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Disposable Income, Digital Media & More: What’s Boosting India’s Outbound Travel?

Until a few years ago, an international trip was a privilege and a luxury that few people could experience. In 2019, international travel is for everyone. Over the years, the number of outbound travels by Indians has increased drastically. In 2016, 21.9mn people travelled abroad and spent about $25bn, and in the span of next 6 years, by 2025, this number is expected to grow by a whopping 110.5%, to 46mn and around $45bn spent on outbound tourism-related expenses.

Indians travel abroad for vacations, celebrations, education, escapism, business and of course to boost social media presence. As per Pacific Asia Travel Association (PATA), 40% of all outbound trips are for business purposes, while visiting friends and relatives (VFR) comes second with 31%, and travel for leisure, third, with 29%. Of late, Indians have also started travelling for the sake of exploration or to experience different cultures and traditions.

Overall, the top foreign destinations are Dubai, Saudi Arabia and Bahrain. This is predominantly due to blue-collar workers travelling for employment. For tourism purposes, Thailand and France make it to the top three along with Dubai.

The beautiful Krabi and Koh Phi-Phi island seem to be primary reasons for Indians to travel to Thailand, along with the Bangkok-style street food.

Honeymooners and young couples tend to find France an ideal destination to soak up some culture and walk the cobbled pathways trodden by Hemingway himself. The big question, however, is: Why has outbound travel boosted so significantly?

Outbound travel has exploded mainly due to the rise in the disposable income of the middle class. In the last decade, the economic activity in India has improved, leading to the expansion of income of high and upper-middle households.

The economic surge has greatly boosted Tier II and Tier III cities, which will continue to increase demand for outbound travel and significantly contribute to the next phase of growth. Another key reason for growth from Tier II and Tier III cities is that the cost of internal travel in India is almost the same as foreign travels, especially to locations such as Bangkok, Thailand and Singapore.

Further, the easy and tempting option of travelling with EMIs or travel loans. Though historically, India has been a savings economy and borrowing was shunned upon, Gen Y & Gen Z have now become comfortable with debt and are willing to enjoy immediate consumption when they can pay in the future. The acceptance for instant gratification started with housing loans and progressed to electronic consumables, furniture, phones and even high-value grocery purchases. So, taking a step beyond these and taking up an EMI for travel is a very tempting option.

And of course, in a country of over a billion people, the youth is one of the most important steering factors in each and every course the nation takes. In today’s society where the world of Instagram, Facebook and Twitter have taken over the real world, sharing one’s experiences online has become a must. This does not come without a price tag. The total currency exchanged by outbound Indian travellers is around $22 billion, which is likely to grow to $28 billion by 2020.

In the digital age, everything that is available online influences the decisions that a person makes, and this is especially the case for the digitally equipped Indian youth. Today, the digitalisation has finally led to India’s youth becoming more “confident, adventurous and wealthier, and more willing to spend”, hence booming outbound travel even more. Plus, the convenience of planning a trip in just a few minutes, and making travel bookings has contributed to this growth.

CAPA provides some interesting statistics about the influence of technology in this sector:

In 2016 there were 432 million internet users in India, which is estimated to have increased to 465 million as of the end of 2017.
Mobile devices account for 77% of internet access by urban India14, and 92% of internet access in rural areas.
In July 2017, India overtook the US to have the largest number of Facebook users. Social media plays an extremely influential role in fuelling the desire to travel and in the choice of destination and activities.
Online travel agents (OTAs) have grown to become a major force in the distribution of domestic and international travel.

Further, by 2022 around 830 million smartphone users in India are expected to be consuming around 18 GB data per month. This is further going to add to the digitization of the Indian economy.

All these factors, right from an improving economy to the digital shift, have boosted outbound travel from India. The numbers are looking great, and they are only expected to get better in the coming years.

What is your number one reason for travelling abroad?

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