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Number of Indians holidaying abroad to treble by 2025: report

PTI:  February 12, 2018

New Delhi: The number of Indians holidaying abroad is likely to treble by 2025 and may account for 40 per cent of the international air trips from the country, according to an aviation think-tank report.

The growth in vacations in foreign countries will be driven by tourists from tier-2 Indian cities as well as an increase in budget carriers flying on international routes, the report jointly prepared by the Centre for Asia Pacific Aviation and Expedia group said.

In 2016, there were 21.9 million foreign departures from India, of which 4.8 million were leisure trips.

By 2025 there will be 13.9 million international leisure departures from India, accounting for 40.3 per cent of total projected 34.5 million international departures, according to the report.

The contribution of foreign vacations to the total outbound departures will grow by 10 per cent from 30 per cent in 2016.

Those who travel abroad are a mere 8 per cent of the high income group population of 55 million, which is expected to exceed 100 million people by 2025, said the report titled 'Inflection point for India Outbound Leisure travel'.

Holiday makers from tier-2 cities were expected to play a key role with the size of high income households as well as upper middle income households growing faster there than in metros.

The expanding middle-income segment will see an increase in demand for domestic and international travel, the report said.

"The phenomenon which could have a significant impact on stimulating outbound leisure travel is the long-haul, low-cost model, which has the potential to enhance affordable accessibility to some of the most aspirational destinations for Indian outbound travellers in Europe, North America, Asia and Australia," according to the CAPA report.

It said that by 2025, Indian low cost carriers will operate close to 40 wide-body aircraft, which could generate an additional 2 million annual outbound leisure travellers.

Spurred by greater demand, low-cost carriers have increased their international market share from 14.5 per cent in 2012 to 22.9 per cent in FY 2017-18, with relatively faster expansion in tier-2 cities such as Amritsar, Lucknow and Jaipur, among others, as per the report.

These smaller cities have seen a spurt in outbound travel in the last four years, with the number of foreign trips originating from there growing at nearly double the rate than those in metros.

"Tier-2 cities have seen faster growth over the last four years with a CAGR (compound annual growth rate) of 16.8 per cent compared with 9.1 per cent in tier-1 cities (ie Delhi, Mumbai, Bangalore, Chennai, Hyderabad and Kolkata)," CAPA report said.

CAPA research indicates that the most popular leisure destinations for Indian travellers are Dubai, Thailand, France, Singapore and Malaysia. In fact, these five destinations alone accounted for just over 50 per cent of Indian leisure arrivals overseas.

These holiday spots were followed by Sri Lanka, Hong Kong, Indonesia (primarily Bali), the US and Switzerland.

Millennials, who are more adventurous than their predecessors and are inclined to spend on travel rather than save, will drive the growth in tourism, the report said.

This is also likely to change travel patterns where there is likely to be more solo travelers or a bunch of friends undertaking a journey together instead of large family groups from India, it said.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.