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India is Asia’s new market for discretionary items! The new center of luxury in Asia has well-heeled elites that are expanding rapidly into the market for luxury goods beyond the affluent class. India has become home to a rapidly rising group of millionaires, there’s a growing demand for designer clothes, high-end jewelry, luxury cars, and vacation homes. Affluent residents are spending closer to home, since India caps the amount of money that can leave the country, aka there are, unfortunately, still heavy administrative burdens to overcome the free import and export of money. According to Bloomberg, in one coastal city that people call Mumbai’s Hamptons, some houses cost nearly $5 million.

A great majority of India’s population can’t afford to travel by air. But there’s still a sizable number of Indians who fly regularly and the number is growing fast. Estimates by McKenzie suggest that there are 42 million who travel at least once a year. Among them are business leaders, workers, and students who want quick and easy travel to places both inside and outside of the country. To cater to the growing middle class, India’s major airlines have spent billions to buy about 1,000 planes in 2023 (500 Airbus, 470 Boeing), far outpacing any other country. The fast expansion in aviation is a striking accomplishment for India, it advances most in the global economic arena.

Also, as an EM country, it has recovered best in the segment of pre-pandemic outbound travel. In 2022, 12 million Indians traveled abroad, which represents a whopping record recovery, outpacing many developed market countries.

In essence, India’s surging travel demand is generated by Millennials and Gen Z. Wealth accumulation is growing the fastest in these two parts of the population. At the same time, these two categories address the changing needs of the industry as a whole for the decades to come. The country’s robust recovery in post-pandemic travel and its residents’ growing demand for international travel suggests that a wave of Indian travelers could soon set out to see the world. By 2040, India’s tourists could make more than 80 million outbound trips a year.

What are the top destinations?

For now, Indian tourists prefer proximity. Because of the strong historical ties, the UAE has long been the top destination for India’s travelers, on the one hand, tourists traveling for pleasure to Dubai and on the other hand, workers who perform day-to-day jobs in the UAE and which spend part of their spare time with the family back home.

The UAE destination is closely followed by South Asian destinations, such as Thailand and Vietnam. For long-haul trips, however, travelers prefer to visit North America and Western Europe; a key destination for UHNW is Switzerland.

Bollywood magic in Switzerland

As of 2019, only 6 percent of Indian travelers focused on long-haul destinations. Switzerland has been an Indian top-20 destination for over a decade. Switzerland is popular with Indian travelers as many relate the local scenery to Bollywood films. This is true since Bollywood features Swiss attractions as up to 200 film sequences are produced in Switzerland. Also, Indian people feel at home since there are plenty of Indian restaurants and cultural festivals, and English is widely spoken in the country.

The luxury of Dubai is within reach

In 2022, India was the largest source market for leisure travelers to Dubai. The city is known for its luxury offerings and, perhaps surprisingly, also offers a wide range of accommodations, such as 3-star options. Furthermore, there are plenty of flights from India to any destination in the UAE daily. Given the heavy competition, they remain affordable when compared with flights of similar distances.

Vietnam takes off

Back in 2019, there was one weekly connection from Kolkata to Vietnam. Today, numerous destinations and flights are available to Vietnam as the country starts to stand out from its Southeast Asian neighbors. Year to date, direct flights have skyrocketed and 2024 will be even better than 2023.

Thailand covers the interests of many

Over the past decade, Thailand launched 50-plus marketing campaigns specifically for Indian consumers, travel agents, and niche businesses. A particular campaign focus was given to newly married people for whom Thailand has become the top choice. As Thailand is moving up and scaling its services, it can be expected that Thailand will direct its attention to the mass market and high-end spending groups.