The India Report 2014

This report focuses on the Indian International Tourism Market and provides you with the key facts and motivators for the Indian market.

General Overview

Scottish Enterprise and Scottish Development International commissioned research into the International Tourism Markets of Brazil, Russia, India and China. This report focuses on the Indian International Tourism Market and provides you with the key facts and motivators for the Indian market. This report helps identify the opportunities for tourism in Scotland by providing information about what Indian visitors to Scotland want and expect. With that information, and by working together, you can help realise the tourism potential for Scotland.

The second most populated country in the world after China, India’s population exceeds one billion. Many of India’s cities have populations exceeding one million people, and key among these are Mumbai, Kolkata, Bangalore, Hyderabad, Delhi, Pune, Chennai and Ahmedabad. India’s economy is powerful and growing; however, institutional shortcomings tend to impact long-term economic development, and despite a large skilled workforce, poverty remains widespread. India is hugely diverse, with many languages, cultures and religions. Principal languages are Hindi, English, and over 20 other official languages.

India’s middle class is growing very quickly. Currently estimated at 250 million, this is set to grow to 600 million by 2030. This, coupled with annual GDP increases of more than 8% year on year, means that the opportunity for outbound tourism from India is huge. Competition for Indian visitors to the UK is intense, and while growth in visiting numbers has doubled since 2000, spending growth since that time has remained flat.

Market Analysis

With one of the fastest growing outbound tourism markets in the world, India has seen departures increase to 13 million in 2010 from 3.7m in 1997. That represents spending of $13.7 billion and makes it the world’s 23rd most valuable source market. For the UK, visitor numbers have doubled since 2000 to somewhere in the region of 355,000 in 2011.

Destinations in the Far East and USA dominate preferred choices for Indian travellers; however, Europe, including the UK, feature too. The European share of the market is estimated at around 20% of the total outbound market. This rate is growing at approximately 5-7% annually and could be pushed higher with emphasis on the Indian market by European tourism boards. The majority share of the outbound market for Europe is shared between UK, France, Italy, Germany and Switzerland. While USA controls the lion’s share (30%) of India’s outbound expenditure, the UK accounts for the fifth position in terms of spending.

Indian international leisure travel is dominated by the 25 – 65 years age group and features more males than females. Well educated, and part of the upper socio-economic class, the majority of travellers are married with children. Two thirds of this group travel abroad with family.

India has four main holiday travel periods, generally driven by school and college holidays. The first is the long summer break, often extending for up to two months within the period May to July when temperatures are at their highest. Christmas and New Year feature next, with a week or two taken, depending upon regions. Spring and autumn breaks are also popular for a week to ten days, although notably the autumn Diwali festival period sees little travel taking place. Finally, October to March sees the honeymoon market peak as this is when most weddings occur.

When travelling abroad, Indian tourists generally prefer accommodation of three stars and above.
Visiting friends and relatives represents the top reason for Indian outbound travel (43%). Of trips made to European destinations, 44% are business related, 40% for holidays and 16% for other reasons. Interestingly, the business travel segment is anticipated to be the largest future growth area due to India’s expanding global trade and investment relations.

Also of interest is research that reveals method in the Indian outbound travel pattern. Holidaying first in locations like Thailand and Malaysia, this then expands in distance to beach destinations such as Mauritius and the Maldives, then increasing further to Australia, Dubai and so on. Now experienced international travellers, their next steps tend to be Europe and USA and beyond.

In 2011, Indian tourists numbered approximately 19,000 (or 5.4% of total Indian visitors to the UK). That translates into 404,000 bed nights and spending totalling £13 million. People travelling to Scotland generally sit within age groups 16 – 34 years (41%), 35 – 54 years (34%) and over 55 years (22%). Research indicates that sightseeing and famous landmarks dominate the motivation to visit Scotland. While London is the city most visited by Indian tourists coming to the UK, Edinburgh and Glasgow rank in third and fifth place respectively. Forecasts suggest that the potential for increased inbound travel to the UK is set to increase sharply. By 2020, 500,000 UK visitors could see 25,000 projected visits to Scotland.

Scotland certainly features in Indians’ dream activities and iconic images. For example, in a VisitBritain survey, the second most iconic image of a holiday in the UK was a castle in the Scottish Highlands, selected from a pre-determined list of 15 images. Around 20% of Indian visitors want to spend a night in a Scottish castle; the sixth top activity chosen in a separate study of what Indian visitors would like to do while in the UK.

