sectors. The services they offer have to live up to the descriptions found on the websites. They can help boost the average daily rates for accommodation providers, increase booking rates at transportation companies, and bring more people to attractions. 

The best way to look for the interplay of sectors in tourism is to closely examine partnerships. The transportation, accommodation, and other various travel brands have recognized the value of the interplay and decided to partner up to reap even more benefits. 

The most common are partnerships between airlines, hotels, and travel agencies. It enables airlines to remain competitive while helping hotels and travel agencies maintain high customer satisfaction and enhanced travel experience. 

The real-world example that comes to mind is Wilderness Safaris’ partnership with Qatar Airways. The big hospitality brand wanted its guests to arrive well-fed & rested, ready to engage in adventures in the great outdoors. Given that Qatar Airways received high marks in the catering and business class areas, it was the perfect pick for Wilderness Safaris.

Another real-world example is AEGAN’s partnership with Booking.com. Here, we have a transportation company and OTA joining forces together to reap unique benefits. AEGAN, an airline brand, wanted its customers to be able to conveniently check hotel availability in real-time, book accommodation at competitive prices, and benefit from friendly cancellation policies. 

To encourage travelers to choose AEGAN services through Booking.com, the company also launched the Frequent Flyer Program and awarded consumers extra miles with every hotel booking using AEGAN transportation services.

Impact of each sector on the tourism industry

As one of the largest industries, the tourism vertical contributes 10% of all jobs or 333 million. All sectors contribute to job creation and the global tourism market size of $2.4 trillion

Accommodation and food and beverage sectors have a significant impact on the tourism industry as well. In terms of GDP, these sectors contributed 3.3%, a significant growth, given that the US average is 2.87%.

In raw numbers, it looks like the following. Global accommodation in tourism generates $903 billion. Almost half of it, 49%, comes from the USA sector. Europe, APAC, Middle East, and Africa contribute with their shares of 25%, 22%, 3%, and 2%, respectively. The global hotel and resort industry currently employs approximately 10.5 million people

The global travel agency services industry’s revenue has reached $475 in 2023. Travel agencies in the US employ 402,835 people. Over the last 5 years, the number of people working in the travel agency sector went up by 12%. On a global scale, travel agencies employ approximately 2 million people

Challenges and opportunities in each sector

While every industry and sub-sector is unique, they all share a few things in common. In each one of them, you can find a couple of opportunities and encounter a few challenges. Let’s see what challenges and opportunities there are in each sector. 

Challenges and opportunities in each sector

Transportation in tourism


  • Ever-increasing prices of fuel – to remain profitable, airlines need to manage operational costs, and one of the enormous costs is fuel;
  • Becoming green – transportation companies need to reduce carbon emissions and adopt sustainable travel practices, which can be challenging and costly;
  • Infrastructure in remote destinations – building roads and developing infrastructure can be pretty challenging in remote destinations with tremendous tourism potential.


  • Using technological advancements – transportation technologies can help improve customer experience and improve operational efficiencies;
  • Implementing sustainable practices – becoming eco-friendly can help brands attract environmentally conscious travelers;
  • Improving connectivity – with connectivity expansion, transportation brands can help local economies and create new tourism opportunities.

Accommodation in tourism


  • Online offer – as more and more competitors join online marketplaces, accommodation providers need to embrace a new paradigm;
  • Overtourism limited accommodation capacity is a massive problem in destinations where over-tourism is a norm;
  • Guest safety and security – in some situations and locations, accommodation providers can struggle with ensuring guest safety and security.


  • Going digital – embracing cutting-edge technologies can help enhance guest experience and ensure longer and repeat stays;
  • Personalized accommodation – offering boutique and experiential lodging can help accommodation providers cater to modern travelers;
  • Partnerships – aligning with relevant companies and local brands can help providers attract more travelers.

Food and beverage in tourism


  • Quality and safety of food – upholding the highest food quality and safety standards can be challenging;
  • Fluctuating demand – seasonal destinations can struggle with handling fluctuating food and beverage demand;
  • Shifting dietary preferences – guests may have diverse dietary preferences, which require planning and management.


  • Innovation – innovative dishes and fusion cuisines can attract guests who feel more adventurous;
  • Farm-to-table – cooperating with local farmers can help bring fresh ingredients to restaurants;
  • Focus on local cuisine – bringing local dishes into the spotlight can help attract people interested in authentic cuisine.

Travel agencies


  • Harsh competition – travel agencies have to compete against hundreds of online travel booking platforms;
  • Tailored services – many travelers look for personalized experiences, which can prove hard to provide if you are a small agency;
  • Agility is required – getting ready for a wide range of disruptions is costly and hard to sustain at scale.


  • Customization – offering unique packages can help generate more bookings;
  • Multi-channel presence – being present across online and offline channels is paramount;
  • Focus on a niche market – staying focused on a specific travel niche can help you truly cater to the needs of your target customers.

Tourism attractions


  • Preservation – sustainable management of tourism attractions can be challenging; 
  • Seasonality – if traction generates the majority of the revenue through seasonal visitors, it can be a problem;
  • Infrastructure demand – a growing number of visitors can cause infrastructure strain.


  • Collaboration – partnerships can help create a better ecosystem;
  • Interpretive guides and interactive displays – interpretive experiences can delight a wide range of visitors;
  • Expanding offer – You can offer new activities to make the offer more attractive.


As you can see, the tourism industry landscape is quite comprehensive, with a lot of moving pieces on the board, and the best way to understand the vertical is to take a look at its subsectors.

By exploring these tourism sectors, we gain insights into the various elements that contribute to the industry’s growth and sustainability.

Hopefully, now you understand transportation, accommodation, food and beverage, travel agencies, and tourism attraction sectors better. They are all intertwined, with many interplay activities.While the tourism sector comes with its fair share of challenges, there are also many opportunities. The current stats and projections tell us that all subsectors are prosperous and expected to grow in the foreseeable future. 

Sectors in Tourism
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