Despite the aspirations of many of India's 1.3 billon people to see the world and the economic ability of many Indian households to do so, says the report, which reveals more than 90% of Indians who could afford to travel internationally still holiday at home.
While good news for Indian domestic travel, 'The inflection point for Indian outbound travel' proposes it's a missed multi-billion dollar opportunity for airlines and travel/tourism industry.
CAPA - Centre for Aviation director, South Asia Binit Somaia, said: "According to our analysis of existing data, and new CAPA research, the limited scale of international holiday travel from India is not based on lack of desire to travel (in particular India's growing 'Millennial' and 'baby boomer' populations in particular aspire to travel internationally for holidays) nor, for many, their economic ability to travel abroad. Exploring and removing the barriers to international travel would allow global destinations, and travel industry suppliers, access to an untapped multi-billion dollar opportunity".
CAPA projects that - by 2025 - there will be 13.9 million international leisure departures by Indian travellers, generating 19.4 million international visitor arrivals around the world. While already a significant number, the Expedia/CAPA report proposes that this represents only the tip of the iceberg.
The report proposes international leisure travel from India is under-represented compared to India's population who could afford to do so, and relative to the international travel propensity of other nations.
According to CAPA's analysis:
- Of the 21.9million international trips taken by Indian nationals during 2016 (India Ministry of Tourism data), only 30% - comprising around 4.8 million outbound departures by 4 million travellers - were for 'pure' leisure travel, i.e., 'for the explicit purpose of an international holiday'.
- Around 0.3% of Indians travel internationally for holidays annually currently, representing only a very small part of the estimated 100 million or so people in Indian households today which, based on household income, could potentially afford to do so.
- While small in relative number, when Indians do travel abroad, they are relatively big spenders. It's estimated Indians contribute 16.4 USD Bn annually to international tourism expenditure, and in CAPA's view, this could grow to 35-40 USD Bn by 2027.
CAPA believes a key to stimulating outbound leisure travel demand from India in the near term sits with the long-haul, low-cost model, which could make the most popular and aspirational destinations for Indian outbound travellers more affordable and more accessible.
CAPA predicts that by 2025, Indian Low Cost Carriers (LCCs) will operate close to 40 wide-bodied aircraft, which could deliver an additional 2 million annual outbound leisure travellers to global destinations.
CAPA believes long-haul LCCs based in India -a phenomenon it expects will emerge imminently- could transform the affordability of international travel to more distant points by enhancing value that holidaymakers generate from their travel budget. Re-engined narrow body equipment, such as the A320neo or 737 MAX aircraft, with their longer range and lower unit costs, could enable LCCs to launch non-stop routes from India to numerous holiday destinations-such as Phuket, Siem Reap, Manila, Hong Kong, Ho Chi Minh City, Hanoi, and Seychelles-which are not viable today. Indian carriers currently have close to 800 such re-engined aircraft on order.
India 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.
To find out more, download the detailed report, at: The inflection point for Indian outbound travel.