The East is the new West. After years of near-absolute fascination for destinations in Europe and North America, the Indian traveller has now turned to SouthEast Asia, lured by inexpensive seats on fast expanding low-cost carriers and straightforward visa processes.
Singapore, Thailand and Malaysia have emerged as the most popular destinations for Indian tourists, according to recent figures provided by the Pacific Asia Travel Association (Pata), with growth in the region likely to continue unabated as the burgeoning sub-continental middle class take to travel more seriously.
Almost 830,000 Indians travelled to Singapore in 2010, says travel industry research company PhoCusWright, while 791,000 and 691,000 journeyed into Thailand and Malaysia, respectively. In contrast, domestic travellers into the United States, the only non-Asian country in the five most popular destinations for Indian tourists, numbered 651,000.
As for China, just under 500,000 Indian passport holders arrived in 2009, with a projected average annual growth of over 12 per cent in Indian tourists for the next few years.
These numbers also point to the strengthening of intra-Asian travel. It has seen impressive growth in the recent past. Tourism arrivals for countries in Asia and the Pacific region grew by 11 per cent year-on-year in 2010, Pata indicated, with Southeast Asia posting an annualised growth of 12 per cent in international arrivals. The global average during the same period is understood to be around four per cent.
| DREAMLAND Outbound visitors from India to... | |||
| PlaceYear | 2009 | 2010 | 2011 (Projected) |
| Singapore | 726,000 | 829,000 | 883,800 |
| Thailand | 615,000 | 791,000 | 873,247 |
| Malaysia | 590,000 | 691,000 | 784,430 |
| United States | 549,474 | 651,000 | 710,953 |
| China | 448,900 |
-NA- | |
Emerging destinations like Vietnam and the Philippines saw a rise of incoming tourist traffic exceeding 35 per cent and 17 per cent, respectively, as established haunts like Singapore saw inbound growth above 20 per cent last year.
Domestic drivers
The Indian traveller, despite the geographical emancipation, remains focused on value for money, a factor that has fed demand for travel into Southeast Asia.
The expansion of international low-cost carriers (LCCs) such as AirAsia and Tiger Airways nationwide has meant a drastic reduction in ticket prices for international short and mid-haul travel. Add to that the spreading out of Indian airlines, including Kingfisher and Jet, apart from Air India, which has further increased options. IndiGo intends to start international flights later this year.
“There is high connectivity between India and Southeast Asia if one looks at the international carriers, like Singapore Airlines, domestic ones like Jet (Airways) and Kingfisher, and then you have the LCCs (low-cost carriers). There is a lot of supply in the short-haul market now, and airlines have really started moving into tier-II cities,” said PhoCusWright’s Asia Pacific market analyst, Ram Badrinathan.
While the LCC influx has clearly supported growth, the easing of visa regimes for a number of Southeast Asian nations have made the region more attractive. Visa-on-arrival for countries, including Thailand and Indonesia, combined with relatively hassle-free processes for others, has helped change the dynamics.
“The LCC competition has meant that fares are much more affordable, but visa relaxation has been a driver, too. I don’t think we have even scratched the surface yet. Liberalisation of visa regimes will give further impetus to the number of Indian tourists visiting Southeast Asia,” said John Koldowski, deputy CEO and head, office of strategic management, Pata.
Among other factors, robust exchange rates for some countries, reasonably priced hotels, short travel time and the diversity of shopping options have also contributed in convincing more Indian tourists to settle for an Oriental holiday.
Badrinathan says there is another domestic phenomenon that must be taken into account, especially when comparisons are made with China, which has millions of its citizens pouring into Southeast Asia every year.
“The single biggest potential driver for the Indian tourism market is the fact that the Indian travel industry has no barriers. The industry is deregulated, unlike China, where outbound travellers need to go through a particular set of agencies to travel abroad,” explained Badrinathan. “Also, the Indian urban middle class, comprising between 50-70 million individuals, knows English and can access content in English on the internet. In China, (online) content is regulated,” he added.
Predictably, Indian travel portals are doing brisk business. Yatra.com, for instance, claims to generate average revenue of $30 million a month, with a volume of 10,000 tickets and 350 rooms booked per day. Makemytrip, among country’s largest online travel sites, is even looking for acquisitions in the region after making its first purchase, a Singapore-based travel agency picked up for $3 million, founder and CEO Deep Kalra told Business Standard in a recent interview.
These two portals, along with travel agencies SOTC and Thomas Cook, together “account for the bulk of (overseas travel) bookings” made in India, a recent study on the domestic industry reported.
Singapore affair
However, India’s unassailable attraction with Singapore is a standout feature of the sub-continental plunge into Southeast Asia.
Since as far back as 1999, India has been among the 10 major tourism generating markets for Singapore, a trend that has become more pronounced in recent years: Subsequent to 2005, India has consistently placed in the top five visitor-generating countries for the city-state.
Between January and December 2010, India was the fifth highest visitor-generating market for Singapore, reaching 829,000 visitors, a 14 per cent year-on-year increase compared to 2009, according to the Singapore Tourism Board (STB).
In spite of lower numbers, Indian visitors were the third highest tourism receipts-generating market for the first three quarters of 2010, reaching an estimated S$753 million ($587 million), the STB indicated. This was 30 per cent more, as compared to the corresponding period of the previous year.
“Singapore is one of the key markets in Southeast Asia. Unlike long-haul travellers (from Europe and North America), not too many in Asia can take five-six weeks of annual leave. So the preference is for gateway cities with great eating, shopping and hotels,” said Koldowski.
The average Indian traveller, a recent study by Nielsen and Pata suggests, spends about $1,645 (Rs 74,000) per trip, where approximately 45 per cent is spent on flight and accommodation and the rest on shopping, food, sightseeing and communication. With almost $1,000 (Rs 45,000) per family spent at the shops, the popularity of Singapore, itself a city of a few hundred malls, is partly explained.
In sum, even as Southeast Asia gradually emerges as a greater economic and political partner of India, the people of the two regions are apparently travelling closer just as rapidly.
