India, India : everyone wants a part of it

Regarding many figures, India’s potential, as a major source of the outbound travel market, is tremendous. A buoyant economy that rises by 9% each year, an upper class estimated to 40 million people with revenues above US$ 20 000 and a rising middle class reaching 300 million Indians as well as a relatively young population 25 year old in average - of over 1 billion are some figures showing such potential. Evolving mindsets and customised offers from the industry’s major players with easier access to information, via Internet and tourism boards, have increased the Indian’s will to travel. According to the United Nations World Tourism Organisation, no less than 50 million Indians are expected to travel abroad by the year 2020 and therefore representing a sizeable challenge to these countries ready to welcome them.Indian outbound tourism has shifted over the years. Reserved to a certain elite of the nation, new travellers, emerging from the middle class, have created new trends and niches. From country hopping on a package tour to single destination trips experienced by the DINKS population and business travellers, we will see more and more Indians throughout the world. A country, like Switzerland, “ has sold the Swiss destination through the movie industry and its link with Bollywood, many European countries, like France or Austria, have multiplied signals in the same direction. Australia, identified as an ideal destination for adventure and sports, has also developed its communication towards Indian students in search of higher education facilities. One thing is certain, every countries want to take a part of it and hope to further enter Indian majors cities, such as Mumbai or Delhi, to promote their assets.In the past, travelling outside Indian’s borders was a bit complicated both in terms of disposable income for its population and due to heavy bureaucratic strains. Government’s incentives towards Indian outbound tourism have improved significantly over the years. The “Open Sky Policy” allowed international carriers to operate outbound services (before 2004 it was only possible for the two national companies Air India and Indian Airlines) and authorised the arrival of low cost companies. These measures have led to the increase by 15 to 20% each year in international air traffic as 95% of Indians travel by plane. Powered by unique demography and rising incomes of its combined 3.4 billion people, Asia-Pacific could become the “largest regional aviation market in the world within the next three years. Furthermore, obtaining the appropriate documents, like passports and visa, has also been made easier as well as foreign exchange regulation have further opened India to the outside world. Hence, annual foreign ex-change allowance increased twenty fold since the eighties from US$ 500 to US$10 000 per person and US$ 25 000 per trips for corporate travellers.Inbound flights are more expensive than going away for Indian travellers. According to some travel specialists, airfares are 10 to 15% cheaper on international fares than domestics. Sachin Rampal from Thomas Cook India explains: “Going to Kerala for a holiday might be more expensive than going to the Far East. So people don’t mind spending the same amount or even chipping in some extra money and going abroad.” Furthermore, explosive RevPAR in most regions as well as the shortage of room supply lead the Indian middle class to look elsewhere. Indian outbound travels peaked at 8.3 million in 2006, a 20% rise compared to 2005. Such figures are due to increase by 10% each year until 2009, hence going towards the 10 million outbound travellers. More than 40% of the market is towards Asian regions, making India the region’s fourth largest source market behind China, Japan and Korea. The top five destinations, by percentage growth to 2009 will be Macau, Papua New Guinea, China, Cambodia and Malaysia as regard Asian region. First timers will easily go towards nearby foreign destinations with no significant cultural differences. Whilst Nepal or Sri Lanka are chosen for their vicinity. South Asian countries like Singapore, Thailand and Malaysia are respectively selected for shopping, nightlife entertainment and price.Europe accounts for nearly 20% of Indian outbound market with more than 800 000 travellers each year. It tops the list for people with a bigger budget who wants to experience the rich cultural heritage and feel the historical grandeur of cities like Paris, Rome, London or Berlin. Either experienced or first time long haul travellers, Indian nationals travel to Europe for leisure and holiday, to visit friends and relatives (VFR’s) as well as for business. The length of stay generally lies between 10 to 21 days dominated by package holidays, FIT (Fully Independent Travel) travellers are also in constant progression. The United Kingdom, for historical ties as well as business relationships since India has become the second largest investor in the UK with investments around 2 billion US$, is the prime destination from Indian out bounders. Followed by Switzerland, Spain and Austria. France is ranked 6th for leisure and 8th for business travellers, considered as an exclusive and romantic destination for luxury, food and wine but also an easy gateway to other European destinations. Paris and the French Riviera are the main spots and are always forecasted by tour-operators on a holiday package. Nevertheless, it is also tagged as an expensive country with English nonspeaking staff. The United States of America (10%) is predicted to be the most preferred destination for Indian travellers in years to come thanks to the strengthening of business ties and the large number of Indians