India’s growing middle class poised to transform travel landscape
India's growing middle class poised to transform travel landscape The Economic Times
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A Growing Middle Class and the Future of Travel in India
Ayn Rand had long been rooting for the bourgeoisie. She famously said, “Upper classes are a nation’s past; the middle class is its future.” That seems to be coming true, if not fully, at least partially. India’s growing middle class is set to be in the pilot’s seat, steering change in the way it travels. Globally, the middle class is already the largest spender. India is expected to become the fourth largest global spender on travel by 2030, and by then the middle class, with increased purchasing power, will make 47% of its population, say reports by Booking.com-McKinsey & Company, and People Research on India’s Consumer Economy-India’s Citizen Environment (PRICE-ICE), respectively. A middle-class Indian household has been defined by the latter as one earning between `5 lakh and `30 lakh annually (based on 2020-21 prices).
India’s Growing Travel Expenditure
India’s total travel expenditure is set to touch $410 billion in 2030, according to “How India Travels”, the report by Booking.com and McKinsey. In 2019, when the tourism industry, worldwide, had its best year, before Covid-19 hit, India’s total travel expenditure was just $150 billion.
The Influence of India’s Youth
India’s youth will be another factor that will make the country irresistible for global tourism players. India’s median age is 28.2 years, more than 10 years younger than that of major economies. According to the UN World Tourism Organization, India is one of the top three fastest growing outbound tourism markets.
Proximity Matters
Flight fare, food, and local experiences are all factors that Indian travellers consider while choosing a destination, but distance pips them all. Seventy per cent of travellers choose nearby destinations, with the Middle East accounting for one-third, says a McKinsey report, “From India to the World: Unleashing the Potential of India’s Tourists”, released in November last year. The UAE has been leading the charts for the last couple of decades.
Says Rajesh Magow, group CEO of MakeMyTrip: “The most popular outbound destinations remain largely unchanged in 2023, with the UAE, Thailand, Singapore, Indonesia, Maldives, Hong Kong, US, Nepal, UK, Canada and Vietnam leading the chart. We don’t expect the top outbound destinations to change dramatically in 2024, though the order of preference may change.”
The UAE’s Appeal to Indian Travellers
Across UAE, Indians represent a significant portion of a very diverse global tourist influx, constituting about 13.6% of visitors between 2021 and 2023,” says Iyad Rasbey, vice-president, Destination Tourism Development, Ras Al Khaimah Tourism Development Authority. India has been one of the top 5 markets for Ras Al Khaimah, one of the seven emirates of UAE, “with over 18% year-on-year growth in visitor numbers recorded in 2023”. While competing with established destinations like Dubai, Abu Dhabi, and Sharjah, it aims to increase the share of Indian visitors to 22% in 2024. “Compared with other emirates, accommodation in Ras Al Khaimah is very competitively priced,” says Rasbey. “Upcoming projects include properties in the midscale segment that cater to budget-conscious travellers.”
Aloke Bajpai, CEO of ixigo, says changes in visa policies, with Malaysia, Thailand, Sri Lanka, and Kenya waiving visa requirements for Indians, fueled international travel growth towards the end of 2023. While Iran and Vietnam have joined the list of countries offering visa-free entry to Indians, Indonesia is considering the same.
In 2022, India boasted the highest number of global travellers from Asia, pipping China (which was the world’s biggest outbound tourism market before Covid-19), South Korea, and Japan. Visa applications to India saw a remarkable 140% rise in 2022 over 2021, ET quoted Prabuddha Sen, chief operating officer–South Asia,VFS Global, in December 2023.
“Direct flights, hassle-free visa, economical fares, a range of accommodation options and a broad canvas of experiences—any destination that is able to get this mix right will be able to attract travellers from India,” says Magow.
About 40% of Indian travellers used the screen—films, TV, and OTT—as travel inspiration, Skyscanner noted a 23% month-on-month rise in Paris searches after the release of Emily in Paris, season 3, in December 2022.
