Indian Travellers Seek to Diversify, Reports Nielsen / PATA Survey

28 March 2011

INDIA. The Indian leisure traveller is now more open to exploring newer destinations, according to findings revealed in the latest edition of the Nielsen India Outbound Monitor.

A study done by the Nielsen Company in association with the Pacific Asia Travel Association (PATA), shows that destinations such as China, Maldives, Indonesia, the African continent and even neighbouring Bangladesh, have witnessed an increase in interest among Indian travellers as destinations they plan to visit in the future.

Singapore remains the top destination for both the business and leisure traveller on the current list of most visited destinations, but its dominance has diminished since 2008.

The Nielsen Company Executive Director Surekha Poddar said: “The diversification in destinations indicates a greater sense of adventurism and discovery that should be heartening for tourism as a whole, and a clear symptom of a confident Indian consumer mimicking their country’s confidence and prominence. The Indian traveller is set to become a prized possession as potential spending power and disposition to travel to new countries increases.”

In terms of trips taken in the last year, Singapore’s share based on travellers indicating their most recent trip taken, has reduced to 24% in 2010 from 32% in 2008. Similarly, for business travel its share has fallen from 25% in 2008 to 15% in 2010. Malaysia ranks second for leisure travel and Dubai for business travel.

Countries that have shown a rise in business traffic from India include Japan, China and Sri Lanka. On the whole, Asian countries account for 76% of leisure travel by Indians and 63% for business travel. Regions such as Europe attract a higher percentage of business traffic (14%) rather than leisure (10%).

The top reasons which drive destination choice for leisure travellers are visiting friends/relatives (26%), range of leisure and entertainment activities (18%), and scenic/natural beauty of the destination (10%). Visiting friends/relatives is the most cited reason for older travellers and their destinations largely tend to be US and the UK. The corporate segment which forms the bulk of business travellers, choose destinations based on perceived business conduciveness for conferences and off-sites.

“Countries competing for Indian globetrotters can take definitive cues from the drivers of destination decision-making. By showcasing their receptivity to visitors and a variety of recreational facilities ‘country’ marketers can hope to become the destination of choice,” said Poddar.

Among places that leisure travellers plan to travel to, there seems to be a significant shift to newer destinations such as China, Indonesia and Africa, among others. (Please refer to table 1, at right: The Indian Traveller, Tier I vs Tier II).

While most outbound travellers from India belong to the affluent, well educated segment of urban India, there are some differences in the profile of travellers based on the size of the town or city.

Travellers from the larger Tier I cities tend to be of a higher socio-economic profile and younger than those from Tier II cities. There has been a rise in the intention to travel among both Tier I and Tier II travellers; also, 22% of travel from Tier II cities is funded by their relatives while for Tier I cities it is a mere 14%. Travellers from Tier II cities who are funding their own travel tend to spend a lot more time planning their trips and largely rely on travel agents to source information for trip planning.

“With the growth of India as a source market for the travel industry, there is an increasingly greater focus on targeting the Indian traveller. One of the most critical observations is that the Indian traveller is not a homogenous entity,” added Poddar.

“Apart from the natural segments of those travelling for business or leisure, there are key sub-segments across tiers of towns and different life stages and work profile. Travel motivations also differ in each of these sub-segments as do their planning and their choices.”

The Indian traveller remains as value-conscious as ever, the findings revealed. With growing choices at home, Indians have not really expanded their travel budgets. Overall, travel expenditure has remained the same as 2008 among leisure travellers. Business travellers have, however, seen a significant reduction in overall trip expenses.

According to the study the average trip cost for the entire family is around US$3,663. As the average group comprises two travellers, it works out to US$1,645 per traveller. Flight and accommodation account for around 45% of costs and the rest is available for the traveller to apportion across other expenses such as shopping, food, recreational/sightseeing activities and communication. Of the discretionary spend, shopping gets the greater share: outbound tourists spend US$1,000 on an average on shopping, per family.

Thai Airways emerged as the top airline among leisure travellers in terms of customer satisfaction, followed by Jet Airways and Malaysia Airlines. For business travellers Singapore Airlines tops the list, followed by Emirates and Malaysia Airlines.

For travellers booking via travel agents, small local travel agents combined account for a little over a quarter of all bookings. Among the national players, the OTAs (Online Travel Agents), Yatra and Make My Trip, as well as travel agencies SOTC and Thomas Cook, account for the bulk of bookings. Leisure travellers who booked through SOTC gave it the highest satisfaction ratings while business travelers said they preferred booking through Thomas Cook the most.