Indian visitors to Scotland will certainly enjoy castles, shopping and nightlife. They will also welcome guided tours, including ghost tours. Walking and hiking are popular pursuits, but not mountaineering or long duration treks.  The golf courses of Scotland will hold appeal for a select group of visitors. Traditional brands are popular and Scottish whisky brands are highly recognised and respected.

Planning and booking international holidays in India tends to carry a lead-time of around two weeks to four months for long haul travel.

With up to 30% of the population vegetarian, there are dietary considerations among Indian travellers. Since Hindus do not eat beef, and Muslims do not eat pork, the meats of choice are chicken, lamb and fish. Importantly, most Indian travellers like to know that traditional Indian food will be available. Some useful insights on food and drink preferences are:

  • Large portions of bread or rice are expected to be served with gravy-based dishes. Sharing dishes among a group is usual and dinner is generally late, not before 9pm.
  • Many Indians are keen to experience a full cooked breakfast; however, vegetarian considerations feature of course and fruit, cereals and toast should also feature.
  • Tea is preferred over coffee and generally drunk early in the morning (also known as ‘bed tea’, so in-room kettle facilities are important), mid-morning and at around 5pm.
  • While many Indians are teetotallers and expect water served with meals, those who do drink alcohol favour whisky, beer, vodka and rum.

The Online Trend

In 2012, India ranked as the fourth largest internet audience worldwide with over 70 million unique visitors. At 51% in the last year, Indian internet growth is enormous. The audience for online travel in India is quite narrow when related to the population as a whole. Discretionary travel tends to be domestic in nature and often motivated by social or religious drivers. The low number of websites used in India in the travel shopping process is directly linked to the relative immaturity of the internet market.

With the youngest market in the world, India is internet savvy. Travel research is mostly done online; however, bookings are made with agents in order to combine bookings with obtaining visas. Once visas are held, subsequent bookings are often made independently, particularly for business travel.

Anticipated to become the fastest growing online travel sales market between 2011 and 2016, India is expected to see annual compound growth of 30.6%. There is an overall shift from offline to online purchasing among Indian consumers for online travel sales. While India has been generally slow to embrace ecommerce, travel is the exception. Online travel purchasing currently represents over three quarters of total ecommerce sales.

Statistics show that website searches (59%), and family or friends’ recommendations (58%) are the main information sources that influence destination decisions. General search engines and online travel agency websites constitute the main sources for destination selection, at 72% and 66% respectively. Travel product selection statistics generally mirror those for destination choices. Insights suggest that websites or applications via mobile devices account for 24% of travel researching and 28% of travel product shopping.

In India, booking trends for air and lodging follow similar trends. Online travel agents in India take the lead over airline websites (51% vs. 17%), although offline channels remain popular with 15% calling travel providers and 11% calling or visiting retail travel agents. Online travel agents are also the most popular channel to book lodgings (39%), with 11% calling or visiting retail travel agents.

Local brands dominate the top travel sites in India. With the widest reach, Indian Railways tops the rankings, with MakeMyTrip and Yatra Online the leading online travel agents. Tripadvisor sits fifth in the rankings.

Indian travellers rate other people’s reviews of travel experiences highly. Statistically, only Russian and German travellers place a greater emphasis on the reviews of others.

While only 6.3% of the population of India were using social networking in India in 2012, this still represents some 76 million unique users. By 2014, double-digit growth will see 83% of internet users regularly accessing social networking sites. One in four online minutes in India is spent on social networking sites.

The following observations are interesting:

  • Twitter sees India as its eighth largest country, with 8% of all activity originating from India.
  • Facebook has over 63 million monthly active users in India, ranking it third in all Facebook statistics by country and the second most visited online destination in India.
  • Linkedin is India’s largest business network, with 300% growth seen in three years.Google+ gathers around 18% of its total users from India.
  • You Tube dominates for video viewing in India, used as the viewing source for nearly 45% of all videos watched.

Business Tourism

Statistics show that for the UK, Indian business tourism is an important and higher spend segment, reflective of the strong trade and commercial links between the two countries. In 2011 it accounted for 28% of all outbound visits and 45% of total spend. The average Indian holiday visitor spends £500, while the average business visitor spends closer to £1,400.

Incentive tours are an increasingly accepted and recognised marketing tool, and attending overseas meetings and international conventions is on the rise. With group sizes ranging from 50 – 500 people, this can be a very lucrative business opportunity. Recognising that transferring groups from London to Edinburgh or Glasgow could introduce barriers, Scotland’s retained status as a special and different place remains an opportunity.

While expert opinion suggests that those on extended business trips from India would choose to visit Scotland, stronger public relations activity is needed to raise awareness of Scotland as a destination. Examples of this could be family trips for journalists, including the whisky trail and castles. Such third party endorsement would help secure a larger share of this market. Promotion of flights, train journeys and driving holidays in Scotland would carry appeal and the power of engaging on social media sites used by Indians should not be underestimated.

