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Indian travelers spend a lot, but only 1% go abroad

by SuperiorInvest

The world-famous India Gate monument in Mumbai, India, was built during the 20th century to commemorate the visit of King George V and Queen Mary. It is located on the waterfront of Apollo Bunder area in South Mumbai and is the main tourist attraction of the city.

Darren Robb | The Image Bank | fake images

India’s travel landscape is changing as the country emerges as a powerhouse in the tourism sector.

Their willingness to spend big while traveling is disappearing, but research shows that most Indians travel domestically, not abroad.

Indian travelers took 1.7 billion leisure trips in 2022, but most never left the country and only about 1% traveled abroad, according to Booking.com and McKinsey.

Indian travelers are projected to take 5 billion leisure trips by 2030, and 99% of them will also be within the country, according to the report released in October.

The world’s most populous country is expected to be the world’s fourth-biggest travel spender by 2030, largely due to a growing middle-income population that will see household income grow by $35,000 annually by then.

Additionally, the population is young, with a median age of 27.6 years, “more than ten years younger than that of most major economies,” McKinsey said on its website. “What’s more, consumption of goods and services, including leisure and recreation, is projected to double by 2030.”

Travel and tourism spending is expected to reach $410 billion, an increase of more than 170% from $150 billion in 2019, according to the report.

These are the 10 best places for Indians traveling within their own country, according to Booking.com and McKinsey.

  1. New Delhi
  2. Bengaluru
  3. Bombay
  4. Chennai
  5. Pune
  6. Hyderabad
  7. Gurugram
  8. Jaipur
  9. Cochin
  10. Calcutta

According to the ‘How India Travels in 2023’ report, around 2,000 Indians and 42,000 global tourists aged 18-54 booked leisure trips in 2022 and plan to do the same this year.

New Delhi, Bengaluru, Mumbai and Chennai retained the top four spots from the previous study in 2015; Kochi is the only new city on the list.

“India’s travel ecosystem is maturing and there are multiple government schemes that are making the country more connected and ensuring it becomes a tourism hub,” Kanika Kalra, managing partner at McKinsey Mumbai, told CNBC.

Smaller cities are gaining ground

The 10 most visited cities are highly populated destinations, but that could soon change.

More and more Indians are looking to discover smaller urban places, including those in Tier 2 or 3 cities, Kalra said, adding that Kochi is a Tier 2 city.

Tier 2 cities in India are those with a population of between 50,000 and 100,000, while those with between 20,000 and 50,000 residents are classified as Tier 3 cities, according to India Briefing.

Tourists shopping for clothes at a local street market in Jodhpur, India, on November 22, 2022.

Mayur Kakade | Moment | fake images

Apart from cosmopolitan cities like New Delhi and Mumbai, others like Jodhpur, Dharamshala, Bodhgaya, Bilaspur, Kodagu and Raipur are also attracting the attention of international hotel chains eager to gain market share in India’s booming travel industry.

“Branded hotels are currently focusing on Tier 2 cities for expansion due to growing business opportunities and increasing willingness of travelers to pay for standard services,” Deepak Rao, director of revenue management, said in the report. of Hyatt Hotels in India and Southwest Asia. .

French hotel chain Novotel opened its doors to travelers in Jodhpur in May, while Radisson Hotel Group announced in June that it will start welcoming visitors to Raipur in 2025.

About half (52%) of hotels in Tier 2 and 3 cities will be branded hotels by the end of 2023, up from 27% in 2015, the report showed.

The growing interest in traveling to smaller Indian cities is largely attributed to the transportation infrastructure push that is underway, said Mckinsey’s Kalra.

In its annual budget announcement in February, India’s finance ministry said it plans to increase capital expenditure by 33% to 10 trillion rupees ($120.96 billion), as the country is set to become the second largest economy by 2075.

Indian airlines have ordered more than 1,000 new aircraft, which will take the total number of aircraft to between 1,500 and 1,700 by 2030, the report said.

“So we will see this landscape change quite dramatically and we will see a new wave of travelers to smaller cities,” Kalra said.

Main international destinations

Of the 1% of Indian travelers who travel abroad, these are the top 10 places they visit.

  1. Dubai
  2. bangkok
  3. Singapore
  4. London
  5. Paris
  6. Ho Chi Minh City
  7. Ubud
  8. Hanoi
  9. Phuket
  10. Kathmandu
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