Opportunities for the Indian Outbound VFR Travel Market

As we at MyTravelResearch.com prepare to leave for Australia Business Week in India, an Australian Government-led trade mission, we thought we would share with you our excitement about the massive potential the Indian outbound travel market has for Australian tourism. India is one of the fastest-growing markets for international travel, alongside China. Here are just a few of the (fairly mindboggling) predictions. According to Amadeus and Frost & Sullivan India’s middle class is forecast to grow from 5% of the population currently, to 50% by 2030 … only 15 years from now. As India is also forecast to outpace the world average on population growth, that could be a whopping 750 million potential customers! Indians love to travel. A few years ago, research showed that after owning a house, the thing most Indians wanted was to travel. When I raised this with my (airline) clients on my last visit to India, they laughed and pointed out that a holiday is actually more affordable so is something Indians are likely to do first! As a result, the World Tourism Organisation (UNWTO) estimates that there will be 50 million outbound Indian travellers by 2020. In 2011, Indian outbound travellers spent $USD13.3 billion on international travel. Even if we ignore the strong likelihood that the growth in India’s middle class will increase average expenditure per trip, the Indian outbound market will be worth at least $USD91.2 billion globally! And we stand to get a good share of that if we play our cards right. Tourism Australia anticipates India will be worth $AUD1.9 billion-$AUD2.3 billion to the Australian economy in five years’ time (up from $AUD0.7 billion in 2013). Just as excitingly, the Indian market keeps on giving. 47% of arrivals in 2013 repeated visitors. So, which market segment holds the greatest potential for the Australian tourism industry? Where is the low-hanging fruit? The answer, we believe, is VFR (or Visiting Friends and Relatives). Why VFR? James Horan;Destination NSW India has a widely dispersed population, with about 100 million settled overseas, mostly in North America, Australia, and the UK. Australia is at the forefront of this growth. Indian-born Australian residents doubled from 2006-2011 and India is now the largest source of permanent migration to our country. This vast and growing diaspora creates a major trigger for tourism. According to Amadeus, Frost, and Sullivan, 43% of Indian travellers identified VFR as the main reason for their international travel. The Australian Bureau of Statistics (ABS) plots trends from those incoming passenger cards everyone completes when they land. “VFR” began to exceed “holiday” as the purpose of visit for Indian inbound travellers around 2007. So this is the segment of the market that is growing. Although Indian VFR travellers don’t currently spend that much per night ($37 on average over 2009-2013 according to Tourism Research Australia), they share with backpackers the trait of staying a long time (59.7 nights). This makes them valuable to the economy overall and a great opportunity for dispersal. So there remains a significant opportunity for the Australian attraction, tour operator, and hospitality sectors to capitalise. Also, holidaying in Australia is generally perceived to offer ‘bragging rights’ back home! This creates a pool of advocates in a market where we know many are very digitally savvy. Indian travellers are very active in social media. So you can use this market as your advocacy base. So how do we connect with them? Firstly, we know that they place great importance on the recommendations of family and friends who live in Australia or who have previously visited, in influencing their holiday choices. Again building your advocacy base among hosts and visitors is really important. James Horan;Destination NSW Packages are important. Research by Tourism Australia in 2013 found that 35% of Indian travellers prefer a pre-packaged group tour travelling only with family and friends, whilst another 33% prefer a package that is customised to their needs or those of their friends/family. Work with the trade in India (or via events like ATE) to get those tailored packages set up before they leave – or reach the market here via targeted deals. In Sydney for example, the Indian diaspora has a heavy concentration in Parramatta, making them very cost-effective to target. Have they ever thought of having a stand-in or close to Parramasala? Like many emerging markets, hygiene factors are really important. So, among the five most important factors Tourism Australia identified when selecting a destination were a safe and secure destination (No. 1) and one that offers value for money (No. 3). When they get here they want to enjoy beautiful and natural surroundings (No. 2), visit interesting attractions (No. 5), and enjoy good food, wine, and local produce (No. 4). So make sure you: Emphasise that you welcome Indian guests. Show you are excited they are coming. Leverage your connections with trade to do this. Use imagery with Indians in it. Connect to your local community. As well as being great marketing approaches, these activities have a brand value. Feeling welcomed is an important proxy for feeling safe in consumers’ minds. In itineraries, provide useful information and safety tips. But ALWAYS couch these in reassuring language. Incidents are rare (especially by international comparisons) but acknowledging and minimising risk is important. Use language that talks about value, show inclusions, talk about the experience. Include imagery that showcases natural beauty. If you are a city or town, clean, green, and spacious areas are important. But show a few people in the photo – empty doesn’t necessarily appeal to Indians in the way that it does to Australians. Show your attractions (again ideally with Indian visitors in the photo so they feel welcome and safe). Think about packages that reflect the nature of Indian families – large, extended, and multi-generational. This again reinforces the value proposition. Remember that Indians like spicy food! So use vibrant coloured food shots. They’ll enjoy local cuisine but offer them options for a hotter version (chili flakes or sauces on the table). Masterchef Australia was the top-rating reality TV show in India – so it’s worth linking stories to that if you can. Use your resources: check with your RTO what their plans are for India, and work with your STO and Tourism Australia. They will have major campaigns in the market (eg. DNSW’s Jhappi Time Campaign). Tourism Australia also has a lot of resources to guide marketing in India or developing product to meet their needs. Above all, be in it for the long haul. Besides the size of the opportunity, one thing that both the Chinese and Indian outbound travel markets share is the need to build relationships over the longer term. That’s why we are heading to India this week. We don’t expect short-term results – but we do think that this will contribute to a growing, sustainable long-term result. For more helpful tips, check out our blog Tips On How To Promote and Attract Indian Tourist Stay tuned for further information on the Indian outbound travel market throughout January! Guḍabāya! (That’s goodbye in Hindi) Do you want to hear more from us? Want to be kept up to date with the latest travel and tourism insights? Join Our Mailing List. Every 2 weeks, we send the latest practical insight for you to apply to your business and destination marketing.

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