How to Reach the Market

Analysis undertaken by VisitBritain reports that the Indian travel trade believes their links with the UK’s inbound tour operators, ground handlers and destinations could be improved. The same analysis shows that Indian tour operators actively promote the UK’s competitors more than the UK.

While it is difficult to ascertain accurate numbers of outbound tour operators, estimates suggest that there are around 500 active companies. Online continues to gain in popularity among discerning travellers and popular companies include:

Indian travel agencies doing outbound businesses can be categorised as follows:

  • National level companies like Cox and Kings, Thomas Cook, Kuoni, SOTC and Raj Travels deal with all segments, have their own group departures, and have packages online.
  • Those with expertise in handling large groups, who do all the work are experts in MICE and have a loyal clientele. These include names with a regional presence such as The Wanderers, Kesari Tours, Club 7, Raja Rani, Air Travel Enterprises, Travel Tours, Trail Blazers, Dewan Worldwide Holidays, Dimension Tours & Travels, Flag Travel Services, Gujral Tours & Travels, Inter Skylines, N.Chirag Travels, New Airways Travels, Riya Holidays, Travel Oyster India, TUI Select Vacations, Yatra Com, JTB Travels Pvt. Ltd, Journeys and Destinations, Mercury Travels, Trade Wings, Beacon Holidays, Kulin Kumar, Equino Fun Holidays, Gem Holidays, Geetanjali Travels, Camorron Travels.
  • New potential operators and agencies that could include India within their portfolios are Dream Horizons, Tristar Holidays, N. Chirag, Trans Gangetic, Pathfinders, Lifestyle, In Orbitz, Wingspan Holidays, Aarohan Tours, In Air, FCM Travels Solution, Spice Travels, Trail Blazers, Make My Trip, Saltours, Tsunami Tours, Koniva Tours, Flamingo Tours & Travels, Axis Worldwide Travels, The Wanderers, Away & Beyond, Southern Travels, Ice Travels, Holiday Pure Sundays, Zenith Tours.

Most Indian tour operators use Scottish based DMCs to make client bookings. Agents may book accommodation directly through wholesalers or consolidators, but touring holiday organisation tends to be handled by the DMC. Individual travellers generally use a combination of local tour operators and direct booking channels.

Most major tour operators plan their next summer brochures between October and December each year. Smaller operators may be later, but generally, December is the deadline.

Reaching these businesses effectively can be achieved by representation in India and on sales missions. For example, with VisitBritain. VisitScotland have also recently held roadshows and trade show booths. Notably, Indian tour operators do not generally attend the VisitScotland Expo unless specifically invited. Their main attendance is at World Travel Market and International Tourism Bourse.

The lead-time for the development of tour programmes tends to be quite short for ad-hoc ‘a la carte’ groups. Similar to individual travellers, the average lead-time is between 30 – 90 days. Brochure group departures on the other hand will carry lead times of between 4 – 6 months.

Doing business in India requires an understanding of Indian business etiquette. While there are no real ‘faux pas’ to be avoided, there needs to be recognition that Indians can be inclined to overstatement. For example, a promise to bring 5,000 visitors will in reality turn out to be far fewer. With a relatively disorganised market, background checks and acquiring appropriate intelligence on suppliers is also important. Many large tour operators act as both wholesalers and retailers. Licensing is not necessary, so a local, trusted supplier who can offer good advice on companies to work with is invaluable.

Sales and negotiation techniques vary little from the UK and, in the majority of cases; the final decision maker for holiday purchases in India is the end consumer. Public relations and sustained media activity proves vital in generating demand since intermediaries will only put together programmes that consumers demand or they believe they can sell.

Cultural Implications

There are very few cultural implications to consider that affect travel decisions and movement of Indian visitors. The major religions in India are Hinduism, Islam, Christianity, Sikhism and Buddhism. Diwali, or the festival of lights, takes place over five days between mid-October and mid-November, and this time is spent with family and not travelling. When travelling, some Muslims may like to know where to find the nearest mosque, but with the majority of cosmopolitan travellers, this will not be a requirement.

Did You Know?

  • India has the fourth largest internet audience worldwide and experienced enormous growth in the last year.
  • India is expected to be the fastest growing online travel sales market in the period 2011 – 2016.
  • Websites and personal recommendations from friends and family are key influencers in destination decision making.
  • Social networking is on the rise in India, with millions of unique users. Over two thirds of internet users use online reviews to make purchase decisions.