What is the purchasing power really like?, Indian tourists are becoming new targets of competition among Southeast Asian countries

Recently, Thailand's newly appointed Prime Minister Saita stated that he is considering introducing visa free policies for Chinese and Indian tourists.

Prior to the pandemic, China had long been Thailand's largest source of foreign tourists. Recently, there has been a rapid increase in Indian tourists visiting Thailand. As of 2022, the cumulative number of Indian tourists visiting Thailand has reached nearly 1 million, making it the second largest source of foreign tourists in Thailand.

Now, Thailand plans to offer the same policy benefits to Chinese and Indian tourists. In a report released in May this year, the Asian Development Bank stated that in terms of the international tourism market, India may become the "next China" in the next 10 years.

Parit, Senior Researcher at the South Asian Institute of the National University of Singapore, told First Financial reporters that India's economic growth is not limited to the manufacturing industry, but also lies in the service industry, including tourism.

Indian tourists taking photos in front of the Singapore landmark "Merlion" as a memento

Competing for Indian tourists

According to statistics released by Thailand, the number of Chinese tourists entering Thailand in the first seven months of this year reached 1.8534 million, while the number of Indian tourists was 889500. Tani Peisuwang, Deputy Director of the Tourism Authority of Thailand, said that it is expected that 1.6 million Indians will travel to Thailand for tourism this year.

According to on-site observations by First Financial reporters in Phuket, Thailand in March, the proportion of Indian tourists among foreign tourists has significantly increased compared to before the epidemic. According to data from Cleartrip, a large online tourism platform in India, flight bookings from India to Bangkok increased by 270% year-on-year from January to June this year compared to 2019.

This new change has also attracted the attention of Thailand. Thai columnist Samli stated in 2022 that Indian tourists have become a "must-have" for the Thai economy, which is highly dependent on tourism. The Vice President of the Thai Tourism Association, Song Song, also reminded Thai industry professionals that if they do not accelerate the provision of tourism products and services that are more suitable for Indian tourists, these tourists will flow to other Southeast Asian countries.

It is not only Thailand that has sniffed this business opportunity. The Director of Vietnam's National Tourism Administration, Nguyen Chung cheong, stated that Vietnam has identified India as one of the largest potential markets and needs to increase its promotional efforts to attract tourists.

According to statistics from the National Tourism Administration of Vietnam, in the first six months of 2023, the tourism industry in Vietnam received approximately 5.6 million international tourists, with strong growth in the Indian market, with over 141000 tourists, making it the tenth largest tourist source market in Vietnam. Currently, there are over 60 direct flights between Vietnam and India per week.

The tourism industry is crucial to the economy of Southeast Asian countries, accounting for approximately 12% of the region's gross domestic product before the pandemic, with over 40 million employees. Therefore, in order to promote more Indian tourists to Southeast Asia, Southeast Asian countries have increased flights to and from India, and chain hotel groups have also targeted the Indian market for advertising.

In fact, the growth of the Indian tourist market is not limited to Southeast Asia. In July of this year, the Swiss Embassy in India issued a notice stating that due to the large number of visa applications, visa applications for collective travel of enterprise employees will not be accepted until October. This type of travel is usually a performance reward for employees by companies, and the size of the tour group can reach up to hundreds of people.

Tends towards "special forces style tourism"

According to reports from organizations such as the Federation of Indian Chambers of Commerce, it is expected that by 2024, the annual overseas tourism expenses for Indians will exceed $42 billion, which is 1.8 times that of 2019 and 3.3 times that of 2021.

India has become the most populous country in the world this year, with an increasing number of tourists going abroad, mainly due to economic development, increased per capita disposable income, and enhanced consumption capacity. In the past, Indians who were able to travel abroad were mainly in first tier cities in India. However, existing data shows that many residents of second - and third tier cities in India are becoming a new force in India's outbound tourism.

In addition, India has built and expanded a large number of airports and added routes in recent years. In the past, India's airports were dilapidated and narrow, with insufficient international routes, which to some extent suppressed the demand for people to travel abroad.

The emergence of Indian tourists has also to some extent changed the consumption structure of tourist destinations. For example, Thai tourists have stated that compared to Chinese tourists who prefer to buy gold and silver jewelry, medicinal herbs, and supplements, Indian tourists are more inclined to purchase low-priced electronic products.

Meanwhile, Indian tourists are highly sensitive to prices. Tourists have expressed that they are known for bargaining, and compared to Chinese tourists, Indian tourists find it difficult to earn money. At the same time, Indian tourist groups also tend to prefer "special forces style tourism", visiting many scenic spots but staying for a short time, which means that destination tourism practitioners find it harder to make money.

However, in August, Thompson, President and CEO of the National Tourism Administration of the United States, stated that the number of tourists from countries such as Canada and India coming to the United States this year will exceed pre pandemic levels, but these developments still cannot make up for the shortage of Chinese tourists.