India’s economic rise: Larger share of growing middle class travels overseas
16 March 2015
A new report by Canadean finds that a growing proportion of the middle class in India travels overseas, with Thailand remaining the preferred hot spot for leisure tourism, while the US is rising in popularity as more Indians come to the States to visit family.
According to Canadean, Indians made over 18 million outbound trips in 2014, which is 2 million trips more than in 2013. At the moment, barely 2% of India’s population travel abroad, as most Indians still cannot afford overseas flight prices. However, the country’s middle class has increased by more than 10% over the past five years and is set to grow from around 300 million at present to approximately 600 million by 2030. Gillian Kennedy, analyst at Canadean says: “The rapid growth of the Indian middle class is turning this demographic into a major source market, with tourism boards vying to tap into this potential tourist goldmine.”
Thailand remains hot spot for Indian leisure tourism
Indian travellers characteristically have been avid business travellers, with 40% of all 2014 departures accounting for business trips. As a comparison, China only recorded a share of 21% for business travel. However, Canadean expects that the changing trends in India’s economy will spur a rise in leisure travel. One of the key destinations for Indian leisure tourism is Thailand, with over one million travelling there in 2014, an increase of 8.3% on the previous year. Kennedy says: “This growth can be attributed to cheap tourism packages and limited visa entry requirements. Geographical proximity and low currency conversion rates also contributed. Moreover, the excessive heat in most parts of India during the summer means that Thailand appeals as a cheap yet close destination.”
More Indians travel to the US to visit friends and family
Canadean’s report also finds that the US is one of the fastest-growing outbound destinations, increasing to over 960,000 visitors from India in 2014 – a number that will reach the one million mark for the first time in 2015. “A quarter of all outbound trips from India to the US are for the purpose of visiting friends and relatives and the rising disposable income among the middle class means that more Indians will be able to do so in the future,” says Kennedy. A traveller from India spends between US$500 and US$1,500 more than the average international traveller while in the US. “This means that Indians are a lucrative source of income for the US service industry, as their prime interests include sightseeing, nightlife, entertainment, theme parks, beaches, water sports and shopping,” adds Kennedy.
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Indian girl on the beach.
Total household income before tax in India (%).
All numbers used in this text are based on Canadean Travel and Tourism IC's report 'Market Insights; India: Source Market Report.'
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