From India to the world: Unleashing the potential of India’s tourists

Boosted by rising economic prosperity and a fast-growing economy, India is set to be an important global source market for leisure travel. India is now the fifth-largest economy, and its population has surpassed China’s to become the largest in the world, at over 1.4 billion people.¹World Bank national accounts data, GDP (current US$) India, accessed September 2023; World population prospects 2022, United Nations Department of Economic and Social Affairs, Population Division, 2022. And the population is young—the median age is 27.6, more than ten years younger than that of most major economies.²World population prospects 2022. What's more, consumption of goods and services, including leisure and recreation, is forecast to double by 2030.³“India’s impending economic boom,” Morgan Stanley, November 8, 2022. Adding a strong postpandemic travel recovery, and a growing appetite for international travel, these factors point to India’s significant potential for outbound tourism.

Through nine charts, this article unpacks trends and opportunities in the Indian travel market. Selected country examples shed light on how destinations can enhance their value propositions to attract and delight Indian travelers.

Indian globetrotters set to soar

The country’s forecast growth in GDP per capita, accompanied by a growing propensity for international travel, could lead to a wave of Indian travelers setting out to see the world. 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.

Racing ahead: Indian wanderlust is taking off

Prior to the COVID-19 pandemic, India’s outbound tourist market was among the fastest-growing markets in Asia. India has already recovered 61 percent of its prepandemic market, with 13 million outbound tourists in 2022.¹McKinsey analysis based on data sourced from Oxford Economics. This represents a much quicker recovery than most Asian countries.

Top picks: United Arab Emirates reigns, new gems discovered

Where do Indian travelers choose to go? Proximity is a key decision factor. In fact, around 70 percent of travelers choose nearby destinations.¹India tourism statistics 2020, Ministry of Tourism, Government of India, January 2021. With a travel time of less than four hours, and a large Indian diaspora, the Middle East is a destination of choice for around one-third of Indian travelers, closely followed by South Asian destinations. For long-haul trips, North America and Western Europe stand out as preferred choices.²Based on data sourced from Oxford Economics. While the top destinations have remained fairly consistent over the past decade, others are shaking up the rankings.

Regional flavors; global explorers

Indian travelers are not a homogenous group; destination preferences vary across regions. For example, travelers from North India constitute a large share of travel to the United States and Canada, while two-thirds of travelers from Kerala prefer destinations in the Middle East.¹India tourism statistics 2020, Ministry of Tourism, Government of India, January 2021; MarketIS. Purpose of travel, distribution of the diaspora, and cultural linkages play a role in destination choice.

Destination matchmaking: Five ways to build value

Destinations looking to harness the full potential of the growing Indian market could consider tailoring their value propositions in alignment with one or more of the five key decision points that influence where travelers choose to go. Destinations might ask the following questions to determine which factors align with what Indian travelers look for when planning a trip.

1. Research. How attractive and popular is the destination with Indian tourists?
2. Accessibility. Is it easy to obtain a travel visa?
3. Connectivity. Are there convenient flights that connect India to the destination?
4. Booking. Is the destination affordable for Indian travelers, and is there an adequate supply of hotels in the appropriate price range?
5. Travel experience. What is the on-the-ground experience like for Indian tourists in terms of weather, attractions, and whether or not the local population is English speaking?

There’s something for everyone in Thailand

Over the past decade, Thailand launched 50-plus marketing campaigns specifically for Indian consumers, travel agents, and niche businesses. For example, marketing campaigns directed at Indian wedding planners and couples positioned Thailand as a top choice for weddings and honeymoons. Campaigns for travel agents showcased Thai culture and tourist attractions, catering to budget travelers and high-spending groups alike.¹“Thailand named ‘Best Honeymoon Destination’ 2nd year running by Travel & Leisure India,” TAT news, December 23, 2021; “Thailand a favourite golfing destination for Indian golfers,” TAT news, August 16, 2021.

Azerbaijan’s visa policy wows Indian travelers

Complicated visa application processes, or long waiting periods, can influence decisions around vacation destinations. Leisure travelers can be swayed by how difficult or easy it may be to obtain a visa. In 2017, Azerbaijan introduced the ASAN system that processes electronic visas within three working days of application. Popularity with Indian tourists skyrocketed thereafter, with annual arrivals increasing fivefold by 2019. Combined with direct flights from India, and restaurant and accommodation options suitable for Indian tourists, the country became increasingly attractive for Indian travelers.¹Prashant Nayak, “Azerbaijan ready with new offerings for Indian travelers,” Travel Trade Journal, April 2022, Volume 12, Issue 6.

Vietnam takes off: Direct flights skyrocket arrivals

In 2019, Kolkata was the only city in India with direct connectivity to Vietnam, and three other Indian cities offered sporadic flights. To stand out from Southeast Asia neighbors and gain popularity with Indian travelers, Vietnam improved direct connectivity from India by increasing flight frequency and adding new routes. Indian arrivals are now at an all-time high.¹Data from Google trends and Diio Mi.

The luxury of Dubai is within reach

In 2022, India was the largest source market for leisure travelers to Dubai.¹“1.24 million Indian tourists visit Dubai in first 9 months of 2022,” Business Standard, December 10, 2022. The city is known for its luxury offerings and, perhaps surprisingly, also offers a wide range of accommodations, such as 3-star options. And flights from India are affordable when compared with flights of similar distances. Taken together, these factors make the luxury of Dubai accessible to Indian travelers.²MarketIS.

Bollywood magic in Switzerland

While only 9 percent of Indian travelers focus on long-haul destinations in Western Europe, Switzerland has been an Indian top-20 destination for over a decade. Switzerland may be popular, as it feels familiar to Indian travelers: many Bollywood hits feature Swiss attractions, there are plenty of Indian restaurants and cultural festivals, and English is widely spoken.¹“Switzerland and romantic songs of Indian movies,” Solo Backpacker, September 20, 2019; India-Switzerland relations, Ministry of External Affairs, Government of India, February, 2020; Festival of India in Switzerland and Liechtenstein – Events, Ministry of Culture, Government of India, 2018; Swiss hospitality for Indian guests, a joint report from HotellerieSuisse, Berne and Switzerland Tourism, November, 2019.

Namaste, India!

India is a high-potential, growing source market for leisure travel. Destinations looking to attract Indian leisure travelers could consider targeted marketing, an expanded range of affordable options, and customized on-the-ground hospitality that caters to Indian preferences. Destinations may need to take steps now to build a strong value proposition and distinguish themselves as a preferred location. To do so, they could take action in the following areas:

• Connect. Make travel seamless, for instance, by simplifying visa application processes and providing direct connectivity.
• Entice. Offer affordable packages with a range of choices that appeal to specific groups, such as families, couples, or solo travelers.
• Welcome. Make the experience traveler-friendly, for example, by providing appropriate food and beverage options like vegetarian and Indian cuisine.
• Attract. Design targeted campaigns to showcase experiences that Indian travelers want, and use appropriate channels to get the word out, for example leveraging over-the-air partnerships and social media.
• Unlock. Include the MICE (meetings, incentives, conferences, and exhibitions) and business tourism segments in marketing efforts to boost interest in leisure travel.