November 27, 2015 TnH Global

India: a promising but under-tapped market for UK

Sustained higher growth in Indian outbound travel makes India a bright spot for foreign destinations and NTOs. For a country like the UK, which enjoys a positive image among Indians as a destination, it is important to reflect upon the reasons that have prevented the Country to grab a bigger share of the India outbound travel pie.

India is the world’s fastest growing outbound tourism market in percentage terms, and in terms of number, the country is the world’s second fastest growing outbound market after China. In 2014, Indian outbound travel grew by more than 10 per cent with 18.33 million Indians making overseas trips as compared to 16.63 million in 2013, the year which saw more than 11 per cent growth in Indian outbound travel. Indian outbound travel has registered an impressive growth over the many past years even when the Indian economy was not doing well. This tendency reflects a strong appetite among Indians to travel overseas destinations. India’s outbound travel is expected to grow faster in foreseeable future with the country’s economy expected to grow fast. The UNWTO estimates that 50 million Indian tourists will travel abroad annually by 2020, and its total outbound spending is expected to cross the US$28 billion mark.

Currently, India’s economic growth rate is highest among the BRICS countries. India is the 7th largest economy in the world by nominal GDP and third largest in terms of purchasing power. “India’s economic rise will introduce a new generation of middle class tourists to overseas travel,” said Dr. Rafat Ali, Secretary General, UNWTO.

Other factor that makes India an attracting outbound market is its demography. The country has a large young population, many of them ready to join the fast growing neomiddle class in the country, which is aspiring and has propensity to travel. More than 65% of India’s population is below the age of 35. For the UK Tourism, India is the 18th largest market in terms of visitors and 14th largest market in terms of expenses. India is currently Britain’s largest source market among the BRIC countries in terms of num- ber of visitor arrivals. The UK received 390,000 visitor arrivals from India in 2014 that is four per cent increase from 2013. VisitBritain aims to attract 500,000 Indian arrivals by 2020. In the long haul destinations, the US outshines UK in terms of receiving Indian arrivals, even though the UK is closer than the US for Indians. The US received 962,000 visitors from India in 2014 registering a growth of 12 per cent over 2013. This is surprising considering the long historical relationship between the UK and India, and Indians largely having a very positive image of Britain. Ideally, the UK should have been one of the most attractive destinations for Indians.

The UK’s tourism promotion authority, VisitBritain is targeting 80% growth in its Indian arrivals by 2020. The tourism authority hopes to achieve this ambitious target by leveraging the strong historical connection between the two countries, and through its marketing efforts. The countries like the UK, France, Italy, Germany and Switzerland are preferred destinations for Indian travelers in Europe. But experts believe that India is still undertapped market for the UK tourism. For a dream destination like Britain, which has such a strong historical relation with India, receiving meager 390 thousands visitors in a year is very surprising, and underlines the fact that the Country’s tourism authority needs to do much more to attract Indian visitors.

The UK can increase its share in the growing Indian outbound pie by promising value for money and promoting a galaxy of British destinations among Indians. There is a need to create awareness about the British tourism offerings. The country needs to diversify its tourism products and create awareness for the same, both among the Indian travel trade and consumers. Travel agents still play a key role in Indian travel market, despite emergence of online travel agencies. For any tourism board, engaging with travel trade and creating awareness among them about tourism products are very important.

The UK’s national tourism organization, VisitBritian has been in India for 25 years, and has actively been working with the Indian travel trade to promote Britain.

Through these roadshows, VisitBritain also works with UK Visas and Immigration (UKVI) in the Indian market to help facilitate a visa dialogue between the trade and the UKVI.

The Great Tourism Weeks will enable us to engage effectively with the pan-India travel trade and media, as well as providing platforms to introduce new UK tourism products for Indian travellers.

Speaking of the strategy to promote Britain in India, Shivali Suri, Country Manager, VisitBritain, India, said, “B2B segment remains our focus area in India because we know that in India B2B is still very important. Trade influences the choices of consumers, particularly the segments we are focusing on in this market. Indian consumers demand high degree of services, and they rely on trade for the same. So we do have a very strong relationship with Indian travel trade.”

Tier-II, tier-III cities in India are becoming market as important as tier-I cities, and VisitBritian is reaching out to these potential markets through travel trade. “We are working with the local trade to capitalize on the opportunities in tier-II, tier-III cites. India is a promising market,” said Suri.

VisitBritain engages with the India travel trade through its annual Great Tourism Week and as well as participating in trade show like SATTE. VisitBritain recently conducted its second annual Great Tourism Week 2015 across India. The Tourism Authority had held its first GTW in India last year. GTWs were held in 9 cities across India that include Ahmedabad, Mumbai and Pune in the West; Kolkata, Delhi and Lucknow in the East & North and ending with Chennai, Bengaluru and Hyderabad in the South.

Suri was hopeful that VisitBritian would be able to achieve its target of receiving 500,000 Indian arrivals by 2020. Speaking about the reasons for the modest number of Indian arrivals to the UK, Suri said, “India is an evolving market and younger lot has a different mindset and aspiration as compared to their elders. Unlike their elders, for whom the UK was preferred destination, the young generation has different preference.” She added that there is a lack of awareness about the kind diversity the UK offers in terms of attractions, experiences and cultural events. “For us it is important to highlight the fact that London is not the UK; we have a wide range of products beyond London.”

With inputs from Shayan Mallick