India's burgeoning luxury tourism sector stands as a testament to the country's allure for high-end travellers. With its rich cultural tapestry, breathtaking landscapes, and unwavering commitment to excellence in hospitality, India has emerged as a lucrative market for luxury tourism. While India still attracts fewer tourists than other Asian countries, rising disposable incomes have led to a surge in outbound trips, which hasn’t gone unnoticed. Speaking on the changing Indian traveller, Mr Bader Ali Habib, Head of Region - South Asia, Dubai Department of Economy and Tourism shared “In the post-pandemic revival phase, Indian travellers have made a notable resurgence, demonstrating a strong enthusiasm for international destinations and bespoke travel experiences. A big chunk of the middle-class population in India with increasing disposable income, have shown a particular affinity for luxury experiences, contributing to a mutually beneficial relationship that enriches global economies, including Dubai's.”
The luxury tourism sector in India has witnessed explosive growth, surpassing the $35 billion mark in 2023, up from $28 billion in 2022. This remarkable surge indicates the growing interest among travellers seeking exclusive and culturally enriching experiences. In recent years, international tourism boards have increasingly turned their attention to the Indian market as a promising avenue to boost tourism. The reasons for this strategic shift are multi-faceted and underscore the immense potential that India's growing middle class and their evolving travel preferences offer to the global tourism industry.
Tourism boards across the world have increasingly invested in the luxury tourism sector in India due to several compelling reasons shared by Mr Bader Ali Habib. While this isn’t the case only in Asia, in the West, India currently ranks at number 4 among Washington DC’s overseas markets. “India is one of DC’s top international markets which has been steadily growing over the past few years. An increased awareness of the destination, supported by increased marketing funds via the recently passed Tourism Recovery District in Washington, DC, gives an impetus to this growth,” said the DDC spokesperson. Mr Habib further said, “The luxury segment offers a higher return on investment, as it typically involves higher-spending tourists who contribute significantly to the economy. These tourists are more likely to stay longer, dine at upscale restaurants, and engage in premium experiences, thereby boosting revenue and the overall positioning of the destination. Additionally, the luxury sector often sets the standard for sustainable and responsible tourism practices. This aligns with the objectives of many tourism boards to promote eco-conscious and community-focused tourism.”
In agreement with the statement, the DDC spokesperson also expressed that travellers are looking for specific experiences that go beyond just staying at high-end properties, “On top of the general demand for Michelin dining options, there is a new interest in experiential offerings like Jônt DC’s Chef Tasting Counter, sushi making at Cure Bar & Bistro, and open-fire Spanish cooking at new restaurants, Casa Teresa. Tourists also look for individually curated and personalised tours of museums and galleries.”
The Rise of Outbound Travel In India
Indians are emerging as big globetrotters and outbound travel is seen crossing pre-Covid levels. As many as 22 per cent more Indian nation travelled overseas in July 2023, the number stood at 22,32,313 as compared to 18,30,798 in July 2022. Thus one can say outbound travel from India is on an exponential rise. India emerged as the largest source market for outbound travellers in Asia in 2022, registering a 190 per cent rise as per a recent report by IPK International.
As per the Nangia Andersen report titled ‘Unlock the Potential: A Look into Outbound Tourism,’ in collaboration with FICCI, this rapid growth in outbound tourism is driven by rising incomes and a growing middle class and increased spending on transportation, accommodation, dining, shopping, and leisure activities. The report also noticed the recent trend of people preferring experiential travel on the rise with a focus on unique and immersive experiences.
Today's luxury travellers in India are more diverse, discerning, and experiential in their preferences. They seek exclusivity and authenticity, valuing personalised, immersive experiences that go beyond the conventional notions of luxury. “Travellers often yearn for unique adventures. The luxury experiential market has witnessed significant evolution and innovation, thus becoming increasingly vital. Discerning luxury travellers now seek extraordinary, once-in-a-lifetime opportunities, such as staying in boutique hotels with a rich historical or cultural context, embarking on wildlife safaris in pristine natural reserves, or indulging in culinary journeys that explore regional flavours,” told Mr Bader Ali Habib. India's economic landscape has witnessed significant growth, leading to the emergence of a substantial middle-class population. This expanding segment is characterized by increased disposable income, enabling them to consider international travel as a viable option. The global tourism industry sees this as a lucrative opportunity to tap into a market with substantial purchasing power. “There has been a significant increase in luxury spending in India, considering an increase in purchase parity. Due to rising disposable income, greater awareness of luxury brands, and steady economic progress in the nation, a sizable portion of young Indians have transformed into aspirational consumers of luxury,” quoted Mr Bader Ali Habib.
