CAPA-Expedia India Outbound Travel Research

July 6, 2019by capa-india

Expedia Group, the world’s largest online travel company, in association with CAPA India, the region’s leading aviation advisory, research and knowledge practice developed ‘The inflection point for India outbound travel’ report, to enable global travel and tourism operators to better understand the Indian outbound leisure market. The report throws light on Indian consumers’ leisure travel habits and this year’s findings suggest that there is huge potential in this segment as India contributes to only 4.8 million leisure outbound trips. Key excerpts are provided below, however please click here to request a complimentary copy of full report.

India Travel Market:

  • Indian outbound leisure market is estimated to be 4.8 million trips, representing just 30% of total departures, the leisure share is significantly lower than the global average of 53%
  • In 2016, there were 21.9 million departures by Indian nationals, according to the Indian Ministry of Tourism. This includes travel for all purposes e.g. business, leisure, education, visiting friends & relatives (VFR) and others, by both resident and non-resident travellers. These travellers spent USD16.4 billion in 2016. Business travel accounted for 26% of outbound trips, while visiting friends and relatives, employment, education, pilgrimage and others accounted for the balance 44%
  • By 2025, there will be estimated 13.9 million leisure departures, generating 19.4 million Indian visitor arrivals overseas, a CAGR of 12.2%. Traffic from tier-II Indian cities is expected to contribute significantly to the next phase of growth in outbound travel

Who is travelling?

  • Indian millennials are more adventurous and confident and more inclined towards discretionary consumption of activities such as travel, as opposed to saving. They prefer independent travel over group tours
  • 45% of 18-25-year olds went on their first international trip either with friends or by themselves
  • Indian baby boomers are the fastest growing age group in some destinations such as Canada and New Zealand and prefer group travel

Where do Indians holiday?

  • The largest overall outbound markets from India are Dubai, Saudi Arabia, Bahrain, the US and Thailand. US traffic is primarily for business, with only 18% leisure. Other top 20 markets which have a low leisure share include China (23%) and Australia (24%)
  • Dubai, Thailand, France, Singapore and Malaysia alone account for just over 50% of Indian leisure arrivals overseas
  • Making up the top 10 are Sri Lanka, Hong Kong, Indonesia (primarily Bali), the US and Switzerland
  • Outbound leisure travel from India is highly concentrated in a handful of popular destinations, with the top 10 accounting for 70% of Indian leisure arrivals
  • Amongst the 10 leading leisure destinations, India was the largest source market for Dubai and Sri Lanka, and 4th for Singapore
  • The majority of the top 10 leisure destinations are within 5-6 hours flight of India. France was the leading long-haul leisure destination, followed by the US and Switzerland

Where would Indians like to go?

  • Travel agents report notable growing interest, albeit off a low base, in South America (primarily Brazil, Argentina and Peru); Eastern Europe and the Balkans (Czech Republic, Slovenia, Croatia and Greece); Northern Europe (Iceland and Norway); Asia Pacific (Bhutan, Cambodia, Maldives and the Philippines), as well as Israel, Jordan and Morocco
  • The United States emerges as the leading aspirational destination across metro and non-metro travellers, as well as those that have never travelled. Australia and New Zealand ranked second and third respectively in metro locations. Switzerland ranked higher amongst those that have never travelled

How much do they spend?

  • For an average short haul outbound leisure holiday, Indians spend about USD857 per trip per person, while for an average long-haul leisure holiday Indians spend roughly USD1,687 per trip per person
  • Accommodation generally accounts for about 35% to 50% of total vacation spend. 50% of respondents budgeted USD75-150 per room per night for leisure travel, with 35% spending less than USD75.

Impact of LCCs on affordability of travel

  • India has seen strong growth in both domestic and international passenger traffic over the last five years (FY2012-2017), which have grown at a CAGR of 14.0% and 8.6%, respectively. LCCs have had a dramatic impact on air travel by making it more affordable and now command 67.2% of the Indian domestic market.
  • International traffic carried by LCCs grew at a CAGR of 17.2% over the period FY2012–2017, much faster than the overall growth of the market. As a result, LCCs increased their international market share from 14.5% in FY2012 to 22.9% in FY2017, with relatively faster expansion in tier-II cities such as Amritsar, Lucknow and Jaipur, among others.

Impact of technology on access to travel

  • Online travel agents have grown to become a major force in the distribution of domestic travel. Their presence in the international segment is smaller, but rising, with OTAs estimated to account for around 14% of international flight bookings
  • Research indicated that Indian travellers prefer to use OTAs than airline/hotel websites. ‘Ease of booking’, ‘ability to compare prices’ and ‘better deals’ were the key reasons. Up to 35% of those surveyed stated that they did not require the assistance of an offline agent to book international travel

When do they travel?

  • The peak season for such travel from India has traditionally been from mid-April to June, because of summer school holidays; and again, from October to January, due to the festival period, the New Year break and the wedding season, which drives honeymoon travel. This is particularly so in the case of short haul travel
  • However, for longer haul travel to northern hemisphere destinations, there is a much more distinct single peak season between April and June

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