The Great Indian Traveller: Trends shaping the way India travels

2024 was a remarkable year, providing a peep into what the travel sector holds in the coming times.

In brief

• The Indian tourism sector witnessed a boom in 2024, a trend which will likely continue in the near future.
• Last year, we witnessed many developments which are redefining the travel sector in India—emergence of new markets, growth of both domestic and international travel, the growing impact of technology and changing traveler preferences.
• These trends indicate a wide variety of implications for different stakeholders in the sector.

This article has been co-authored by Divya Harwani, Manager, Consulting, EY India.

With a significant surge in Indian travel trends, the travel industry growth is experiencing an unprecedented boom. A new breed of Indian travelers has emerged, driven by a momentum from India’s Tier II and III cities. Empowered by technology, disposable income and a desire to explore, these travelers are fueling a trend that spans local cultural immersion, religious pilgrimages, beach vacations and mountain retreats. Travel industry growth is driven by India's leisure travelers, who are riding the wave of improved connectivity and technological advancements, pushing the boundaries of traditional tourism, eager for domestic tourism and international travel from India.

Emerging Indian travel trends

• 57% of Travel Service Providers (TSPs) report increased bookings since 2022.
• Visa trends indicate a preference for international destinations among Tier I and II city dwellers.
• Travelers from Tier III cities show a stronger inclination towards domestic destinations.
• Young Indians often travel with friends or spouses, while older generations prefer family trips.
• The average length of stay has increased by one day for domestic trips and two days for international trips compared to 2022.

Key insights into Indian travel trends

• Indian traveler spendings continue to grow with greater willingness to invest more in travel experiences.
• 80% of TSPs have noticed increased travel budgets since 2022, with a quarter observing a rise of over 20%.
• International travel budgets have seen the most significant increase, followed by niche travel.
• Domestic travel budgets typically remain below INR50,000 per person, while international travel can exceed INR100,000.
• Spending on international travel from India is approximately four times that of domestic travel.
• While Tier I cities spend more, the difference in spending patterns between Tier I and II cities is minimal.
• Travelers are more willing to spend on premium experiences as they age, with two-thirds of total expenditure going towards airfare and accommodation.
• Luxury travel in India is growing, yet budget hotels are more popular for international travel than domestic travel.
• 69% of travelers prefer using online aggregators for booking, with many bookings made within a month of travel.
• Solo travelers tend to book last minute, while larger groups plan months in advance.
• Older travelers are more likely to book well ahead of time, valuing amenities like breakfast and family-friendly activities.
• Indian travelers' preferences are diverse: beaches, mountains, and religious sites remain popular, but there is growing interest in natural phenomena, cruises, and wildlife.
• Younger travelers are influenced by social media, while older travelers rely on credible media sources for destination choices.
• Airline connectivity and visa ease are crucial factors for destination selection, with offers being a significant draw for those over 60.

Generational travel trends

Two distinct generations of travelers are shaping the industry: Gen ACE and Gen LUX. Gen ACE, under 40, are adventurous, celebratory, and exploratory, often traveling with peers and influenced by social media. Gen LUX, over 40, seek luxury, uniqueness, and experience, traveling with family and influenced by offers and vacation schedules.

Growth and future prospects of Indian tourism

The direct contribution of tourism to India's GDP in 2023 was a staggering US$231 billion, with India ranking second in Asia-Pacific for tourism GDP contribution. India's position on the World Economic Forum's Travel and Tourism Development Index 2024 has risen to 39th from 54th in 2021. By 2027, India is expected to become the fifth largest outbound market, up from tenth in 2019.

The growth outlook is promising for Indian tourism, with the industry projected to grow at 12% to 15% annually over the next five years. This growth is underpinned by an expanding middle-income population, GDP growth, a robust stock market and political stability. The National Digital Tourism Mission (NDTM) is set to further revolutionize the industry, particularly in niche sectors.

Tourism boards play a critical role in sustaining this growth. Foreign boards should tailor experiences to Indian travelers, while state boards should focus on holistic packages and improved tourism infrastructure in India. Collaborations with travel agents and fair local transport practices are also key to the industry's continued success.

Looking ahead, the Indian traveler's appetite for new experiences is expanding into sports, entertainment, cruises, wellness and adventure tourism and redefining ways as to how Indian tourists choose their travel destinations. Travel is no longer a luxury but a means to well-being and unique experiences. The sector is uniquely Indian in its preference for deals and discounts, widening the gap between local operators and online aggregators. In conclusion, the Indian travel sector has a positive outlook in the coming months and will continue to see many unique trends and preferences that cater to both domestic tourism and international travel from India.