Imagine a future where your travel choices have no geographic constraints. Where you can join your friends in the front row of a concert by your favorite star—but the crowd is 300 million strong, your friends are on the other side of the world, and it’s all happening at the Great Pyramid of Giza. Later you’ll do some shopping at the virtual souk and take a digital Nile cruise, before teleporting back home in an instant.
Impossible? Or a tempting package trip that might soon be available from the comfort of your home? With the internet’s rapid evolution, many see this vision of transformed travel on the horizon—in the metaverse. Others caution that this future might take a little longer to arrive, and that travelers resist “metaversification” of key parts of the tourism journey.
The metaverse is seen as the next evolution of the internet—a collective space where physical and digital worlds converge to deliver more immersive, interactive virtual- or augmented-reality (VR/AR) user experiences, often referred to together as extended reality (XR). The underlying technology for this exists and is proving relatively cheap and fast to implement. Driven largely by inspirational advertising and virtual events, the potential rewards for the travel industry are already substantial: more than $20 billion by 2030, by McKinsey estimates.
This has potential to revolutionize the way we explore new worlds: already, you can attend concerts, shop, test products, visit attractions, and take workshops, all without physically traveling anywhere. Currently, the user demographic trends very young, but it’s crucial for the tourism sector to appeal to this segment.1 After all, these are the travelers of the future—and players not keeping pace with their interests will lose out.
But does XR live up to all the hype—with appeal beyond a gamer demographic? A virtual trip can never replace the thrill of certain tangible, real-word experiences, and some traveler touchpoints have proved more ripe for disruption than others.
Despite these hesitations, the XR ecosystem is maturing at pace. Immersive VR/AR devices may well follow the steep adoption curves of laptops and smartphones. Widespread use could lead to a radical extension of the global economy from physical into virtual life, not least in tourism.
So how does a tourism player go about monetizing this virtual paradigm, which is still taking shape and many struggle to define? It’s time for the sector to take a serious look at these complex opportunities—and figure out what best drives traction in the new XR universe.
Touring the metaverse: early trends
The metaverse could enrich the tourism experience in countless unprecedented, innovative ways—but which use cases have the most potential, and which are still deemed risky? Early adopters have already started experimenting, and several trends have emerged. Virtual elements can be layered onto an established business:
- In the wake of the fire that damaged the famous cathedral in 2019, French start-up Histovery produced an augmented exhibition on the history of Notre-Dame de Paris—motivated in part by an increased awareness of the fragility of physical landmarks. To navigate the exhibition, each visitor uses a “HistoPad” touch screen to take an immersive tour that allows interaction with physical elements: giant photographs, 3-D models of statues, replica flooring and stained glass, and audio of Notre-Dame’s organs and bells. Effects include animation and a virtual scavenger hunt for younger visitors.2
- In December 2021, faced with record staff turnover, MGM Resorts International decided to apply a virtual solution. In partnership with immersive platform provider Strivr, MGM developed VR headsets that give aspirant front-of-house staff a realistic sense of what working at MGM casinos and hotels entails. The training package was rolled out at the company’s properties in 2022. It’s designed to speed up onboarding and upskilling, increase employee confidence, and familiarize potential hires with MGM procedures and culture.3
Other virtual platforms allow visitors to explore major global landmarks, incorporating rich edutainment and retail opportunities. Several such initiatives have been launched:
- Responding to pandemic travel restrictions, ZEPETO World is a smartphone app that allows users to create personal avatars and travel around Korea. For example, the tour includes a highly detailed interactive map of Han River Park; this feature gets almost 257,000 visitors a day. Users are also able to communicate with each other, shop, and watch performances. ZEPETO World has approximately 190 million members.4
- The BCB Group—a leading crypto banking group—has created a metaverse city that includes representations of some of the most visited destinations in the world, such as the Great Wall of China and the Statue of Liberty. According to BCB, the total cost of flights, transfers, and entry for all these landmarks would come to $7,600—while a virtual trip would cost just over $2.5
- Saudi Arabia’s Royal Commission for AlUla (RCU) recently announced that the ancient city of Hegra had entered the metaverse, in line with a national program to drive technological transformation and innovation. It is the first UNESCO World Heritage Site to be placed in the metaverse, allowing digital tourists to explore the surroundings as well as Hegra’s Tomb of Lihyan son of Kuza.6
Instead of attempting to replicate real-world experiences, entirely novel environments can also be created, convening people in a single immersive space—as in multiplayer online games. (Indeed, many people currently associate the metaverse largely with games.) The travel industry can harness this utility too.
