India’s tourism market has made significant progress post-pandemic, with a growing appetite for diverse experiences, authenticity and well-being. The world should recognize and respond to India’s changing preferences.
Peden Doma Bhutia
A shift towards experiential travel, a growing demand for premium travel options – India’s approach to travel is changing, according to Mukul Sukhani, senior vice president of business development at Mastercard.
According to the most recent data from the Indian central bank — According to the Reserve Bank of India (RBI), spending on credit cards reached a new high of INR 1.5 trillion in July 2023, a year-on-year increase of 25%.
Speaking at the B20 Summit in India recently, Mastercard CEO Michael Miebach explained how the company has invested significantly in India, recognizing the country as a hub for digital innovation.
In his interaction with Skift, Sukhani highlighted the changing travel trends in India.
Here are some key points to remember:
1: Shift in Tourism Source Markets – From China to India
While China is struggling, India has emerged as a dynamic force on the global tourism scene. Rising outbound spending by Indian tourists has significantly bolstered the global tourism industry, especially in the first six months of the year, with May and June witnessing a surge in spending vacation abroad, according to Sukhani.
Notably, the growth rate increased by 30 to 40 percentage points from the previous year, a testament to the resilience of India’s tourism sector even in the face of global challenges. (For more, read Skift’s Megatrend report, India is the new China.)
2: Visa policies: the game changer
While traditional destinations such as the US, UK and Singapore remain popular with Indian travellers, demand for travel to countries with more relaxed visa policies has increased.
Thailand is a notable example, Sukhani said.
“Thailand, once a stable tourist corridor, has regained prominence thanks to its accessible travel policies,” Sukhani said.
Also, the introduction of direct flights from cities like Delhi to Azerbaijan and Georgia has facilitated increased tourist movements to these destinations. Indian citizens simply need to obtain an electronic visa to enter Azerbaijan. More than 60,000 Indian tourists visited Azerbaijan in 2022.
3: Resilience of discretionary spending
Despite inflation and potential downside risks, discretionary spending in India has remained strong. Sukhani said leisure travel is seeing an upsurge with people traveling more frequently than before the pandemic, dispelling fears of reduced travel due to economic concerns. Travelers are also showing a willingness to invest in quality travel experiences.
American Express’ Global Travel Trends report also highlighted that 90% of Indian travelers emphasize their travel plans centering on personal well-being, and 87% of them intend to travel. allocating a larger share of their budget this year to luxury experiences rather than traditional luxury goods.
4: The rise of solo travel
A significant trend reshaping India’s tourism landscape is the rise of solo travel, coupled with the emphasis on enriching experiences. The focus on mental health has led to an increase in wellness tourism, ranging from spa vacations to fitness-centric getaways.
“The demand for unique experiences has also driven the popularity of experiential travel, encouraging travel companies to offer experiential packages that prioritize activities over material possessions,” he said.
5: Business travel generates mixed travel
Enthusiasm for leisure travel, he said, is extending to business travelers, who are increasingly combining business travel with leisure experiences, a trend that Skift previously called “The great merger.”
Recently, Marriott’s regional vice president for South Asia underlined the increasing number of customers combining business trips and holidays.
6: Airline partnerships and loyalty programs
As airlines work with financial institutions to take advantage of changing travel trends, Mastercard has also partnered with Indian banks and carriers to launch co-branded credit cards.
After the co-branded card of HDFC and the low-cost airline Indigo on the Mastercard network, the launch of the Vistara card, in collaboration with IDFC FIRST Bank, shows the desire of airlines to offer enriched experiences.
While Sukhani acknowledged that the initiative builds customer loyalty, he also stressed the importance of reaching critical mass for loyalty programs and co-branded cards to succeed. “You need a certain number of customers for the program to make sense,” he said.