Mint Explainer: How India is leading a shakeup of the global travel industry
Spurned by Schengen, Indians are being swayed this summer by the lure of liberal visas However, interest in travel is flourishing in other regions, leading to a shift in the balance of outbound travel, according to a report by McKinsey & Co titled 'The state of tourism and hospitality 2024'. The report said new groups of travellers are emerging in Eastern Europe, India and Southeast Asia, which have fast-growing pools of first-time tourists. Notably, around 27 million Indians travelled abroad in 2019, before the pandemic.
In 2022, about 20 million Indians travelled overseas and the UAE, Saudi Arabia and the US were the top destinations that year. While the number of travellers from these new markets is increasing, their purchasing power remains comparatively low. According to the McKinsey report, South Asians spend 20% less than Western European travellers, who average $159 a night in total travel spending.
Eastern Europeans spend 40% less, and Southeast Asians spend 55% less, averaging $87.5 a night. Currently the sixth-largest domestic travel market by spending, India is experiencing rapid growth fueled by an expanding middle class. Driven by a robust 6% annual GDP growth, Indians’ travel spending is set to grow 9% a year until 2030, the McKinsey report said.
India’s domestic air passenger traffic is expected to double by 2030, it added, supported by a government initiative to connect underserved airports. Also read: Heat or not, Indians are flying high Indian airlines and hospitality companies are making substantial investments to accommodate this growing demand. In 2023, budget airline IndiGo ordered 500 Airbus A320 aircraft, while Air India placed orders for 250 Airbus and 220 Boeing jets.
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