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Domestic tourism increased sharply.
According to CNN, Indian citizens are currently willing to spend more on travel, and research shows a sharp increase in demand for domestic travel in the country.
The world-famous India Gate in Mumbai was built in the 20th century. Photo: Getty Images
According to Booking.com and McKinsey, Indian tourists made approximately 1.7 billion leisure trips in 2022, but these were limited to domestic travel. Outbound travel accounted for only about 1%.
Regarding overseas travel, approximately 1% of Indian citizens have chosen cities such as Dubai, Bangkok, Singapore, London, Ho Chi Minh City, Paris (France), Ubud, Hanoi (Vietnam), Phuket (Thailand), and Kathmandu (Nepal) as popular destinations in recent times.
A report from October indicated that by 2030, Indian tourists are expected to make around 5 billion trips, with 99% being domestic travel. The world's most populous nation also aims to become the world's fourth-largest tourist destination by 2030, driven by a growing middle-income population and the projected potential increase of an additional $35,000 per year in household income by then.
According to global management consulting firm McKinsey, because of its young population with an average age of 27.6 – "10 years younger than most major economies" – consumption of goods and services, including entertainment and leisure, is projected to double by 2030.
The report also noted that spending on tourism and travel is projected to reach $410 billion – an increase of more than 170% from $150 billion in 2019.
According to the "Tour India 2023" report, approximately 2,000 Indians and 42,000 global travelers aged 18 to 54 booked leisure trips in 2022 and plan to take similar trips this year.
The cities of New Delhi, Bengaluru, Mumbai, and Chennai have maintained their positions as top destinations since the study began in 2015. Meanwhile, Kochi is the only new city on the list.
"India's tourism ecosystem is maturing, and the government has many plans in place to help the country become more connected and ensure its development into a tourism hub," said Kanika Kalra, managing partner at McKinsey Mumbai.
India's smaller cities are gaining immense popularity.
The top 10 most visited cities in India recently are all densely populated destinations, but travel trends may soon change.
Ms. Kalra stated that more and more Indians are wanting to explore smaller cities, including those in Tier 2 or Tier 3 cities, adding that Kochi is currently a popular Tier 2 city among tourists.
According to India Briefing, Tier 2 cities in India are those with a population of 50,000 to 100,000 people, while cities with 20,000 to 50,000 residents are classified as Tier 3 cities.
Besides international cities like the capital New Delhi and Mumbai, cities such as Jodhpur, Dharamshala, Bodhgaya, Bilaspur, Kodagu, and Raipur are also attracting the attention of international hotel chains looking to gain market share in India's booming tourism industry.
Deepak Rao, Director of Revenue Management at Hyatt Hotels in India and Southwest Asia, said that branded hotels are now focusing on second-tier cities to expand due to increasing business opportunities and the growing demand for standard services from tourists.
The French hotel chain Novotel opened its doors to tourists in Jodhpur in May, while the Radisson hotel group announced in June that it would begin welcoming visitors to Raipur in 2025.
The report also shows that about half (52%) of hotels in Tier 2 and Tier 3 cities will be branded by the end of 2023 – up from 27% in 2015.
Ms. Kalra of McKinsey noted that the growing interest in traveling to smaller Indian cities is largely due to the ongoing improvements in transport infrastructure.
In its annual budget report released in February, India's Finance Ministry said it plans to increase capital spending by 33% to 10 trillion rupees ($120.96 billion) as the country prepares to become the second-largest economy by 2075. The report noted that Indian airlines have ordered more than 1,000 new aircraft, bringing the total to between 1,500 and 1,700 by 2030.
"Therefore, we will see a significantly changed landscape and a new wave of tourists flocking to smaller cities and towns," said Kalra.
