Indian travelers spend a lot of money but only 1% of them travel abroad

The travel landscape in India is changing with the country emerging as a powerhouse in the tourism sector.

Their willingness to spend big money while traveling is diminishing, but research shows that most Indians travel domestically, not abroad.

Indian travelers took 1.7 billion leisure trips in 2022, but most never left the country, and only about 1% traveled abroad, according to Booking.com and McKinsey.

Indian travelers are expected to take five billion leisure trips by 2030, 99% of which will be within the country as well, said the report published in October.

The world’s most populous country is set to become the fourth largest country in terms of global travel spending by 2030, largely due to a growing middle-income population that will see household earnings grow by $35,000. Annually by then.

In addition, the population is young, with the average age at 27.6 years, “10 years younger than most major economies,” McKinsey said on its website. Furthermore, consumption of goods and services, including leisure and entertainment, is expected to double by 2030.

The report showed that spending on travel and tourism is expected to reach $410 billion – an increase of more than 170% from $150 billion in 2019.

Here are the 10 best places for Indians traveling within their country, according to Booking.com and McKinsey.

1. New Delhi
2. Bengaluru
3. Mumbai
4. Chennai
5. Pune
6. Hyderabad
7. Gurugram
8. Jaipur
9. Kochi
10. Kolkata

According to the How to Travel India 2023 report, about 2,000 Indians and 42,000 global tourists between the ages of 18 and 54 have booked leisure travel trips in 2022 and plan to do the same this year.

New Delhi, Bengaluru, Mumbai and Chennai have retained the top four spots since the previous study in 2015 – Kochi is the only new city on the list.

“India’s travel ecosystem is maturing and there are several government schemes that are making the country more connected and ensuring it develops into a tourism hub,” Kanika Kalra, managing partner at McKinsey Mumbai, told CNBC.

The ten most visited cities are densely populated destinations, but that may soon change.

More and more Indians are now looking to explore smaller urban areas, including those in tier 2 or tier 3 cities, Kalra said, adding that Kochi is a tier 2 city.

Tier 2 cities in India are those with a population between 50,000 to 100,000 people, while cities with a population between 20,000 to 50,000 are classified as Tier 3 cities, according to India Summarying.

In addition to global cities like New Delhi and Mumbai, cities like Jodhpur, Dharamshala, Bodhgaya, Bilaspur, Kodagu and Raipur are also attracting the attention of international hotel chains keen to gain a market share in India’s booming travel industry.

“Branded hotels are currently focusing on tier 2 cities for expansion due to increasing business opportunities and travelers’ increasing willingness to pay for standard services,” Deepak Rao, director of revenue management for Hyatt Hotels India and Southwest Asia, said in the report. .

French hotel chain Novotel opened its doors to travelers in Jodhpur in May, while Radisson Hotel Group announced in June that it would begin welcoming visitors to Raipur in 2025.

The report showed that around half of hotels (52%) in Tier 2 and Tier 3 cities will be branded hotels by the end of 2023 – compared to 27% in 2015.

McKinsey’s Kalra said the growing interest in traveling to smaller Indian cities is largely attributable to the ongoing transportation infrastructure boost.

In announcing its annual budget in February, India’s finance ministry said it planned to increase capital expenditures by 33% to 10 trillion rupees ($120.96 billion), as the country prepares to become the second-largest economy by 2075.

The report showed that Indian airlines have ordered more than 1,000 new aircraft, which will bring the total number of aircraft to between 1,500 and 1,700 by 2030.

“So we will see that landscape change dramatically and we will see a new wave of travelers to small towns,” Kalra said.

Of the 1% of Indian travelers who travel abroad, here are the top 10 places they visit.

1. Dubai
2. Bangkok
3. Singapore
4. London
5. Paris
6. Ho Chi Minh City
7. Ubud
8. Hanoi
9. Phuket
10. Kathmandu