India's Growing Middle Class Takes Flight As Outbound Travel Reaches New Heights

India's travel sector is booming in 2024, driven by economic growth and increased outbound travel. Indians are exploring diverse global destinations
India's travel sector is booming this year
India's travel sector is booming this yearShutterstock

As the global travel sector breaks new boundaries in 2024, India's contribution to its growth is gaining prominence. The country's outbound travel has reached new heights, reflecting its growing economic strength and an increased desire for exploration. According to the Mastercard Economics Institute(MEI) Travel Trends 2024 report, in the first three months of this year, 97 million passengers travelled through Indian airports for domestic and international trips. This marks a dramatic shift from a decade ago, highlighting Indians' growing appetite for new experiences.

Economic Growth Fuelling Travel Aspirations

The country's economic growth has increased disposable income for the middle class, resulting in more people taking short and long trips to their dream destinations. Reports show that the Indian middle class grew by 6.3 per cent annually from 1995 to 2021, making up 31 per cent of the population. This group is expected to reach 38 per cent by 2031 and 60 per cent by 2047, likely boosting spending on travel and related experiences.

The MEI report shows that domestic travel in India has increased by 21 per cent compared to 2019, while international travel has grown by 4 per cent. Indians are travelling abroad more than ever, benefiting from competitive airfares, hotel rates, and free visas offered by many countries. From April to September last year, 3.14 crore international passengers travelled to and from India, slightly higher than the 3.13 crore passengers during the same period in 2019.

Better infrastructure and improved air connectivity have significantly contributed to the surge in outbound travel. The rise in direct flights from India to international destinations has made travel more convenient and less time-consuming. Furthermore, the proliferation of online travel agencies and platforms has made booking travel and related experiences easier.  Additionally, using credit cards with compelling travel deals and incentives has made planning foreign trips much easier.

Appetite For Experiences

Indian travellers are now more interested in unique and authentic experiences beyond typical tourist spots. There's a rising preference for adventure tourism, wellness retreats, and culinary tours instead of popular destinations. Millennials are especially driving this trend towards experiential travel. According to the MEI report, spending on nightlife and dining has surged, with fine dining seeing a 55.2 per cent increase and casual dining a 49.2 per cent rise from the previous year. Spiritual tourism has also boomed with a remarkable 97 per cent growth, driven by a growing desire among travellers for personal well-being and self-discovery.

Outbound travellers from India are exploring a wide range of destinations. According to the MEI report, Japan has experienced a 53 per cent increase in visits, reflecting a growing interest in East Asian cultures. Vietnam has seen a significant surge of 248 per cent, highlighting the appeal of Southeast Asian destinations. Despite a stronger US dollar, visits to the United States have also risen by 59 per cent compared to 2019.

In a capital-intensive and multi-sector industry, tourism and travel can be an important economic multiplier, supporting the growth of the economy's primary, secondary, and tertiary sectors. That's why India's outbound travel boom in 2024 can potentially create new economic opportunities for the global travel industry, which is likely to adapt to meet the needs of Indian travellers in the near future. By understanding and responding to these trends, the industry can have different stakeholders come together and deliver enriching and memorable experiences to travel enthusiasts.

Anubhav Gupta is the Senior Vice President of Business Development at Mastercard

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