India's growing middle class is projected to spend up to $144 billion a year on international travel by 2030. And hotels, airlines, and cities are spending millions to attract them.
Forbes
Last week, hundreds of travel professionals from around the world gathered in Delhi for the inaugural Skift India Summit and had the opportunity to gain valuable insights from the CEOs of leading travel brands, including The Oberoi Group, OYO, Agoda, and the country's national airline, Air India. “India is at a point,” explains Brian Quinn, Skift's head of event programming, “where the outbound Indian traveler is poised to become the biggest global force in the coming years.”.
A decade ago, the same could have been said of Chinese tourists. In 2014, some 117 million Chinese tourists traveled internationally, a 20 percent increase over the previous year. But ten years and a pandemic later, Chinese outbound travel has yet to recover to pre-pandemic levels, while the energy and focus of the global tourism machine have shifted southeast to India.
With over 1.4 billion inhabitants, India now has the world's largest population and fifth-largest economy. Outbound travel from India is growing much faster than from any other country, generating a flurry of predictions that have travel brands salivating.
“There is enormous potential,” says Caroline Bremner, head of travel and tourism research at Euromonitor International, which projects 47 million Indian outbound travelers by 2030. “That’s more than double the number in 2019. And then, on the spending side, it’s even better,” rising from $35 billion in 2019 to $84 billion in 2030. “Essentially, India is moving up the ranks and will be the sixth largest outbound market globally by 2030, after China, the US, the UK, Germany, and France.”.
A 2023 report by Nangia Andersen, the Indian branch of Andersen Global, forecasts that outbound travel from India will grow at a compound annual growth rate (CAGR) of 1.2% through 2032, roughly aligning with Euromonitor's prediction for tourist volume. If these projections hold true, then another, more outlandish prediction may not be so far-fetched after all: organizers of the Arabian Travel Market (ATM), an industry conference taking place in Dubai in May, have touted India's outbound travel market as being worth $144 billion annually by the end of this decade.
And a recent McKinsey report is similarly optimistic about the long-term prospects for Indian tourism. “Outbound trips from India have the potential to grow from 13 million trips in 2022 to more than 80 million in 2040,” the authors write. “If India follows China’s outbound travel trajectory (which it could, given the similarity in population size and per capita income trajectory), then Indian tourists could be making 80 to 90 million trips a year by 2040.”.
Given all the buzz, travel brands have naturally begun aggressively courting Indian tourists, often using celebrities as influencers. Bollywood icon Shah Rukh Khan promotes Dubai, and Katrina Kaif, a British actress who makes Hindi films, professes her loyalty to Accor. Actor Ranveer Singh appears in advertisements for Abu Dhabi, while his wife, Deepika Padukone, is the global brand ambassador for Qatar Airways. Meanwhile, Neeraj Chopra, the reigning Olympic gold medalist and world javelin champion, has been enlisted to promote Switzerland's spectacular Alpine scenery.
However, before outbound travel from India can reach its full potential, industry experts say, the volume of flights within and outside the country (a number mutually agreed upon by the two respective governments) must increase dramatically. According to data from FlightAware, there were approximately 14% more city-pair flight routes to and from India last year compared to 2019. Currently, airlines operate only 18 scheduled passenger flights each week from India to the United States, up from 14 in 2019.
Some destinations have adjusted their policies to increase capacity. In late 2022, Canada raised the limit on the number of flights from India from 35 per week to “unlimited” and gave Indian airlines access to six hubs, including Toronto, Montreal, Edmonton, and Vancouver. Meanwhile, South African Tourism has partnered with Ethiopian Airlines to provide faster connections between India and Africa. Even the Prime Minister of Bhutan has emphasized the need to strengthen air connectivity between India and the small Buddhist kingdom.
Airlines are also taking note of India’s growing importance. In particular, Singapore Airlines signed a deal in late 2022 with Tata Group, paying $250 million for a 25% stake in Air India. Last November, Singapore Airlines CEO Goh Choon Phong told Forbes Asia about his plans to make India a new hub. “You can just tell them how much potential there is,” Goh said. “India is growing, but it’s very underserved.”.
