Despite short-term hurdles like a new tax on outbound travel and prolonged visa delays for several popular destinations, outbound travel is set to boom for at least a decade, said most of the travel industry stakeholders attending the 2nd Outbound Travel Summit held in New Delhi.

Barely a year after the resumption of international flights from India in the post-pandemic era, the Indian outbound travel industry finds itself in the midst of an unprecedented boom and one which is likely to continue for well over a decade. This was the unanimous opinion at the 2nd Outbound Travel Summit, organised by Federation of Indian Chambers of Commerce and Industry (FICCI) in New Delhi on Friday.

The value of Indian outbound tourism market is set to reach USD 44.8 billion by 2032, reflecting a growth of almost 300 pc over the USD 15.1 billion it recorded in 2022, says a FICCI-Nangia Andersen Report that was released on the occasion.

Setting the tone for the day, Chairman of FICCI Tourism Committee and Co-Founder of travel company TBO.com and Managing Director of Nijhawan Group, Ankush Nijhawan said that with the expansion in the Indian business, India was set to become the highest MICE (Meetings, Incentives, Conferences and Exhibition) tourism seller in the world by 2026. India also has the potential to become the cruise hub and the number of outbound tourists from India is growing each year, he added.

Poonam Kaura, Partner of consultancy firm Nangia Andersen, which is part of the Andersen Group, presented the key highlights of the report on the Indian outbound travel industry, highlighting that with an increasing disposable income and rising desire for travel, which has spread not just demographically, but also geographically has now seen more Indians take to travelling overseas. “The growth is not just amongst the middle-aged or older people, a large number of the millennials and Gen Z are also travelling overseas. Moreover, the demand is no longer limited to the top metros or larger sub-metros in the country, it is coming from practically everywhere,’’ Kaura said.

The spread of the demand across India for travel overseas was highlighted by several leading tour operators participating in the summit. “There were far more opportunities than challenges in outbound travel from India as the economy is set to grow at a rapid clip, leading to a growth in the middle class with a higher disposable income for the foreseeable future,” said Himanshu Patil, Director, Kesari Tours, a leading travel agent, based in Mumbai and with extensive presence across Western India, notably in Maharashtra and Gujarat.

Patil’s view was backed by Romil Pant, Executive Vice President and Head of Holidays at Thomas Cook India. ‘‘There is so much business and there is so much potential. I believe that even a nationwide company like ours has a tremendous potential to grow. There may be at least 100 cites in the country which have a decent demand for outbound travel and where it would make commercial sense to have an outlet. Yet, we are present only in about 75 of them. So, we can easily add a 30 pc growth just by tapping the existing demand,’’ Pant told the gathering.

One of the segments of outbound travel that has grown the fastest in the post-pandemic era is luxury travel as a large number of High Net Worth Individuals (HNIs) in India have been travelling with a vengeance. “We have groups and families in the HNI segment who are now travelling five or even six times a year, despite the much higher costs involved in air fares or hotels, but there seems to be no stopping them,’’ said Radhika Khanijo, Founder and Managing Director of Welgrow Travels which specialises in the luxury travel segment.

Luxury travellers from India were also seeking out new destinations across the globe as Luis Cabello, Trade and Tourism Counsellor of Peru in India told the gathering. But Cabello urged the tour operators to sell Peru as an individual destination, rather than packaged with five other Latin American countries. “Peru has so much more to offer than just Machu Picchu or Cusco. We have all kinds of experiences that your customers can enjoy and discover at leisure if it is a single-country tour. Currently, when you package three or four nations in a 15-day trip, your customers end up spending at least 6 days at airports or in airplanes. So where is the experience of the destination? Moreover, you will make much more money also by doing Peru as a standalone destination,” Cabello told the gathering.

Visa delays & TCS hurdles, but short-term

The entire gathering at the FICCI meet was unanimous in saying that one of the biggest hurdles limiting the growth of outbound travel currently is prolonged delay in getting visas to some of the most popular destinations, notably Schengen countries,  United States and Canada. “We have had numerous cases of clients being refused visas for no apparent reasons and now it over a year after the market reopened, yet the visa delays have continued,’’ said Guldeep Sahni, co-chairman of FICCI Outbound Tourism Committee and Managing Director Weldon Tours and Travels, who moderated a session on opportunities and challenges in outbound travel.

Another issue that emerged as a concern is the uncertainty over the imposition of tax on outbound travel that the government would impose this year. More than the tax itself, it was the lack of clarity on how it would apply and whether and how customers can offset it in their returns that would hurt the market, said the agents.

“Definitely there would be some impact but I think with the threshold set at INR 700,000 per passport, it would not directly impact a lot of travellers since a large majority of them don’t spend that much on outbound travel. The challenge is more for us as tour operators since we don’t know how to map the expenses and what all can be considered. But I am sure that a solution would be found soon,’’ Nijhawan tells India Outbound.

He added that as Chairman of FICCI Outbound Tourism Committee, he would already be taking up the issue with union government to seek clarity so that the travel trade is not impacted by this new tax.

Patil of Kesari Travels also feels that the impact would be temporary and more for tour operators. “We have not felt any impact on the bookings yet. I am hopeful that some solution and clarity would come before the business is impacted,’’ Patil tells India Outbound.

However, Khanijo, who caters to the luxury travel segment is more worried as most of her clients would end up in the tax bracket. “It will impact our business for sure. But I don’t see any impact on bookings right now since our clients make last minute travel plans. I am hoping that there would be some solution to this issue before it is imposed in October,’’ Khanijo tells India Outbound.