India is now the fifth-largest economy, and the population has surpassed China’s to become the largest in the world, at over 1.4 billion people, the report pointed out. Another significant aspect is the population is young, with the median age being 27.6, more than ten years younger than that of most major economies. It also cites the fact that consumption of goods and services, including leisure and recreation, is forecast to double by 2030. Adding a strong post-pandemic travel recovery, and a growing appetite for international travel, these factors point to India’s significant potential for outbound tourism, McKinsey says.

McKinsey sees a wave of Indian travellers setting out to see the world, spurred by the country’s forecast growth in GDP per capita, accompanied by a growing propensity for international travel. If India follows China’s outbound travel trajectory, then Indian tourists could make 80 million to 90 million trips a year by 2040.

India is already one of Asia’s key outbound tourist markets. 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 pre-pandemic market, with 13 million outbound tourists in 2022. This represents a much quicker recovery than most Asian countries.

There are a few steady favourite destinations for Indian tourists, the top pick being the United Arab Emirates. The report attributes this preference to proximity. In fact, around 70 percent of travellers choose nearby destinations. 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 travellers, closely followed by South Asian destinations. For long-haul trips, North America and Western Europe stand out as preferred choices. While the top destinations have remained fairly consistent over the past decade, others are shaking up the rankings, the report notes.

In 2022, India was the largest source market for leisure travellers to Dubai. 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 travellers, the report points out.

An important finding of the report is that destination preferences vary across regions. For example, travellers from North India constitute a large share of travel to the United States and Canada, while two-thirds of travellers from Kerala prefer destinations in the Middle East. Purpose of travel, distribution of the diaspora, and cultural linkages play a role in destination choice. The US and Canada attracts a large number of travellers from North India, particularly centres such as Delhi, Chandigarh, Amritsar, Jaipur, Lucknow, Varanasi and Srinagar. Two-thirds of travellers from Kerala visit the Middle East, which is the only region with traffic from non-international airports, indicating connectivity with smaller airports. Compared with other destinations, the UAE attracts a more balanced range of Indian travellers.

McKinsey proposes key decision points for destinations looking to harness the full potential of the growing Indian market. These could include accessibility, connectivity, affordability and travel experience. The report points out how over the past decade, Thailand has been carrying on 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 travellers and high-spending groups alike.

The report cites the case of Azerbaijan to show how easy visa process greatly helps in boosting leisure travel. Complicated visa application processes, or long waiting periods, can influence decisions around vacation destinations. Leisure travellers 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 five-fold by 2019. Combined with direct flights from India, and restaurant and accommodation options suitable for Indian tourists, the country became increasingly attractive for Indian travellers, the report points out.

While only 9 percent of Indian travellers focus on long-haul destinations in Western Europe, Switzerland has been an Indian top-20 destination for over a decade. The report attributes the Bollywood connection to Switzerland for this popularity. Many Bollywood hits feature Swiss attractions, there are plenty of Indian restaurants and cultural festivals, and English is widely spoken there. (IPA Service)