How India is Leading a Shake-up of the Global Travel Industry
Traditional outbound travel markets have played a significant role in global travel, but it is undeniable that new trends are reshaping the dynamics of international tourism. India is emerging as a formidable source of outbound holidaymakers, standing out among Eastern Europe and Southeast Asia, with a rapidly growing middle class that’s spending more on travel. Southeast Asia’s travel spending is projected to grow roughly 7% a year, while India’s spending on outbound travel is expected to grow even faster.
Features and Benefits
- India, Eastern Europe, and Southeast Asia are emerging as formidable sources of outbound holidaymakers, challenging the dominance of established markets.
- India’s outbound travel market is poised to grow to $44.8 billion by 2032, at a CAGR of 11.4% from 2023 to 2032.
- Indian airlines and hospitality companies are making substantial investments to accommodate growing demand.
- Thailand and Malaysia have implemented visa-free entry to attract more tourists.
- Global travel is expected to recover to pre-covid levels by the end of 2024.
- Travel spending is forecast to rise to $8.6 trillion in 2024.
Though the US, Germany, the UK, China, and France remain the world’s five largest sources of travellers, new groups of travellers are emerging in Eastern Europe, India and Southeast Asia, which have fast-growing pools of first-time tourists. It is projected that India’s spending on outbound travel will grow from $176 billion in 2023 to $319 billion in 2030, at a compound annual growth rate (CAGR) of 9%. In contrast, South Asians spend 20% less than Western European travellers. Eastern Europeans spend 40% less, and Southeast Asians spend 55% less, averaging $87.5 a night.
Currently, India is the sixth-largest domestic travel market by spending. However, driven by a robust 6% annual GDP growth and a rapidly expanding middle class, Indians’ travel spending is set to grow 9% a year until 2030. Indian airlines and hospitality companies are making substantial investments to accommodate this growing demand. In 2023, budget airline IndiGo ordered 500 Airbus A320 aircraft, while Air India placed orders for 250 Airbus and 220 Boeing jets.
Thailand and Malaysia have implemented visa-free entry to attract more tourists, while unconventional destinations such as South Korea, South Africa, Japan, Brazil, Egypt, and Turkey are also becoming increasingly popular among Indians. This investment is bearing fruit, with Bangkok surpassing Dubai as the most popular city destination for Indian tourists.
Key Takeaways
- India is emerging as a formidable source of outbound holidaymakers, challenging the dominance of established markets.
- Indian airlines and hospitality companies are making substantial investments to accommodate growing demand.
- Southeast Asia’s travel spending is projected to grow roughly 7% a year, while India’s spending on outbound travel is expected to grow even faster.
- Thailand and Malaysia have implemented visa-free entry to attract more tourists.
- Global travel is expected to recover to pre-covid levels by the end of 2024.
- Travel spending is forecast to rise to $8.6 trillion in 2024.
Long-term projections forecast global travel to recover to pre-covid levels by the end of 2024, with international travel projected to return to its historical average of nine billion lodging nights a year. Meanwhile, domestic travel is expected to exceed this figure and hit 19 billion lodging nights a year. By 2030, it is projected that travel spending will rise to $8.6 trillion, accounting for about 9% of global GDP. India’s outbound travel market is poised to grow to $44.8 billion by 2032, at a CAGR of 11.4% from 2023 to 2032.
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