Indian tourists eyeing Middle East destinations

Published: 19 August 2019 - 7:30 a.m.
By: Louise Birchall
Indians are increasingly taking to foreign shores for their holidays, with spend on travel topping the list of activities for which residents have purchased foreign currency in the second quarter of 2019.

Spending on international travel amounted to about $1.6 billion in Q2 2019, of the total of $4.2bn purchased by Indians during this quarter, according to data collated by Reserve Bank of India, sister title Arabian Business reported.

This is a 60% jump from the $1bn which Indians spent for their holidays abroad in Q2 2018.

Resident Indians are allowed to purchase up to $250,000 in a year for their overseas related expenses such as travel, education, purchase of property, gifts, investments and maintenance of close relatives.

After travel, Indians spent forex most for education. In Q2, of the total $13.8bn purchased by Indians, $4.8bn (35%) was for travel, while $3.6bn (26%) was spent on education.

Dubai and a few more cities in the UAE, besides Europe, the US and the UK, are among the top destinations for Indian tourists, according to tourism industry officials.

“For many Indians, especially the millennials, travelling multiple times a year is a norm now. With the increase in air connectivity, many international destinations – several destinations in UAE and Southeast Asia being among them - are accessible as holiday spots even during a 3-4 day weekend break,” Balu Ramachandran, head of air and distribution, Cleartrip, told Arabian Business.

The United Nations World Tourism Organisation (UNWTO) estimates that India will account for 50 million outbound tourists by 2020.

“Despite the slowdown due to rupee fluctuations, the Indian outbound numbers have been growing at an average annual growth rate of 10-12% over the last seven years. The market for travel and tourism in India is expected to grow at a compound annual growth rate (CAGR) of around 7.23% during 2016-2021,” UNWTO said in a recent report.

“Rising disposable income with middle class families, and the perception among a strata of people in India that their social status gets upgraded on taking a holiday overseas, are among the reasons for the increasing trend of Indians taking to foreign shores in large numbers,” Poonam Sethi, founder and managing director of The Hotel Firm, a Mumbai-based leading corporate and leisure outbound tourism operator, told Arabian Business.

“The attraction of foreign travel cannot be compensated with travelling within the country. Besides, travelling within the country, especially to certain most sought after holiday destinations, can be as expensive as a nearby Gulf or Southeast Asian destination,” Sethi added.

Executives in outbound travel agencies in India said the fact that it is value for money and a better experience to travel outside are the factors which are influencing the decisions of Indians, especially the middle class, to go for overseas holidays.

“The tourism industry in foreign countries is extremely competitive and their strategies are dependent on price comparison with other countries in terms of getting to the destinations, price of stay, sightseeing, etc,” Gaurav Chawla, managing director of Swan Tours, a Delhi-based leading outbound tourism operator, told Arabian Business.

“Indian hotels are often more expensive than equivalent hotels anywhere else in the world. World over, hotels offer dual price policy where domestic rates are cheaper, and this encourages domestic tourism. In India, it is exactly the opposite,” Chawla added.

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