Thailand, Malaysia vie for Indian tourists as Europe struggles to compete

In the vibrant streets of Bangkok, where Bollywood tunes mingle with the aroma of curry and kebabs, an unexpected shift in global travel trends is unfolding.

On a Friday evening, the Indian Express restaurant in Bangkok is alive with the vibrant energy of diners savoring kebabs and curries, accompanied by a lively soundtrack of Bollywood hits and a steady stream of Kingfisher lager, Caliber.Az reports, citing foreign media.

Nearby, at Radha Krishna, a vegetarian spot, a slightly quieter but equally enthusiastic crowd enjoys traditional fare. This lively scene could easily be mistaken for any bustling city in India, yet it's unfolding in the heart of Bangkok.

India's economic ascent has not only pulled millions out of poverty but also enhanced its geopolitical influence. However, a less obvious impact of this growth is its effect on global consumer markets. The number of international trips by Indians more than doubled over the past decade, reaching 27 million by 2019. Indian travelers' overseas spending has surged threefold from 2010 to 2023, hitting $33 billion, with projections suggesting a rise to $45 billion next year. This surge is fueled by a combination of demographic shifts and economic growth: individuals aged 25 to 34 are particularly eager travelers, and a fifth of the population is set to enter this age bracket soon. Moreover, the Indian middle class is expected to double by 2047, and the number of valid Indian passports has climbed from 52 million a decade ago to 93 million this year.

By 2040, international departures from India could soar to between 80 million and 90 million, according to McKinsey. This would bring it close to the 104 million Chinese travelers who went abroad in 2019. However, while the growth in Chinese outbound tourism has slowed as domestic travel gains traction, Indians remain eager to explore the world. Unlike their Chinese counterparts, who predominantly flocked to Europe at a similar stage, Indian travelers are gravitating towards destinations closer to home.

In response to China's rise as a major tourist source, Western countries adapted by easing visa processes, installing Mandarin signage, and accommodating Chinese payment methods. In contrast, they have been slower to target Indian tourists. Meanwhile, countries in the Middle East and Southeast Asia are actively pursuing Indian travelers. Thailand and Malaysia have eliminated visa requirements for Indians, while other nations are enlisting Bollywood celebrities to attract tourists. Abu Dhabi tourism has enlisted Ranveer Singh, known for his previous promotional work for Switzerland, while Dubai has engaged Saif Ali Khan and his daughter Sara Ali Khan. Nations that embrace Indian tourists stand to gain economically and enhance their cultural influence.

For insights on attracting Indian travelers, look to Southeast Asian countries that were quick to recognize India’s growing potential and are now intensifying their efforts to offset China’s declining tourist numbers. In 2019, Chinese tourists comprised 11 million of Thailand’s 40 million visitors. By last year, that number had plummeted to just 3.5 million out of 28 million. Conversely, the number of Indian visitors continues to rise steadily. What used to be about 1 million annually a decade ago was already reached in the first half of 2024. Many of these travelers are making their first journey abroad. Margaux Constantin from McKinsey suggests that Bangkok might soon surpass Dubai as the top leisure destination for Indians. According to Thailand’s tourism ministry, Indian tourists contributed 63 billion baht ($1.8 billion) in 2023, which amounts to around 0.4 per cent of Thailand's GDP.

Thailand's appeal to Indian travelers lies in its affordability, accessibility, and welcoming atmosphere. This is especially significant given the limited international access provided by an Indian passport, which offers visa-free or equivalent entry to only 58 countries, mostly small islands in the Pacific and Caribbean. Thailand’s decision to remove all visa requirements for Indians—a privilege typically reserved for affluent Western nations—immediately boosted visitor numbers. Iran, Kenya, and Sri Lanka have also eliminated visa requirements, while Azerbaijan's e-visa program, introduced in 2017, led to a tripling of annual arrivals within a year and a further doubling the following year, reaching 160,000.

In contrast, many wealthy Western countries create obstacles for Indian travelers. Long waiting times for US tourist visa interviews, exorbitant visa fees in Britain, and the cumbersome application process for the Schengen zone contribute to a frustrating experience. Many find the process so daunting that they opt for destinations where the visa process is simpler. A Bangalore-based professional, frustrated by the visa process, prefers Southeast Asia. Last year, 19 per cent of Indian applications for a British visit visa were denied, along with 15 per cent of Schengen applications. “By design or otherwise, they’re losing out,” says Rajesh Magow, CEO of MakeMyTrip, India’s largest online travel agency.

