India’s travel market is buzzing, and there is no denying that. Outbound travel from India has seen a significant spike, with Vietnam emerging as a favoured international destination.
A report from Mastercard’s Economics Institute, titled Travel Trends 2024: Breaking Boundaries, said Indian outbound travel to Vietnam skyrocketed by 248% compared to 2019 levels, followed by the US and Japan, with growth rates of 59% and 53%, respectively.
These figures, compiled for the January-March 2024 period, also indicate a significant shift in traveler preferences. The emerging trends hold promise for the travel sector, considering that India is expected to see nearly 20 million more people entering the middle class over the next five years, it added.
Fastest growing market
“We’re seeing more international trips from travelers coming from India than at any time in history. India is the fastest growing major market in the world now and, in the foreseeable future, it is likely to be an ongoing (growth) story. The desire for travel, jewellery and high-end clothing options will remain very strong with growing disposable incomes, and an aspirational lifestyle,” said David Mann, chief economist, Asia Pacific, Mastercard.
In the first quarter of 2024, Indian airports witnessed a record 97 million passthroughs for both domestic and international air traffic, marking a significant increase compared to a decade ago, when attaining such numbers would have demanded an entire year’s time.
Additionally, according to the report, Indian travelers have extended their trips by an additional day in the year ended March 2024, compared to the corresponding period of 2019. This trend underscores a burgeoning appetite for immersive and meaningful travel experiences. Moreover, cruise vacations have witnessed remarkable growth, surpassing the 2019 highs.
Tourism boom
Despite the strengthening of the US dollar, the outbound Indian travel segment has flourished due to an expanding affluent consumer base seeking luxury experiences. According to the report, the evolving spending patterns mirror the nation’s growing disposable incomes and aspirational lifestyles.
An analysis of Indian passenger arrivals data for popular destinations such as the US, Japan and Vietnam revealed that while a strong dollar may have diverted tourists away from the US, Indian passenger arrivals surged by 59% compared to 2019 levels.
Similarly, Japan witnessed a record 50,000 Indian visitors so far in 2024. “Interestingly, while the US has yet to fully see a recovery to 2019 levels (of inbound travel) in aggregate, travellers coming in from India saw an over 50% increase above the numbers in 2019 arrivals. Vietnam, which recently added direct flights, has seen a two and a half times increase in travel. This reinforces the strength of demand for intra-regional travel as well,” Mann added.
India gains, as China recovery on slow lane
India’s outbound travel story has been compelling, according to the data compiled by the company both from transactions on its platform, and third-party survey, he said.
“Since the end of pandemic restrictions, there is relatively less recovery coming from the Chinese mainland (due to visa restrictions), and we’ve been seeing rapid gains in the amount of travellers in various markets coming from India.”
Overall in 2024, leisure travellers globally are enjoying longer trips, averaging five days, from about four days a decade ago, especially in countries where currencies have weakened against the US dollar, the report said.
These extended stays carry significant implications, such as increased spending per trip, and contribute to stronger economic impact for businesses supporting local economies in the travel industry. For instance, Thailand, where tourism dependence is exceptionally high, additional days make a considerable difference to its economy, the report added.