Indians prefer US and Western Europe when it comes to longhaul travel. In 2022, India was third among overseas travellers visiting the US. According to media reports, non-immigrant visas to the US saw a 44% jump in 2023 over 2019. Air India launched non-stop service from Mumbai to New York and San Francisco, and from Bengaluru to San Francisco, in 2023. If rumours are true, Dallas Fort Worth, Los Angeles, and Seattle could join in 2024.
A Brand USA market survey predicts Indian arrivals to reach 1.8 million in 2024 and 2.3 million in 2030, from 1.5 million in 2019, with Indians most interested in visiting California (47%), followed by Florida (39%) and New York (37%).
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SDGs, Targets, and Indicators Analysis
1. Which SDGs are addressed or connected to the issues highlighted in the article?
- SDG 8: Decent Work and Economic Growth
- SDG 9: Industry, Innovation, and Infrastructure
- SDG 10: Reduced Inequalities
- SDG 12: Responsible Consumption and Production
- SDG 17: Partnerships for the Goals
The article discusses the growing middle class in India and its impact on the travel industry. This connects to SDG 8, which focuses on promoting sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all. It also relates to SDG 9, which aims to build resilient infrastructure, promote inclusive and sustainable industrialization, and foster innovation. Additionally, the article mentions the income range of a middle-class Indian household, highlighting the issue of income inequality and connecting to SDG 10. The article also touches on responsible consumption and production in the travel industry, aligning with SDG 12. Lastly, the article mentions partnerships between countries and airlines, which relates to SDG 17.
2. What specific targets under those SDGs can be identified based on the article’s content?
- SDG 8.9: By 2030, devise and implement policies to promote sustainable tourism that creates jobs and promotes local culture and products.
- SDG 9.1: Develop quality, reliable, sustainable, and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human well-being.
- SDG 10.1: By 2030, progressively achieve and sustain income growth of the bottom 40% of the population at a rate higher than the national average.
- SDG 12.8: By 2030, ensure that people everywhere have the relevant information and awareness for sustainable development and lifestyles in harmony with nature.
- SDG 17.17: Encourage and promote effective public, public-private, and civil society partnerships, building on the experience and resourcing strategies of partnerships.
Based on the article’s content, the targets identified are related to promoting sustainable tourism (SDG 8.9), developing sustainable infrastructure (SDG 9.1), reducing income inequality (SDG 10.1), promoting sustainable consumption (SDG 12.8), and fostering partnerships (SDG 17.17).
3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?
- Number of jobs created in the tourism industry
- Investment in infrastructure development
- Growth rate of income for the bottom 40% of the population
- Awareness and adoption of sustainable travel practices
- Number of partnerships established between countries and airlines
The article mentions indicators such as job creation in the tourism industry, investment in infrastructure development, income growth for the bottom 40% of the population, awareness of sustainable travel practices, and the establishment of partnerships between countries and airlines. These indicators can be used to measure progress towards the identified targets.
4. Table: SDGs, Targets, and Indicators
| SDGs | Targets | Indicators |
|---|---|---|
| SDG 8: Decent Work and Economic Growth | 8.9: By 2030, devise and implement policies to promote sustainable tourism that creates jobs and promotes local culture and products. | Number of jobs created in the tourism industry |
| SDG 9: Industry, Innovation, and Infrastructure | 9.1: Develop quality, reliable, sustainable, and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human well-being. | Investment in infrastructure development |
| SDG 10: Reduced Inequalities | 10.1: By 2030, progressively achieve and sustain income growth of the bottom 40% of the population at a rate higher than the national average. | Growth rate of income for the bottom 40% of the population |
| SDG 12: Responsible Consumption and Production | 12.8: By 2030, ensure that people everywhere have the relevant information and awareness for sustainable development and lifestyles in harmony with nature. | Awareness and adoption of sustainable travel practices |
| SDG 17: Partnerships for the Goals | 17.17: Encourage and promote effective public, public-private, and civil society partnerships, building on the experience and resourcing strategies of partnerships. | Number of partnerships established between countries and airlines |
Behold! This splendid article springs forth from the wellspring of knowledge, shaped by a wondrous proprietary AI technology that delved into a vast ocean of data, illuminating the path towards the Sustainable Development Goals. Remember that all rights are reserved by SDG Investors LLC, empowering us to champion progress together.
Source: m.economictimes.com
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