Indian tourists flock to Southeast Asia as China’s reopening slows

BANGKOK/NEW DELHI (Reuters): Indian tourists are flocking to Southeast Asia, cementing the world’s most populous country’s position as a key growth market for a travel and tourism sector feeling the pinch of a slower than China’s expected comeback. opening

From airlines like IndiGo and Thai Airways to hospitality chains offering thousands of rooms, companies are tapping into India’s growing middle-class and growing spending power, executives and analysts said.

“South-East Asia is clearly very well positioned for a lot of the growth that will certainly come from India,” aviation analyst Brendan Sobie told an industry conference last month.

The travel and tourism industry is critical for several Southeast Asian economies and contributed about 12% of the region’s gross domestic product before the Covid-19 pandemic. It also employs more than 40 million people in the region, according to the Organization for Economic Cooperation and Development.

For a decade or more, the sector has been boosted by China but official data from four South-East Asian countries show a weak recovery in Chinese visitor numbers in May of at least 60% lower than the same month in 2019.

A long-term increase in Indian tourists will lead to a recalibration of airline capacity, hospitality offers and tourism operators – early signs of this are happening, according to industry members.

India could emerge as the next China “in terms of outbound tourism growth” in the next decade, though connectivity will be hampered by fewer airports there, the Asian Development Bank (ADB) said in a report on May.

“India could be the story of the post-pandemic decade for tourism,” it said.

In Thailand, where tourism is an economic mainstay, the number of Indian tourists – though fewer than Chinese in absolute terms – was almost 14% lower than in 2019.

In 2019, Chinese visitors spent about $197 per day in Thailand and Indians spent about $180, both visiting for about a week, according to Thai government data.

Tanes Petsuwan, deputy governor of the Tourism Authority of Thailand, said 1.6 million Indians are expected to visit the kingdom this year.

In May, more Indians than Chinese visited Singapore while in the same month nearly 63,000 Indians visited Indonesia compared to just over 64,000 Chinese.

“Indian routes are very strong,” said Chai Eamsiri, chief executive officer of Thai Airways, which flies 14 flights a week to China – down from about 40 before the pandemic – and 70 a week to India. .

Some of the possible doubling of the Thai narrow-body aircraft fleet over the next decade will be deployed in India, Chai said.

Indian budget carrier IndiGo, which has ordered 500 Airbus narrowbody jets to meet demand in the region, said it has seen a “strong increase” in routes between India and Southeast Asia connecting it to more than 100 flights per week.

“We are introducing flights to Jakarta in August, as well as additional frequencies to Singapore,” said Vinay Malhotra, IndiGo’s head of global sales.

Overall, seat capacity on scheduled flights between China and Southeast Asia was 57% below pre-COVID levels in June but flights from India to the region recovered to around about 90%, said Sobie.

Indians are helping to sustain the post-pandemic rebound for hospitality chains, including Minor Hotels, which has 45 properties in Southeast Asia with more than 6,000 rooms.

“The Indian market continues to be one of our top source markets,” said CEO Dillip Rajakarier, adding that the hotel chain – part of Bangkok-listed Minor International – has intensified marketing across India.

In June, Pratyush Tripathy and four friends took a two-and-a-half-hour flight from the Indian city of Kolkata to Bangkok for a five-day vacation, most of it in and around the beach resort of Pattaya.

The trip costs between 40,000 and 60,000 Indian rupees (US$484-$726) each, about the same as a flight to Europe, Tripathy said.

“It will save you time and money too,” said the 33-year-old software professional, explaining their decision to visit Southeast Asia, where Indians can usually get visas easier than European countries and the United States. .

Flight bookings from India to Bangkok increased by 270% between January to June this year compared to the same period in 2019, according to Indian online travel portal Cleartrip.

Thailand’s central bank expects 29 million visitors this year and 35.5 million in 2024. That’s fewer than the record nearly 40 million in 2019, but the Bank of Thailand predicts the sector will help drive overall economic growth at 3.6% in 2023 and 3.8% the following year, compared to 2.6% in 2022.

To capitalize on the surge, Thailand’s tourism industry must understand Indians’ preferences, especially in food and entertainment, said Somsong Sachaphimukh, vice president of the Tourism Council of Thailand.

“If we don’t adjust quickly, neighboring countries will take those visitors,” Somsong said.

“Thailand has a lot to offer, so this is a big opportunity.”

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