This is particularly relevant to the meeting, incentives, conferences, and exhibitions (MICE) sector, with virtual gatherings, exhibitions, and trade fairs looking to become mainstream. These allow people to gather and take part in activities in the same immersive space, while connecting from anywhere. This dramatically reduces travel, venue, catering, and other costs, while avoiding setbacks like adverse weather conditions or disease scares. For example, one Japanese start-up recently held a virtual market that attracted a wide response, with around 60 well-known companies participating.7
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What areas of tourism show promise?
As innovative formats become more mainstream, new economic models are emerging. The travel experience of the future will not be exclusively online or offline. Instead, we’ll most likely see a proliferation of hybrid offerings, with virtual events, edutainment, and inspiration combined with physical destinations.
One way to grapple with this complexity is to adopt a traveler-first mindset. By putting themselves in the shoes (or bedroom slippers) of their target tourist, travel companies can identify opportunities to embed relevant virtual elements.
Individual touchpoints, not end-to-end offerings
Virtual experiences that show promise are focused on a few specific, discrete steps in the end-to-end traveler journey (exhibit). Which touchpoints can be most effectively disrupted? Which hold the greatest possibilities for integration? Which steps can be elevated by an immersive element, allowing for exhilarating, fantastical or deluxe experiences not available in the physical world? Three touchpoints show great potential: travel inspiration, virtual events and visitor support.
Inspiration and planning: The metaverse creates a $13 billion opportunity for tourism inspiration, mostly driven by digital travel advertising. Virtual spaces—which can be used to showcase hotel amenities, airline classes, or an entire landmark—spark the desire to travel, give a holistic idea of a destination, help in traveler decision-making, showcase broader offerings, and raise awareness of unfamiliar locations. The case studies of AlUla and ZEPETO demonstrate how this can work. Qatar Airways offers another example: a recently launched VR experience called QVerse allows travelers to view cabin interiors, the business-class QSuite, and the VIP check-in area at Hamad International Airport.8
Leisure and entertainment: Live streaming soared during the pandemic, followed by a wave of interest in virtual concerts—with significant increases in consumer demand, spend, and audience numbers.9 In 2020, the metaverse accounted for 0.1 percent of live-music revenues—a figure which rose more than tenfold by 2021. By 2030, we estimate that virtual events could account for up to 20 percent of revenues, driven in part by their capacity to accommodate huge audience numbers at reduced cost.
With top artists generating around $20 million per metaverse concert, this industry has an anticipated income potential of upwards of $800 million by 2025, according to McKinsey estimates (see sidebar, “Ariana Grande leads the way into the music future”). Taken together with XR MICE, this sector is a rich opportunity: an expected $7 billion by 2030.
Visitor support: Some destinations have been exploring the idea of virtual concierges to support travelers at every stage of the journey with real-time itineraries, information, troubleshooting, visa issues, and more. Qatar Airways, for example, provides a MetaHuman cabin crew for an interactive customer experience. Immersive use cases already account for over 1 percent of chatbot investment, and this is expected to increase. Still, it may be several years before this touchpoint gains real traction.
Then there are touchpoints where the disruption potential of the metaverse is still debatable, or where opportunities may take longer to mature:
- Shopping: Multiple stores could be built in virtual destinations, adding a revenue stream with the sale of accessories, souvenirs and other items. These might be digital, or goods to be shipped in the real world. Iconic real-life stores might also operate as digital recreations.
- Booking: Customers are already comfortable with online booking, so a shift to XR interactions with virtual travel agents could be seamless. However, this is a relatively small business opportunity, with uncertain added value: the new technology is not expected to change or boost the functionality of current booking processes in any fundamental way.
There is currently limited interest in adding virtual elements to aspects of travel that are necessarily physical, such as mobility, accommodation, the logistics of arrival and departure, and food and drink (F&B).
Mobility is currently expected to have very limited XR use cases: tourists may access a metaverse experience while in a taxi, but are unlikely to replace physical with virtual mobility. The “stay” category is similarly sized. While people may wish to explore virtual stays in hotels or on cruise ships, these will not yet replace actual stays. Hotel developer CitizenM, for example, has announced plans to build a hotel in gaming world The Sandbox, allowing virtual visitors to explore the digital property and raise awareness of its brand.10
Similarly, arrival-and-departure use cases are largely limited to customers seeking XR versions of modes of transport, such as business-class flights or special railway routes, without intending to visit. (Such experiences may serve as “portals” to expanded immersive worlds, however.) The F&B industry will likely be among the last to enter the metaverse.
Post trip, the real potential lies in the capacity to inspire further travel. However, actual follow up, currently often achieved via surveys, is unlikely to be deeply impacted.
