India’s total travel expenditure is set to touch $410 billion in 2030, according to “How India Travels”, the report by Booking.com and McKinsey. In 2019, when the tourism industry, worldwide, had its best year, before Covid-19 hit, India’s total travel expenditure was just $150 billion.
India’s youth will be another factor that will make the country irresistible for global tourism players. India’s median age is 28.2 years, more than 10 years younger than that of major economies. According to the UN World Tourism Organization, India is one of the top three fastest growing outbound tourism markets.
PROXIMITY MATTERS
Flight fare, food and local experiences are all factors that Indian travellers consider while choosing a destination, but distance pips them all. Seventy per cent of travellers choose nearby destinations, with the Middle East accounting for one-third, says a McKinsey report, “From India to the World: Unleashing the Potential of India’s Tourists”, released in November last year. The UAE has been leading the charts for the last couple of decades.
Says Rajesh Magow, group CEO of MakeMyTrip: “The most popular outbound destinations remain largely unchanged in 2023, with the UAE, Thailand, Singapore, Indonesia, Maldives, Hong Kong, US, Nepal, UK, Canada and Vietnam leading the chart. We don’t expect the top outbound destinations to change dramatically in 2024, though the order of preference may change.”
Across UAE, Indians represent a significant portion of a very diverse global tourist influx, constituting about 13.6% of visitors between 2021 and 2023,” says Iyad Rasbey, vice-president, Destination Tourism Development, Ras Al Khaimah Tourism Development Authority. India has been one of the top 5 markets for Ras Al Khaimah, one of the seven emirates of UAE, “with over 18% year-on-year growth in visitor numbers recorded in 2023”. While competing with established destinations like Dubai, Abu Dhabi and Sharjah, it aims to increase the share of Indian visitors to 22% in 2024. “Compared with other emirates, accommodation in Ras Al Khaimah is very competitively priced,” says Rasbey. “Upcoming projects include properties in the midscale segment that cater to budget-conscious travellers.”
Aloke Bajpai, CEO of ixigo, says changes in visa policies, with Malaysia, Thailand, Sri Lanka and Kenya waiving visa requirements for Indians, fuelled international travel growth towards the end of 2023. While Iran and Vietnam have joined the list of countries offering visa free entry to Indians, Indonesia is considering the same.
In 2022, India boasted the highest number of global travellers from Asia, pipping China (which was the world’s biggest outbound tourism market before Covid-19), South Korea and Japan. Visa applications to India saw a remarkable 140% rise in 2022 over 2021, ET quoted Prabuddha Sen, chief operating officer–South Asia,VFS Global, in December 2023.
“Direct flights, hassle-free visa, economical fares, a range of accommodation options and a broad canvas of experiences—any destination that is able to get this mix right will be able to attract travellers from India,” says Magow.
About 40% of Indian travellers used the screen—films, TV and OTT—as travel inspiration, Skyscanner noted a 23% month-on-month rise in Paris searches after the release of Emily in Paris, season 3, in December 2022.
Indians prefer US and Western Europe when it comes to longhaul travel. In 2022, India was third among overseas travellers visiting the US. According to media reports, non-immigrant visas to the US saw a 44% jump in 2023 over 2019. Air India launched non-stop service from Mumbai to New York and San Francisco, and from Bengaluru to San Francisco, in 2023. If rumours are true, Dallas Fort Worth, Los Angeles and Seattle could join in 2024.
A Brand USA market survey predicts Indian arrivals to reach 1.8 million in 2024 and 2.3 million in 2030, from 1.5 million in 2019, with Indians most interested in visiting California (47%), followed by Florida (39%) and New York (37%).
LUXE FOR LESS
In 2022, India recovered 61% of its pre-pandemic market, with 13 million outbound tourists—a much quicker recovery than most Asian countries. Indian travellers should make 5 billion trips in 2030 as against 2.3 billion in 2019.
Fifty million of those could be outbound departures, according to the Centre for Asia Pacific Aviation. The number could reach 80-90 million by 2040. “It mirrors the nation’s growing appetite for international travel and the economic clout of Indian tourists abroad,” says the report. Affordable luxury is the name of the game.