Additionally, Indians are known for their last-minute travel habits. While Britons typically book international trips three months in advance and Americans two months, Indians generally make their reservations only about 30 days ahead. This short notice often complicates the process of obtaining visas for Europe or North America. Although Indians still travel to the US and the UK in significant numbers, primarily to visit the large Indian diaspora, visa issues make these destinations less attractive for leisure travel. In Europe, the situation is even more pronounced; France is the only Schengen country among the top ten destinations for Indian travelers, coming in at seventh place. Germany and Italy rank lower than Kuwait and Qatar, reflecting a shift in Indian travel preferences.

Ease of access is a crucial factor for Indian travelers, and the availability of direct flights plays a significant role. The number of Indian cities offering international flights has grown substantially, with 31 cities now connected to 322 destinations, up from 23 cities and 272 destinations in 2015. “Foreign airports are knocking at our doors pretty much every other day,” notes Pieter Elbers, CEO of IndiGo, India’s largest airline.

These numbers are expected to increase further. WizzAir, a European budget airline, is considering launching direct flights to India, and AirAsia has added its 17th Indian destination. VietJet, a Vietnamese low-cost carrier, has expanded its routes from major Indian cities to smaller ones. “Vietnam’s fortunes changed because it got connectivity,” says Neil Patil of Veena World, a tour operator. Two years ago, direct flights to Vietnam were scarce; now, there are over 200 per month, and arrivals from India have surged nearly ten-fold to 30,000 monthly.

The impact of Indian airlines launching direct routes is significant, notes Binit Somaia of CAPA India, an aviation consultancy. These airlines, with their extensive sales networks and substantial domestic marketing budgets, can drive major increases in tourist arrivals. For instance, after IndiGo initiated daily nonstop flights to Istanbul in 2019, Indian tourist numbers to Türkiye surged by 50 per cent. The airline has recently expanded its routes to Central Asia and the Caucasus, leading to a swift influx of Indian tourists to cities in Uzbekistan. Similarly, Akasa Air, which was exclusively domestic until recently, now operates flights to five international destinations. With major Indian carriers like IndiGo and Air India ordering dozens of new wide-body aircraft, and a total of around 1,500 planes on order, the international connectivity of Indian airlines is set to grow even further. Next year, Mumbai and Delhi will each gain a second international airport to accommodate this expansion.

Cost is another crucial factor. The budget-conscious nature of Indian travelers has prompted travel firms to offer competitive pricing. Agencies like MakeMyTrip provide numerous discounts and promotions, and many collaborate with banks to offer credit options. According to a 2023 survey, about one-fifth of urban Indians who took out personal loans did so for leisure travel. Additionally, as living costs rise in India, destinations abroad appear increasingly affordable, with Thailand often offering better value than Goa during peak seasons.

The number of affluent travelers is also growing. Approximately 60 million individuals have household incomes exceeding $10,000, with Goldman Sachs projecting that this number will rise to 100 million by 2027. CAPA India is even more optimistic, forecasting that over half of Indian households will have incomes above $10,000 by 2030.

In response to these trends, countries beyond Europe are actively courting Indian tourists. Russia, facing a decline in Western visitors, is focusing on India as a key market and is reportedly negotiating bilateral visa-free access. Other countries like Kenya and Australia are also targeting Indian tourists, while Saudi Arabia aims to attract 7.5 million Indian visitors by 2030, up from 1.5 million last year.

To win over Indian tourists, destinations are tailoring their cultural pitches. Middle Eastern countries emphasize shopping and adventure activities, while Thailand is shifting its image from a destination known for drinking and sex tourism to one that appeals to solo women and high-spending wedding groups. Beyond celebrity endorsements, countries are competing to host Indian film productions, recognizing the significant influence of Bollywood. Switzerland continues to benefit from its association with Bollywood films shot in the 1990s, and Singapore’s tourism board is actively encouraging Indian filmmakers to choose the city-state as a location.

A paneer of respectability

A final consideration for Indian travelers is the availability of Indian food, especially vegetarian options, which is a top concern for many. For instance, Ankesh Kanuga, a 43-year-old pharmacist from Mumbai, recently traveled to Azerbaijan with a group of friends. Despite enjoying skiing, historical sites, and nightlife, Kanuga’s primary complaint was the scarcity of Indian restaurants and vegetarian food. Nevertheless, he expressed a desire to travel abroad again. This sentiment is shared by tens of millions of Indians.

While some residents in affluent countries might be indifferent to fewer Indian visitors, the implications of neglecting this burgeoning market extend beyond mere economics. Tourism plays a crucial role in shaping global culture, influencing which destinations are seen as significant and which are not. It fosters personal connections between countries and helps dispel prejudices. Countries that successfully attract Indian tourists will influence global perceptions and future alliances. Currently, South-East Asia and the Middle East are capitalizing on this trend, while America and Europe risk missing out on both economic benefits and the opportunity to engage with a growing and diverse market.