Travel Disruptors: Sonder’s Francis Davidson on the future of hospitality
“No-regret” metaverse moves
Taking the above factors into account, there are certain no-regret functions that tourism-industry players can pursue to be at the forefront of disruption. These promising use cases have already gained traction, with fast-moving industry players stepping in early to bet on their viability.
They fall into two categories: virtual event centers, and recreations of memorable landmarks that inspire visits. As we’ve seen, event centers are already showing substantial revenue potential for organizers and destinations through business gatherings and entertainment, with ticket sales, attendance fees, and ancillary retail opportunities.
At XR landmarks, visitors can explore, socialize, shop, and learn—all while gaining awareness of lesser-known destinations. Young people and tourists may flock to these social spaces for immersive fun. There may be edutainment opportunities, including specialized archaeology, geology or architecture classes. These spaces can be built on established or upcoming platforms (such as Metapolis) and operate in collaboration with third-party vendors to increase retail opportunities.
Themed gaming, too, can drive engagement with a location, and caters to a core XR demographic. This includes game developers: Unreal Editor for Fortnite (UEFN) is a newly released PC application for designing and publishing games and experiences directly into the online video game Fortnite.11
There appears to be public appetite for recreations of individual landmarks rather than entire destinations: a metaverse Eiffel Tower rather than a complete metaverse Paris. An example is Dubai’s Burj Khalifa virtual experience, launched by event-management platform Eventcombo, which offers users a focused tour of the world’s tallest building.12 For now, there seem to be fewer opportunities to create whole customer journeys (although this may work well for certain cases like theme parks). When it comes to end-to-end tourism experiences, travelers still seem prefer the “real thing.”
Preparing for the future of travel
How can travel companies leverage the metaverse to create more compelling experiences for their customers? Certain challenges must be overcome: these include enabling interoperability between decentralized worlds, protecting data security, and making immersive devices more readily available.
However, it’s prudent for travel players to think proactively about engaging with the metaverse—and perhaps seize a first-mover’s advantage. Early control will help to sidestep thorny issues like third parties claiming virtual rights to a location.
Once travel players have plotted out potential traveler journeys (whether hybrid or fully digital), they can find the right collaborators to bring these experiences to life—such as virtual-universe and retail platforms, communications channels, and designers. As many tech players are still only starting to come to grips with immersive experiences, companies may be able to secure favorable partnership agreements and experiment with different executions.
Four steps for travel players contemplating the metaverse
Step 1: Create a strategy based on individual traveler touchpoints to be disrupted. Develop offers targeted at travelers of the future, considering demographic groups, travel purpose and likely journeys. Imagining specific future touchpoint needs and desires and how these can be satisfied or enhanced in a virtual world will ensure a targeted strategy.
Step 2: Identify the platform you want to play on. There are several options here, depending on factors like the strength of your brand and how much independence you require. With a very strong brand, you might be in a position to create your own platform. If your brand is less widely recognized—as with most tourism destinations—or the advantages of a dedicated platform are not clear, then it might be unwise to go it alone. It may be possible to integrate your experience with another organization’s platform, with the added benefit that their established users can stumble across your product. Or partner with an existing platform, as Saudi Arabia’s RCU have done with browser-based platform Decentraland and Korean tourism with the ZEPETO app.
Step 3: Choose the right talent. Developing any offer will likely require new skills—not just to make your immersive world look good, but to ensure that it’s smooth and exhilarating to use. Excellent “game mechanics” motivate users to come back repeatedly for new experiences. In turn, this requires constant maintenance, operation and innovation, as with any great tourist attraction. Talent for these tasks can be either recruited or outsourced. Hiring a new, dedicated workforce might make sense for a large service that requires intensive modification and security monitoring. For simpler or once-off offerings developed to test the waters, outsourcing will ensure a smoother, faster process.
Step 4: Understand the agreement you have with your partner. Be sure to clarify safeguards related to IP and other potential challenges. Also ensure that virtual experiences cohere with your existing brand identity, as well as the values and cultural context of heritage assets.
The metaverse promises to shake up many sectors of the global economy. Virtual experiences have huge potential for the tourism and travel industries, with the prospect of hybrid and fully immersive digital destinations. But our research indicates that opportunities may, for now, be limited to a few key touchpoints—most prominently, travel inspiration, events, and edutainment. It may take longer for the metaverse to reveal its utility for end-to-end travel experiences, if it ever does.
Nonetheless, there are undeniably travel touchpoints where metaverse integration feels inevitable, profitable and “no regret.” Players in the sector would do well to start planning their metaverse strategy now, focusing on specific touchpoints and destinations, while this rapidly developing arena matures.
