India is one of the largest and fastest growing outbound travel markets in the world. The country has a population of nearly 1.4 billion, with nearly 34% living in urban areas. It is a primarily young population, with a median age of 26 years. In recent years, a strong economy has fuelled the growth of the Indian outbound travel market. India was declared world’s 5th largest economy with a GDP of $2.94 trillion (IMF Feb’2020). By purchasing power, India's GDP is $10.51 trillion, exceeding that of Japan and Germany. By 2030, the economies of India's top 5 cities will be comparable to middle-income countries. 2019 saw an increased number of international departures at 26.9 million compared to 16.6 million in 2013. Indian tourists are amongst the highest spenders abroad. With a rapidly growing younger and more educated population combined with a burgeoning middle class, provide strong indications that the country will show a resurgence in travel once the vaccination roll-out achieves a critical threshold in 2021.
Tech Driven India
Digital innovation is transforming the way we live, work and run business, impacting all sectors, industries and segments of society. Internet access as an enabler has fundamentally changed the way consumer aspirations and service needs are addressed. Digital infrastructure has made significant inroads into cities, Tier-II & Tier III towns and villages at a rate much faster than its physical counterpart, empowering the end-user. Technology has played a vital role in shaping the travel industry. The increase in internet penetration coupled with the availability of smart phones, at 870 million, has also driven the expansion of the travel sector over the recent years. New technologies and automations have streamlined business processes across the value chain, thereby encompassing transactions and access to the last mile!
Indian Travel Industry
The travel trade in India is highly fragmented. A large number of players in the unorganised sector handle a dominating share of outbound travel business, with the organised sector representing a small segment of the overall outbound travel. Despite a rising trend in online bookings, retail agencies still handle a majority of outbound travel. According to a Centre for Aviation (CAPA) and Expedia joint study, OTAs presence in the international segment is small but rising, with Indian travellers preferring to use OTAs for international flights and hotel bookings. In the coming years, wider broadband and smartphone coverage and increasing familiarity with digital channels will increase bookings through OTAs, with residents of smaller towns playing an important part in this growth. Over the next few years, traditional and online distribution systems will continue to co-exist, aligned to service needs, as the Indian outbound market matures.