Hotel CEOs are also being seduced by dizzying economic forecasts. “We are simply blessed by the increasing demographics of the world and the increase in households that want to travel,” Sébastien Bazin, chief executive of French hotel giant Accor, told investors on the company’s most recent earnings call in February. He offered a brief lesson on the global economy, noting that the world’s emerging middle class population has ballooned by one billion in the past 10 years. “Half of them are from India,” he emphasized. “We can probably say with some wisdom that over the next 10 years, demand will no longer grow by 3% to 5%, but probably by 4% to 6%. It is quite possible that you are seeing demand three times greater than supply. And much of that, once again, is just about India, which is expected to add 500 million to its emerging middle class.”.
“India is definitely an economic beacon,” Bremner echoes, noting that the country’s current economic growth rate of 8% is stronger than China’s. Moreover, it shows no signs of slowing down.
Last year, 1.7 million Indian tourists visited the United States, making India the country's fourth-largest source of travel after Canada, Mexico, and the United Kingdom. The average Indian tourist also spends money when traveling internationally: approximately $5,252 per trip, according to data from the past six months compiled by the National Travel and Tourism Office (NTTO), the U.S. Department of Commerce agency that tracks tourism statistics. By comparison, the typical visitor from the United Kingdom and Brazil spends $2,656 and $3,344, respectively, while the average Japanese tourist spends $3,672. In other words, it takes two British tourists to spend as much as one Indian traveler.
If the United States wants to attract more Indian tourists in the future, experts say it must make entry to the country much easier. “I firmly believe that less friction will lead to more travel,” says Omri Morgenshtern, CEO of Agoda, Asia’s largest online travel agency. “Friction can be eliminated by adding direct flights, as well as by introducing visa waivers or allowing users to book accommodations, flights, and activities all in one app.”.
Currently, 62 countries allow Indian travelers to visit without first obtaining a visa; that's 10 more than in 2016, the year the Henley & Partners Passport Index was launched. But the United States does not grant visa-free entry to Indian tourists, nor does it facilitate or expedite the visa application process.
While the United States is approving more visas for Indians today than in pre-pandemic years, the average wait time for visas remains around 10 months, according to the U.S. State Department website. Before traveling to the United States for leisure, an Indian citizen must wait for a visa interview, which can take anywhere from 197 days at the U.S. Embassy in New Delhi to 423 days at the U.S. Consulate in Mumbai. By comparison, Indian tourists can obtain a visa for Canada in just 23 days or for the United Kingdom in approximately three weeks.
U.S. officials readily acknowledge that visa wait times are a major problem. Speaking at the Skift India Summit on Tuesday, Eric Garcetti, the U.S. ambassador to India, told conference attendees that President Joe Biden specifically asked him to address the backlog. “I bet this is the only time the president of the United States has ever said to the ambassador, ‘Please work on visa issues,’” Garcetti said.
Why the world's leading travel brands are investing heavily in Indian tourists
Visa waivers have a proven track record and give countries a competitive edge, insists Morgenstern, CEO of Agoda. After Azerbaijan introduced the ASAN system, which processes e-visas within three business days of application, interest from Indian tourists soared, and arrivals quintupled in two years. “Both Thailand and Malaysia introduced visa waivers for Indian tourists late last year, and that led to an immediate surge in searches from India to both markets,” says Morgenstern, noting that searches for Thailand are up 46%, even though Thailand was already the most popular destination for Indian travelers. “In the two months after the visa waiver came into effect, Bangkok overtook Dubai as the most booked destination city for Indians.” However, the emirate wasn't about to be outmaneuvered. In February, Dubai introduced a five-year multiple-entry visa for incoming Indian travelers.
Another reason India is such an attractive source market is its young population. Only 7% of India’s population is 65 or older, compared with 14% in China and 18% in the United States, according to a recent Pew Research Center report. People under 25 make up more than 40% of India’s population. “In fact, there are so many Indians in this age group that roughly one in five people under 25 worldwide lives in India,” the Pew report notes. “Looking at India’s age distribution another way, the country’s median age is 28. By comparison, the median age is 38 in the United States and 39 in China.”.
“It is an extremely well-educated and digitally savvy population,” says Bremner, adding that more than 75% of Indian millennials and Generation X traveled in 2023, according to Euromonitor data.
“Indian travelers are more committed to ecotourism and sustainability than their global counterparts. They’re open to all kinds of experiences, from luxury to eco-adventure,” Bremner continues. “And, of course, these are high-spending trips. It’s no surprise to me that destinations from Asia to the Middle East, Europe, and the United States are chasing after them.”.
