India’s Travel Boom

India’s travel market is experiencing an unprecedented boom, with outbound travel seeing a significant spike. According to a report by Mastercard’s Economics Institute titled “Travel Trends 2024: Breaking Boundaries,” Indian outbound travel to Vietnam has soared by an astounding 248% compared to 2019 levels. The United States and Japan follow with growth rates of 59% and 53%, respectively. These figures, collected for the January-March 2024 period, highlight a significant shift in traveler preferences and hold great promise for the travel sector. The report also notes that nearly 20 million more Indians are expected to enter the middle class over the next five years, further boosting travel demand.

India’s Fastest Growing Market

“We’re witnessing more international trips from Indian travelers than ever before,” said David Mann, Chief Economist for Asia Pacific at Mastercard. “India is the fastest growing major market globally, and this growth story is set to continue. With increasing disposable incomes and an aspirational lifestyle, the demand for travel, jewelry, and high-end clothing will remain robust.”

In the first quarter of 2024, Indian airports recorded a record 97 million passthroughs for both domestic and international air traffic. This marks a significant increase from a decade ago when such numbers would have taken an entire year to achieve. Additionally, Indian travelers extended their trips by an additional day in the year ending March 2024 compared to the same period in 2019. This trend underscores a growing appetite for immersive and meaningful travel experiences. Cruise vacations have also seen remarkable growth, surpassing the highs of 2019.

The Impact of a Strong Dollar

Despite the strengthening US dollar, the outbound Indian travel segment has flourished. An expanding affluent consumer base is seeking luxury experiences, reflecting the nation’s growing disposable incomes and aspirational lifestyles. Analysis of Indian passenger arrivals data for popular destinations such as the US, Japan, and Vietnam reveals that while a strong dollar may have deterred tourists from the US, Indian passenger arrivals have surged by 59% compared to 2019 levels. Japan saw a record 50,000 Indian visitors in 2024.

“Interestingly, while the US has yet to fully recover to 2019 levels in aggregate inbound travel, arrivals from India have increased by over 50% compared to 2019,” Mann added. “Vietnam, with its recently added direct flights, has seen a two and a half times increase in travel, reinforcing the demand for intra-regional travel.”

India Gains as China Lags

India’s outbound travel story is compelling, with data from Mastercard’s platform and third-party surveys showing rapid gains in various markets. “Since the end of pandemic restrictions, there’s been less recovery from the Chinese mainland due to visa restrictions, and we’ve seen rapid growth in travelers from India,” said Mann.

Globally, leisure travelers in 2024 are enjoying longer trips, averaging five days, up from about four days a decade ago, particularly in countries where currencies have weakened against the US dollar. These extended stays have significant economic implications, increasing spending per trip and boosting local economies in the travel industry. For instance, in Thailand, where tourism dependence is high, additional days make a substantial difference to the economy.

Conclusion

The surge in India’s outbound travel market is a testament to the country’s growing middle class and their increasing disposable incomes. With Vietnam leading the way as a favored destination, the travel industry is set for continued growth and transformation. As more Indians seek immersive and meaningful travel experiences, the economic impact on popular destinations will be profound, driving further growth in the global travel industry.