Similarly, the High Net Income population in the country has continuously seen a rise and thus, Indians are looking towards vacations, education and even real estate investment overseas making the Indian market a lucrative one of international tourism boards. “Tier one cities like Mumbai, Delhi, Bengaluru, Chennai, Hyderabad, and Kolkata, always had a fair share of awareness. Our pan-India outreach has yielded remarkable results, with a 23% increase in overnight visitor numbers compared to 2019 surpassing one million visitors in the first five months of the year. Traditionally, Dubai has drawn corporate travellers, families or mass tourism, with shopping being a popular activity. A new focus on HNI travellers interested in luxury travel and big fat Indian weddings have emerged following the outbreak of the pandemic, ” accurately says Mr Bader Ali Habib. Sharing an interesting insight, DDC spokesperson pointed out that in addition to the metro cities like Mumbai, Delhi, Bangalore, Hyderabad, and Chennai which contribute significantly to tourism to DC, have also seen growth and the importance of tier 2 cities which are pockets of wealth – with not just leisure travellers from here, but also student travellers.
With rising income levels, more Indian households have the financial capacity to explore international destinations. The Indian middle class is keen on experiencing new cultures, cuisines, and adventures abroad. This demographic shift is a goldmine for tourism boards worldwide, as Indian tourists tend to be generous spenders on overseas trips.
In addition, India boasts a youthful demographic profile with a significant percentage of the population below 35. This younger generation is more inclined to explore the world and seeks enriching travel experiences. They are tech-savvy and often look to social media for travel inspiration, making them a prime target for global tourism campaigns.
India’s role in boosting international tourism
International tourism boards are focusing on Indian consumers due to the country's growing middle class, rising disposable income, evolving travel preferences, and the promise of a youthful, adventurous, and culturally attuned traveller base. “The general Indian outbound traveller is showing signs of more disposable income than ever before and the resultant growth in luxury experiences. As India continues to be a key player in the global travel market, international destinations are seizing the opportunity to diversify and expand their visitor base while offering unforgettable experiences to Indian travellers. “India is the number one source market for Dubai. We see this trend is here to stay as there is no dearth of synergies between the two countries. The emirate's commitment to providing a safe and welcoming environment has also been a crucial factor in attracting Indians across Tier 1 as well as Tier 2 cities. As a result, Indian travellers have significantly contributed to Dubai's tourism revenue over the years,” Mr Bader Ali Habib told Burda Luxury.
Indian travellers are well-connected digitally, and tourism boards have recognized the power of social media, travel blogs, and influencers in shaping travel choices. Many destinations are leveraging these platforms to create appealing content that resonates with Indian consumers. Indian travellers are increasingly seeking diverse experiences. While traditional destinations like Europe and the United States remain popular, there is a growing interest in lesser-explored regions such as South America, Africa, and Southeast Asia. This shift aligns with the aspirations of many international tourism boards to diversify their visitor demographics. In addition, governments of various countries have been working on simplifying visa procedures and promoting tourism-friendly policies to attract Indian tourists. Bilateral agreements and diplomatic efforts have made it easier for Indians to travel to certain destinations.
Indian travellers have a deep appreciation for culture and cuisine. They seek destinations that offer rich cultural experiences, historical sites, and culinary diversity. Countries promoting their unique cultural heritage and food traditions find a receptive audience in the Indian market. International tourism boards are increasingly tailoring their promotional efforts to cater to the diverse interests of Indian travellers. This includes promoting adventure tourism, wellness and spa retreats, shopping festivals, and family-friendly experiences.
The focus on Indian consumers by international tourism boards in 2023 is not just a trend; it is a well-thought-out strategy to tap into a burgeoning market with tremendous potential. As for Washington DC, their new advertising campaign: “There’s Only One DC,” positions the destination as wholly unique. “This campaign throws light on Washington DC as a city that not only offers world-class cities in dining, nightlife, arts, culture, sports, theatre, outdoor activities, and green spaces. But also monuments, museums, memorials, and free things to do, that no country offers,” shared Mr. Elliott L. Ferguson, II, President and CEO of Destination DC.
Hence, by understanding the changing dynamics and preferences of Indian travellers, international destinations are making concerted efforts to entice and welcome a new wave of visitors, ultimately boosting their tourism industry and reaping the economic benefits of this promising market. As a result, Indian travellers can look forward to a broader range of exciting, culturally rich, and accessible international travel experiences in the coming years.
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