Indians are exploring high-budget distant destinations as well. Like Courchevel in the French Alps, which is trying to break off from its image of an elite ski resort meant for the Victoria Beckhams, Kim Kardashians and Shah Rukh Khans of the world. “Courchevel is not only Courchevel 1850 (where the rich and the famous stay),” says Alexia Laine, MD, Courchevel Tourism. “From traditional, family-run hotels to a 5-star palace, there is something for everyone.”
While its Asian market continues to grow post-pandemic, Courchevel Tourism has been eyeing the Indian market (currently 1.5%) for the last couple of years. It is promoting the offseason, summer tourism that costs less. The budget for a weeklong stay at that time could be as low as “around €600 for a flat in Courchevel La Tania” compared with the high of “around €300,000 for a private chalet at Courchevel 1850 during the peak season— Christmas and February”.
FLIGHTS OF FANCY
Along with a booming Indian economy, expected to be the third largest before 2030, growing number of airports and rising aircraft capacity have been giving wings to the dreams of Indian travellers. The World Bank data shows that as the Indian GDP per capita (in current USD) grew from $442 in 2000 to $2,050 in 2019, the number of international tourist departures grew from 4.4 million to 26.9 million. India’s per capita GDP is likely to touch $4,000 before 2030, according to a Standard Chartered Bank report of July 2023.
“The development of airport infrastructure in Tier-2 and -3 cities, increased connectivity and affordable air travel options have contributed to the growth of air travel and first-time flyers in metros as well as non-metro cities,” says Bajpai of ixigo.
According to the Directorate General of Civil Aviation, the Middle East and Africa accounted for 58% of India’s outbound international passenger traffic in 2022-23. “In 2022, we carried 3.6 million passengers; 30% of them were to South Asia which comprises India, Bangladesh, Sri Lanka, Pakistan and Nepal,” says Rohit Ramachandran, CEO of Jazeera Airways, a Kuwait-based, low-cost carrier having its largest presence in Middle East and Africa. Its target is to reach 86 global destinations in the next three years.
While Jazeera connects to six Indian cities, Ramachandran says, “We are also hoping to increase direct connectivity to Tier-2 cities in India. The seat capacity allocation is ongoing at the government level. This has not increased since 2007 when the Indian population in Kuwait was only around 300,000. It is close to 1 million now.”
Indigo had the biggest market share of India’s international passenger traffic (15.7%) in 2022-23, followed by Air India (12.4%). Says Vinay Malhotra, head of global sales, Indigo: “In the last year or so, we have grown our international network in addition to building strong codeshare partnerships with leading overseas carriers to provide seamless connectivity.” At the Skytrax World Airline Awards 2023, Indigo was third among the World’s Best Low-Cost Airlines.
Malhotra says IndiGo is “aiming to double our size by the end of 2030”. It operates over 2,000 daily flights now, serving 86 domestic and 32 international destinations. “We are also planning to introduce flights to Bali in Indonesia and Medina in Saudi Arabia in the next fiscal year,” he says.
The Indian travellers, who are on a budget, are no longer trying to save every penny, but are willing to spend a few more for extra comfort. Skyscanner’s Travel Trends 2024 report says this year shall see a lot more cabin upgrades. While 37% of Indian travellers would go for business or first-class bookings, 44% would plan to start their vacation on the right note by buying airport lounge passes.
HAVE MONEY, WILL SPEND
Indians spent $22.9 billion on overseas travel in 2019, and a Nangia Andersen-FICCI report titled “Outbound Travel and Tourism: An Opportunity Untapped” estimates it will touch $42 billion by 2024. Indian tourists are among the highest spenders in the world, spending almost four times their Asian counterparts from China and Japan, and double that of Americans and Europeans. 63% of Indian travellers have budgeted to spend more on travel in 2024, says the Skyscanner report.
“In 2022, the average expenditure on domestic travel was around `27,000 and for international travel it was around `1,29,000,” says ixigo’s Bajpai. A survey by Acko Insurance says majority of Indians are willing to spend `1-6 lakh on their international trips, and up to `1 lakh for domestic travel.
The aspirational middle class is not travelling the traditional way, checking must-visits and must-dos. Ruchi Kohli, chief of experience at Away & Co, which curates experiential travel, says, “Overall, experience travel has moved beyond luxury vacations and is now welcomed by a wide range of travellers.” Kohli says their Indian customers prioritise off-beat cultural experience, “often allocating 30-40% of their budget” for it. Seeking unique and immersive experiences, they allocate 10-15% of their budget for highly local and personalised activities.
