India's burgeoning middle class is projected to spend $144 billion annually on international travel by 2030, and hotels, airlines and cities are spending millions to land them.
by Suzanne Rowan KelleherForbes staff
LHundreds of global travel professionals gathered in Delhi last week for the first Skift India Summit, where major travel experts including Oberoi Group, OYO, Agoda and the country's flag carrier Air India gathered in Delhi for the first Skift India Summit. We had the opportunity to glean valuable insights from brand CEOs. “India is on a roll right now, with Indian outbound travelers poised to become the world's largest force in the coming years,” said Brian Quinn, Skift's head of event planning.
Ten years ago, the same could have been said about Chinese tourists. Approximately 117 million Chinese tourists traveled abroad in 2014, an increase of 20% from the previous year. But a decade later and a pandemic later, Chinese outbound travel still has not recovered to pre-COVID-19 high levels, and the energy and focus of the global tourism machine has shifted to the Southeast, moving to India.
With a population of over 1.4 billion people, India is currently the world's most populous country and the fifth largest economy. Outbound travel from India is growing far faster than any other country, leading to predictions that will have travel brands drooling.
“There's huge potential,” said Caroline Bremner, head of travel and tourism research at Euromonitor International, predicting 47 million international travelers from India by 2030. . “It will go from $35 billion in 2019 to $84 billion in 2030,” she says. “In essence, India is moving up the rankings and will become the world's sixth largest outbound source market by 2030, after China, the US, the UK, Germany and France.”
A 2023 report by Nangia Andersen, the India arm of Andersen Global, predicts that international travel in India will grow at a compound annual growth rate (CAGR) of 11.2% between now and 2032, according to Euromonitor. This is almost in line with the forecast number of tourists. If these predictions come true, other, more outlandish predictions may not be so unlikely after all. Organizers of the Arabian Travel Market (ATM), an industry conference to be held in Dubai in May, tout the value of India's outbound market at $144. By the end of this decade it will be $1 billion a year.
A recent McKinsey report also provided a similarly bullish outlook on the long-term outlook for Indian tourism. “India's international travel could increase from 13 million in 2022 to more than 80 million by 2040,” the authors write. “If India follows China's international travel trajectory (which it is likely to do given its similar population size and per capita income trajectory), India will receive 80 million to 9,000 tourists per year by 2040. You could make a million trips.”
Given all the hype, it's no surprise that travel brands have started reaching out to Indian tourists with gusto, including using celebrities as influencers. Bollywood icon Shah Rukh Khan promotes Dubai, while British actress Katrina Kaif, who produces Hindi films, professes allegiance to Accor. Actor Ranveer Singh has appeared in an advertisement in Abu Dhabi and his wife Deepika Padukone is the global brand ambassador for Qatar Airways. Meanwhile, current Olympic gold medalist and world javelin champion Neeraj Chopra is helping to promote Switzerland's spectacular alpine landscapes.
But industry experts say that for India's international travel to reach its full potential, the volume of air flights within India and abroad (a number mutually decided by the two governments) will need to increase significantly. It has said. Flight routes to and from India by city pair increased by about 14% last year compared to 2019, according to FlightAware data. Airlines currently operate only 18 scheduled passenger flights from India to the US, up from 14 in 2019.
Some destinations have adjusted their policies to increase capacity. In late 2022, Canada raised the cap on the number of flights from India from 35 per week to “unlimited” and granted Indian airlines access to six hub airports, including Toronto, Montreal, Edmonton and Vancouver. Meanwhile, South African Tourism has partnered with Ethiopian Airlines to provide faster links between India and Africa. Even Bhutan's Prime Minister has emphasized the need to strengthen air connectivity between India and the small Buddhist kingdom.
Airlines are also noticing India's growing importance. Most notably, Singapore Airlines signed a deal with Tata Group in late 2022, reportedly paying $250 million for a 25% stake in Air India. In November last year, Singapore Airlines CEO Goh Choon Fong said: forbes asia He spoke about his plans to make India his new home. “You can see how much potential there is,” Go said. “India is growing but underserved.”
