China’s travel recovery gets more attention, but India’s outbound market is ‘booming’ even faster

Travel

Talk about Asia’s travel recovery is still largely focused on the return of Chinese travelers.

But it’s Indians travelers who are searching for international trips faster than travelers in any other market in the world, Agoda’s CEO, Omri Morgenshtern, told CNBC Travel.

“The entire thing is booming,” he said. “India outbound [travel] is growing much faster than any other.”

Company data showed that while outbound travel searches from most Asia-Pacific countries increased between 30% and 60% from 2019, searches from travelers in India jumped by 225%.

“India’s travel industry has recovered strongly on the back of economic growth in the country,” said Lalitya Dhavala, valuations consultant at travel analytics firm Cirium.

“The data shows a strong recovery of both domestic and international traffic as compared to 2019 with … positive growth in scheduled capacity in the next quarter,” said.

Where are they traveling?

Thailand, Singapore and Indonesia are top picks for Indian travelers.

From January 2019 to mid-May this year, hotel and flight searches by Indian travelers to Indonesia increased by 256%, 215% to Singapore, and 147% to Thailand, Agoda data showed.

But searches to Vietnam — a country long overlooked by Indian travelers — grew even more. Agoda’s data showed a 390% rise from 2019.

“Vietnam is within the top five destinations and it was never there in 2019,” Morgenshtern said.

Before 2019, there were no direct flights from India to Vietnam, so connectivity between the two countries is now better, said Vishal Suri, managing director of SOTC Travel.

“Vietnam is a destination that isn’t very far away from India and still in the ASEAN region. It’s just a four- or five-hour flight out of most parts of the country,” Suri said.

Southeast Asian destinations remain popular among Indian travelers, but Agoda data suggests their interest in East Asian ones has waned, Agoda’s Morgenshtern said.

Hotel and flight searches to Japan and Taiwan have dropped from 2019, according to Agoda’s data. But searches for South Korea have risen since before the pandemic.

“Travel to Southeast Asia is completely exploding, but East Asian countries are much more expensive destinations,” Morgenshtern said.

But Morgenshtern expects travel interest in East Asia to rise soon. He also noted two other expensive markets that are popular among Indians — the United States and the United Kingdom.

“I don’t see why an Indian customer that would go to Europe won’t have a lot of fun going to Japan or Taiwan.”

More spending power

Whether it’s a short getaway in Asia or a long holiday in Europe, Indians are spending money. And they’re spending big.

“There’s this perception that the Indian traveler’s economic power is very low. It may be true domestically, but when it comes to outbound, I actually think it’s on par with the Chinese when they visit other Asian countries,” Agoda’s Morgenshtern said.

Last year, Indian travelers spent about 30% more on accommodations for their international travels than before the pandemic, and 20% more than the average Chinese customer, according to Agoda’s data.

In Thailand, Chinese and Indian travelers spend about the same on hotels, he said.

“Indians like to stay in four- or five-star accommodations, and at branded hotels with names that they are familiar with,” SOTC’s Suri said. “They are also exploring proper restaurants instead of eating at fast food outlets.”

Cirium’s Dhavala pointed out that the increase in international travel is limited to wealthier Indian travelers.

“The rest of the middle-class sector is focused on domestic travel, and low-cost airlines in India are well placed to meet that demand,” she said.

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