residing in the country. The Middle East (25%) is another popular place for identical reasons.Along with the rise in number of Indians travelling abroad, both the total and per capita expenditure spent abroad have increased. Global expenditure from Indians travelling abroad has been estimated to 6 billion dollars in 2006 allocated to accommodation (20%), meals (15%), site seeing (20%), shopping (20%) and nightlife entertainment (15%). According to the European Travel Commission, average spending per trip of Indian outbound tourists has increased from US$ 611 in 2000 to US$ 822 in 2006. Another survey, made by the Tax Free World Association on Indian travellers, showed that the typical Indian profile is a graduated male business traveller aged between 26 to 44 years. His average spending on travel is estimated to US$ 1 149, a 27% increase compared to 2006. Indian travellers are ranked among the highest spenders. They are well known for being generous and even lavish spenders. On a trip to European countries the average spending has been evaluated from 200 to 570 euros per day, and even more when in Switzerland with a daily expenditure up to 750 euros, making Indians the third highest spenders after Americans (950 euros) and Japanese (800 euros). According to the respective tourism boards they spend on average 190 euros on a visit to Singapore but 570 euros in Spain, second highest spender after the Japanese for the Asian region. The Indian outbound market is constantly growing (25% per year) and such spending manners encourage many countries to open tourism board in India with sustained promotional brand building campaigns. “Fly-Buy Dubai” for the Emirates, “Truly Asia” for Malaysia, “Uniquely Singapore” or “Apéritif à la Française” are some tangible examples.Nowadays travelling abroad is not just a privilege for the happy few. The rise of a middle class as well as access to worldwide information via Internet, medias or again television and cinema have shown signs of maturing by revealing segmentation and niches. The age group, between 24 and 44 years, accounts for 75% of the market. The DINKS (Double Income No Kids) is now a major target for the industry as they are considered as high spenders with their double income disposal. Newly married couples are looked after, between October and February, as 65 000 weddings are celebrated during this period and therefore become potential honeymoon seekers. MICE tourism has been a fast growing segment and is also to consider as they don’t hesitate to go a long way to treat themselves.Even if they are frequent travellers, Indian tourists always book their holidays through a travel agency or tour-operator. They also expect high standard services, English-speaking staff and baggage handlers. As regard food consumption, groups tend to go for Indian food whilst individuals are ready to experiment western cuisine. Nevertheless, value for money stays the main criteria when choosing a holiday destination.Either visiting friends or relatives, on a holiday or business trips, the Indian travellers stay in hotels for 65% of them. Midscale hotels are the first choice (32%), followed by budget (22%) and upscale and luxury (11%). They usually travel between May and August (40%) and more than half is visiting more than one country. As Peter de Jong, Chief executive officer of PATA (Pacific Asia Travel Association) emphasises: “As international travellers, Indians tend to take longer trips and often in large family groups, have a high repeat visitation to preferred destinations and an excellent yield.”Hotel groups multiply incentives towards the Indian outbound market. Marriott organises meeting with some of its hotels representatives from different regions in order to promote its brands on the Indian soil. More than eight destinations are proposed du-ring these road shows. A Marriott official explains: “There are eight hotels participating in each road show, four hotels from South East Asia, two hotels from Dubai and one each for Moscow and London. Each of these destinations is quite popular with Indian business and leisure travellers.”Another niche unveiled by the emerging Indian society is the student going abroad for their education. The urge to fulfil highly qualified positions has further increase the Indian surge for appropriate qualification. For the time being, India has not enough universities to welcome all its students whom, as a result, decide to leave the country. More Indian students are going to foreign universities to pursue their education. In 2002, it was more than 90 000 Indians studying in 49 countries. United-Kingdom, United States, Australia, Belgium are amongst the most preferred destinations. A niche that represents further opportunities to international tourism as it could create a load of overnights for VFR’s visitors.Indian outbound tourism has shifted over the years. Reserved to a certain elite of the nation, new travellers, emerging from the middle class, have created new trends and niches. From country hopping on a package tour to single destination trips experienced by the DINKS population and business travellers, we will see more and more Indians throughout the world. A country, like Switzerland, “ has sold the Swiss destination through the movie industry and its link with Bollywood, many European countries, like France or Austria, have multiplied signals in the same direction. Australia, identified as an ideal destination for adventure and sports, has also developed its communication towards Indian students in search of higher education facilities. One thing is certain, every countries want to take a part of it and hope to further enter Indian majors cities, such as Mumbai or Delhi, to promote their assets.