Skift India Summit 2024: Trends Driving the Travel Boom

On March 19, the Skift India Summit kicks off. As a research analyst deeply embedded in the Indian travel industry, I am excited to learn more about the trends shaping India’s tourism boom.

Here’s what I’m focused on:

The rising middle class: The expansion of India’s middle class is a pivotal force propelling the country’s tourism growth. With a growth rate of 6% annually, this demographic represents 31% of the population and is projected to reach 60% by 2047. 

This young and dynamic segment, with 65% under 35 years old, contributes about 50% of the nation’s total income. It creates a robust demand for travel services driven by rising incomes and evolving lifestyles.

The digital revolution: Apps like MakeMyTrip, Booking.com, and TripAdvisor have transformed travel planning and experiences. The introduction of budget-friendly and flexible payment options, such as ‘travel now, pay later’ schemes, is making international travel more accessible, particularly for the middle-class travelers.

These companies are strategically focusing on cultural touchpoints, with the influence of movies extending into travel aspirations, and Indian celebrities becoming brand ambassadors for various destinations.

More travel options: Unique travel trends are reshaping the industry, with a noticeable shift towards experiential travel, eco-tourism, and offbeat destinations. This growth of travel options makes the industry more inclusive and appealing to a wider audience. Global collaboration and partnerships within the travel industry, as Indian companies form alliances with international counterparts, contribute to the development of a robust travel ecosystem, enhancing the global reputation of Indian tourism.

Obstacles Blocking India’s Tourism Growth

Despite the remarkable growth, India’s tourism sector faces significant challenges. Infrastructure constraints are a major concern, with a substantial gap in aviation markets compared to China, despite India surpassing China as the world’s most populous country. While India boasts the world’s third-largest aviation market, China’s fleet is almost five times larger, highlighting the need for investment.

Price sensitivity is another crucial obstacle. According to a Skift Research survey, 13% of Indian travelers cited high prices as a deterrent for international travel in the next 12 months, and 20% mentioned financial constraints. India’s average expenditure per outbound trip has improved but still lags China. 

In 2019, China spent $1,646 per outbound trip, while India spent $1,062. Closing this expenditure gap is vital for India to strengthen its position in the global outbound tourism market.

Top Concerns and Priorities of Indians Traveling Abroad

According to our in-house survey of Indian travelers, Indian travelers exhibit a diverse range of priorities and concerns when traveling abroad, offering insights into their travel preferences and expectations:

Travel Priorities:

• Relaxation and Retreat: 9% of respondents prioritize relaxation and retreat, indicating a desire for peaceful and rejuvenating experiences.
• Natural Beauty and Adventure: 14% of respondents value natural beauty (8%) and adventure (6%), suggesting a preference for scenic destinations and outdoor activities.
• Convenient Accessibility: 8% of respondents prioritize convenient accessibility, highlighting the importance of hassle-free travel.
• Fulfilling Travel Bucket List: 7% of respondents prioritize fulfilling their travel bucket list, indicating personal travel goals and aspirations.
• Cultural Exploration: 6% of respondents prioritize cultural exploration, indicating a desire to experience and understand local cultures.
• Shopping Experience: 6% of respondents value the shopping experience, indicating an interest in local goods and souvenirs.

Travel Concerns:

• Visa and Entry: Visa-related issues, such as on-arrival visa or lenient visa regulations, are a concern for 4% of respondents, highlighting the importance of seamless travel processes.
• Language and Communication: Availability of English-speaking tour guides, hotel staff, etc. (4%) is another notable concern, emphasizing the need for effective communication during their journeys.

Attracting Indian Travelers

To appeal to India’s growing middle class, travel brands can capitalize on several trends that resonate with Indian travelers. With 88% of Indian travelers motivated by discounts, implementing a robust discounting strategy can be compelling. Exclusive promotions can attract price-sensitive travelers, driving bookings.

Recognizing the enthusiasm of Indians for sports events, brands can create premium sports packages. These may include tickets, transportation, and unique experiences.

Understanding Indian travelers’ preference for bundled travel options, brands can offer attractive packages including flights, hotels, and rental cars. This aligns with customer preferences and opens additional revenue opportunities. Additionally, early booking trends among Indians suggest the need for optimized pricing strategies.

Impact of Climate Change on Indian Travel Preferences

Climate change is significantly influencing Indians’ travel preferences, with a strong emphasis on sustainability. According to Booking.com’s Sustainable Travel Research Report, a staggering 97% of Indian travelers express their intention to travel more sustainably over the next 12 months.

However, challenges such as perceived high costs and a limited supply of sustainable options pose significant barriers to realizing this goal.

Tourism Initiatives to Attract the Indian Outbound Traveler

Recent tourism initiatives by countries like Thailand, Vietnam, Sri Lanka, and others, including visa waivers and streamlined processes, highlight the concerted efforts to tap into this burgeoning market. 

Furthermore, digital transformations in visa applications, increased connectivity, and strategic roadshows by countries such as Australia, Russia, Saudi Arabia, Vietnam, and Türkiye underscore the understanding of the value that Indian travelers bring.