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Growth in Indian Tourists Present Opportunities

February 12, 2020
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Amidst the slow tourism growth, some light is shining on the Indian tourist market as this market is one of Thailand’s fastest growing feeder markets and maybe it is time that we start paying more attention to increase the share of this market apart from focusing on Chinese tourists as we have been in the recent years.

Visitors from India, with the world's second largest population behind China and a fast-growing economy, will undoubtedly be a strong foundation for Thailand's tourism industry. Today, there are only around 20 million Indians travelling out of the country either for business purpose or leisure. However, according to India’s Ministry of External Affairs, there are more than 65 million passport holders in India. This big gap says that there will be more opportunity for Indian tourists going abroad within the next 3 to 5 years.

Thailand is one of the top destinations for Indian tourists together with Singapore, Malaysia and Australia. According to records, there were 1.9 million Indian visitors to Thailand last year, with a Y-o-Y growth of 25%. It was a good sign from this market after the Visa on Arrival fee exemption was launched in November 2018 and has been extended until April 2020.

Increasing accessibility to internet is an important key that inspires Indians to travel. According to Bain & Company’s “How Does India Travel?” report, more Indian travellers, nearly 35%, will be booking trips through online channels by 2021. The mid-market and budget hotels accounted for 48% of Indian accommodation spending which is expected to accelerate at a CAGR (compound annual growth rate) of 15% over the next 3 years. Availability of short-haul direct flights is another key that draws demand and Thailand is only 1:30 hours ahead of India. In the past 3 years, full-service and low-cost airlines opened new direct flights between Thailand and many cities in India.

What’s interesting is that Indian tourists are likely to visit Thailand during low seasons, when most of the hotels, restaurants and tours are low in occupancy rates. This could provide a long-term benefit to the hotel market especially for resort destinations such as Phuket, Chiang Mai and Pattaya.

However, one thing to be concerned about the Indian market is their spending power. Even though the number of Indian visitors rose to third highest in terms of international tourist arrivals to Thailand, their spending power is ranked 5th, behind Russia and Japan.

Looking ahead, although China remains the biggest feeder market of Thailand’s tourism, it is the time that Thailand should be putting eggs in different baskets to lower risks from heavily relying on a single feeder market.

An article written by Pawika Thienwongpetch, an analyst at CBRE Thailand for Bangkok Post dated 12 February 2020.

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