Hotel CEOs are also being seduced by dizzying economic forecasts. Sébastien Bazin, CEO of French hospitality giant Accor, told investors at the company's latest earnings call in February that “the world's demographics are growing and more households are wanting to travel.'' I'm just blessed,” he said. He offered a short lesson on the global economy, noting that the world's emerging middle class population has exploded by 1 billion people over the past decade. “Half of them are from India,” he stressed. “We can sensibly say that over the next 10 years, demand will no longer grow by 3% to 5%, but perhaps by 4% to 6%. There is a good chance that demand will be three times greater than supply. Much of it, again, concerns India alone. [expected to add] 5 million [to its] emerging middle class. ”
“India is definitely a bright light for the economy,” agrees Bremner, noting that the country's current economic growth rate of 8% is higher than China's. Moreover, its momentum shows no signs of slowing down.
Last year, 1.7 million Indian tourists visited the United States, making India the fourth-largest source of tourism after Canada, Mexico, and the United Kingdom. Data from the past six months collected by the National Tourism Organization (NTTO), which tracks tourism statistics within the U.S. Department of Commerce, shows that the average Indian tourist also spends money on international trips, and It is said that it costs about $5,252 per person. By comparison, the typical traveler from the UK and Brazil spends $2,656 and $3,344 respectively, while the average Japanese traveler spends $3,672. In other words, it's the amount of money it takes for two British travelers to spend the same amount as one Indian traveler.
Experts say if the United States wants to attract more Indian tourists in the future, it needs to make entry easier. “I strongly believe that less friction means more travel,” said Omri Morgenstern, CEO of Agoda, Asia's largest online travel agency. “We can remove friction by adding direct flights, introducing visa waivers, and allowing him to book accommodation, flights and activities in one app.”
There are now 62 countries that Indian travelers can visit without first obtaining a visa, which is 10 more than in 2016, when Henry & Partners' Passport Index was launched. However, the US does not allow Indian tourists to enter the country without a visa, nor does it make obtaining visas quick or easy.
The US is currently approving more visas for Indians than before the pandemic, but the average wait time for a visa is still about 10 months, according to the US State Department website. Before traveling for leisure to the US, Indian citizens have to wait for a visa interview. Interviews can take anywhere from 197 days at the U.S. Embassy in New Delhi to 423 days at the U.S. Consulate General in Mumbai. In comparison, Indian tourists can obtain a Canadian visa in just 23 days and a UK visa in about three weeks.
U.S. officials readily acknowledge that visa wait times are a major problem. At the Skift India Summit on Tuesday, US Ambassador to India Eric Garcetti told conference participants that President Joe Biden specifically called on him to address the backlog. “This is probably the first time a U.S. president has said to an ambassador, 'Please work on the visa issue,'” Garcetti said.
Agoda CEO Morgenstern argues that visa waivers have a proven track record and give countries a competitive edge. Since Azerbaijan introduced his ASAN system, which processes e-visas within three working days of applying, interest from Indian tourists has skyrocketed, with the number of arrivals increasing fivefold in two years. did. “Thailand and Malaysia introduced visa exemptions for tourists from India late last year, which immediately increased the number of searches from India to both markets,” said Morgenstern, adding that Thailand is already one of the world's Despite being number one, searches for Thailand increased by 46%. Most searched destinations by Indians. “In the two months since the visa waiver went into effect, Bangkok has overtaken Dubai as the most-booked destination for Indians.” But the Emirates could not afford to be outsmarted. In February, Dubai introduced a five-year multiple-entry visa for Indian travelers visiting Japan.
Another reason why India is such an attractive supply market is its young population. Only 7% of India's population is over 65, compared to 14% in China and 18% in the United States, according to data from a recent Pew Research Center report.Over 40% of India's population is under 25 years old. “In fact, Indians are very overrepresented in this age group, with approximately one in five people being Indian. World wide People under the age of 25 living in India,” the Pew report said. “Looking at India's age distribution in another way, the median age in this country is 28 years. By comparison, the median age in the United States is 38 years and in China it is 39 years.”
“The population is very well-educated and very digitally savvy,” Bremner said, adding that Euromonitor data shows that more than 75% of Indian millennials and Gen Xers will have traveled in 2023. added.
“Indian travelers are more engaged in ecotourism and sustainability than their global counterparts. They are open to all kinds of experiences, from luxury to eco-adventure,” continues Bremner. . “And, of course, the expenses are high. I'm not at all surprised that destinations from Asia to the Middle East to Europe and the United States are following them.”
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