OPINION: Indian’s spend on foreign travel has hit eye-popping proportions. In the first five months of the current fiscal year 2016-17, Indians spent 1516% more than what they did last year.
Between April-August 2015, Indians spent $69.9 million on travel related remittances. Between April-August 2016, they spent a whopping USD 1.12 billion. This was also the most increase in dollars spent in a remittance category.
The rise in travel spends is in line with overall increasing foreign currency spends by Indian nationals. In the five months of this fiscal, from April to August, individual remittances from India touched USD 3.45 billion as per Reserve Bank of India (RBI) data. This is almost twice of what they spent in the same period last year at about USD 1.8 billion.
Spends on ‘maintenance of close relatives‘ was the second highest category after travel with a jump of 209%. It grew from $296 million in April-August 2015 to $916 million in the first five months of the current fiscal. Spends on studying abroad came in third. From $307.2 mn in April- Agust 2015, they increased to $585.8 for the same period in 2016.
Individual Indians can spend up to $250,000 overseas without any specific approvals under the Liberalised Remittance Scheme (LRS) at present.
While the reasons for the sudden increase in spends including that on travel continue to baffle many, what one can surely take away from the numbers is that Indians are out to play in the global arena and travel is their favourite game. More importantly, they are willing to put their money where their heart is. Outbound tourism spends from India just got real. Real enough for tourism boards and companies around the world to pay closer attention to the Indian traveller.
At a billion dollars plus in just five months, they are surely real enough to warrant a fresh approach to the Indian travel markets. While travel companies, tourism boards, airlines and other stakeholders already make efforts to market themselves in India at present, it seems that their job is set to get tougher.
Like their global retail counterparts like Gas, Espirit, Benetton, Zara and Marks & Spencers, they will soon find that there is no ‘one size fits all’ approach to the Indian consumer. Many of these brands realised that they had to get their pricing strategy, consumer targeting, brand messaging, geographical product modifications just right to get the Indian consumer to open his wallet. Those who did made money, those who did not, shut shop and went home.
For travel, it is bound to be the same long and steep learning curve. And the work has just begun.