India’s surging middle class is projected to spend as much as $144 billion a year on international travel by 2030. And hotels, airlines and cities are spending millions to land them.
By Suzanne Rowan Kelleher, Forbes Staff
Last week, hundreds of global travel professionals gathered in Delhi for the inaugural Skift India Summit and the opportunity to glean valuable insights from the CEOs of major travel brands, including The Oberoi Group, OYO, Agoda and the country’s flag carrier, Air India. “India is having a moment,” explains Brian Quinn, head of event programming at Skift, “with the India outbound traveler poised to become the biggest global force in coming years.”
A decade ago, you could have said the same about Chinese tourists. Back in 2014, some 117 million Chinese tourists traveled internationally, which was a 20% increase from the previous year. But 10 years and one pandemic later, Chinese outbound travel still hasn’t rebounded to its pre-Covid heights, while the energy and focus of the global tourism machine has shifted southeast—to India.
With more than 1.4 billion people, India now has the world’s largest population and the fifth-largest economy. Outbound travel from India is growing much faster than from any other country, which has led to a flurry of predictions that have travel brands salivating.
“There’s such huge 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 doubling from 2019. And then on the spending side, it’s even better, going from $35 billion in 2019 to $84 billion in 2030,” she says. “Essentially, India is jumping up the ranks and will be the sixth-largest outbound source market globally by 2030, after China, the U.S., the U.K., Germany and France.”
A 2023 report by Nangia Andersen, the Indian arm of Andersen Global, forecasts that Indian outbound travel will grow at an 11.2% compound annual growth rate (CAGR) between now and 2032—which roughly aligns with Euromonitor’s prediction for tourist volume. If these projections bear out, then another, wilder prediction may not be so implausible after all: organizers of the Arabian Travel Market (ATM), an industry conference to be held in Dubai in May, have touted that India’s outbound market will be worth $144 billion a year by the end of this decade.
And a recent report from McKinsey is similarly bullish on the longer-term prospects for Indian tourism. “India’s outbound travel has the potential to grow from 13 million trips in 2022 to over 80 million in 2040,” the authors write. “If India follows China’s outbound travel trajectory (which it could, due to similarity in population size and per capita income trajectory), then Indian tourists could make 80 million to 90 million trips a year by 2040.”
Given all the hype, travel brands have, naturally, begun heavily courting Indian tourists, often by tapping celebrities as influencers. Bollywood icon Shah Rukh Khan promotes Dubai and Katrina Kaif, a British actress who makes Hindi-language films, professes her loyalty to Accor. Actor Ranveer Singh appears in ads for Abu Dhabi, while his wife, Deepika Padukone, is the global brand ambassador of Qatar Airways. Meanwhile, Neeraj Chopra, the reigning Olympic gold medalist and world champion in javelin, has been enlisted to promote Switzerland’s spectacular alpine landscapes.
Yet before India’s outbound travel can reach its full potential, industry experts say, the volume of flights in and out of the country—a number mutually decided by the two respective governments—must increase dramatically. There were roughly 14% more flight routes by city pairs to and from India last year compared to 2019, according to data from FlightAware. Right now, airlines are operating just 18 scheduled passenger flights each week from India to the United States—up from 14 in 2019.
Some destinations have made policy tweaks to boost capacity. In late 2022, Canada lifted the cap 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. South Africa Tourism, meanwhile, has teamed up 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 tiny Buddhist kingdom.
Airlines are taking note of India’s growing importance as well. Most notably, Singapore Airlines inked a deal in late 2022 with Tata Group, paying a reported $250 million for a 25% stake in Air India. Last November, Singapore Airlines CEO Goh Choon Phong told Forbes Asia of his plans to make India a new hub. “You can just tell how much potential there is,” Goh said. “India is growing but it’s significantly underserved.”
Hotel CEOs are also being seduced by the dizzying economic forecasts. “We just are blessed by the increase of demography in the world and blessed by the increase of households that want to travel,” Sébastien Bazin, CEO of the French hospitality giant Accor, told investors on the company’s most recent earnings call in February. He offered a short lesson on global economics, noting that the world’s emerging middle-class population exploded by one billion over the last 10 years. “Half of those are from India,” he emphasized. “We probably can wisely say that for the next 10 years, demand will no longer grow 3% to 5%, but probably 4% to 6%. You very well could be looking at a 3x demand over supply. And a lot of it, again, has to do with India alone, which is [expected to add] 500 million [to its] emerging middle class.”
“India is definitely an economic bright light,” echoes Bremner, noting that the country’s current 8% economic growth rate 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 travel source after Canada, Mexico and the United Kingdom. The average Indian tourist also spends money when traveling internationally—roughly $5,252 per trip, according to the last six months of data collected by the National Travel & Tourism Office (NTTO), the agency within the U.S. Department of Commerce that tracks tourism statistics. Comparatively, 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 needs to make entering the country much easier. “I am a firm believer that less friction will lead to more travel,” says Omri Morgenshtern, CEO of Agoda, the largest online travel agency in Asia. “Friction can be removed by adding direct flights, as well as by the introduction of visa waivers or by being able to book accommodation, flights and activities on one app.”
Currently, 62 countries permit Indian travelers to visit without first obtaining a visa—that’s 10 more than in 2016, the year that the Henley & Partners Passport Index launched. But the United States neither grants visa-free entry to Indian tourists nor does it make procuring a visa fast and easy.
While the U.S. is approving more visas for Indians today than in pre-pandemic years, the average visa wait time is still about 10 months, according to the U.S. State Department website. Before a leisure trip to America, 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. In comparison, Indian tourists can get a visa for Canada in just 23 days or the United Kingdom in roughly three weeks.
U.S. officials readily acknowledge that visa wait times are a big problem. Speaking at the Skift India Summit on Tuesday, Eric Garcetti, the U.S. Ambassador to India, told conference-goers that President Joe Biden specifically asked him to tackle the backlog. “I bet it’s the only time the United States president has told the ambassador, ‘Please work on visa issues,’” Garcetti said.
Visa waivers have a proven track record and give nations a competitive edge, insists Agoda CEO Morgenstern. After Azerbaijan introduced the ASAN system, which processes electronic visas within three working days of submitting an application, interest from Indian tourists skyrocketed and arrivals increased fivefold in two years. “Thailand and Malaysia both introduced visa waivers for tourists from India late last year, and that led to an immediate increase in searches from India to both markets,” Morgenshtern says, noting that searches for Thailand grow by 46% even though Thailand was already the top searched destination by Indians. “In the two months after the visa waiver came into effect, Bangkok overtook Dubai as the most-booked city destinations for Indians.” Yet the emirate was not to be outmaneuvered. In February, Dubai introduced a five-year multiple-entry visa for inbound Indian travelers.
Another reason why India is such an attractive source market is its youthful population. Only 7% of India’s population is 65 years and older, compared with 14% in China and 18% in the U.S., according to data from a recent report from the Pew Research Center. People under the age of 25 account for more than 40% of India’s population. “In fact, there are so many Indians in this age group that roughly one-in-five people globally who are under the age of 25 live in India,” notes the Pew report. “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’s an extremely well-educated populace, very digitally savvy,” says Bremner, adding that more than 75% of Indian millennials and Gen Xers traveled in 2023, according to Euromonitor data.
“Indian travelers are more engaged with ecotourism and sustainability than their global counterparts. They are open to all kinds of experiences, from luxury to eco-adventure,” Bremner continues. “And, of course, they are high spending. I’m not at all surprised that destinations from Asia to the Middle East and Europe and U.S. are chasing them.”
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