India’s outbound tourism market is already huge and showing no signs of slowing down. It’s time for the global tourism industry and businesses to pay attention in the hope of capturing market share from the second largest market (Skift).
In the last few years, all eyes in the tourism industry are on China’s outbound tourism market. But now, India is proving that it will be the next one to watch. With the world’s second-largest population, India boasts one of the fastest-growing major economies in the globe. We’ve seen signs of the power of this market, as well as signs that real growth is yet to come.
Indian outbound tourism will surpass US$42 billion in 2024 (Nangia Andersen LLP & FICCI).
The pandemic period aside, India’s outbound tourism market has been one of the fastest growing in the world over the past few years, following only China. Before the pandemic, the Indian outbound tourism market was expected to grow at a compound annual growth rate of 7.2% from 2016 to 2028.
In 2021, Indians spent about US$14.3 billion for traveling overseas, compared with US$22.9 billion in 2019 (UNWTO). While the drop in spending could be due to the pandemic, these figures show the enormous value from Indian outbound travelers.
Overall economic growth, a large and increasingly affluent middle class, along with the increasing convenience and connectivity of air transport have fueled an increase in outbound travel from India. In addition, the needs of niche markets in tourism such as medical tourism, wellness and adventure tourism also contribute to this growth. The increasing usage of smartphones and the internet has contributed to the rise of online bookings. Barriers remain as the tourism industry is recovering, but there are optimistic signs of a strong return of the Indian outbound tourism market in the next few years.
Support from government regulations is also one of the levers for the development of this market. In particular, to facilitate business activities and promote the participation of Indian companies in outbound tourism, the government may consider steps such as increasing direct connections to popular and emerging destinations, allowing foreign cruise ships in Indian waters, or trying to coordinate with stakeholders to boost the outbound tourism market.
With its growing economy, young population and increasing middle class, India is ideally positioned to be one of the potential outbound tourism markets, and bring a great revenue to many destinations around the world.