Indians spent Rs 6.5 lakh crore on travel in 2018


With an increasing disposable income, Indians took more than 182 crore domestic and international trips in 2018, spending upwards of $94 billion ( Rs 6.5 lakh crore), which is equivalent to about 3.5% of gross domestic product.

Expenditure of Indian travellers grew at a compounded rate of 9.3% over the last three years and could grow up to $136 billion (Rs 9.5 lakh crore) by 2021, according to a joint report by Google and management consulting firm Bain and Company.

Domestic trips accounted for the majority of the travel at close to 180 crore domestic trips last year and an expenditure of roughly $72 billion. Meanwhile, 2.6 crore international trips were undertaken by Indians during the year, running up a bill of $22 billion.

Indians spent close to 11% of their average disposable income on travel and tourism, which is comparable to developed economies such as the US, UK, Japan, and Australia, the report stated. Airways is fast gaining popularity with Indian travellers.

Expenditure on air travel grew at a compounded rate of 24% over the past three years. More than half of the $36 billion spent by Indians on transport in 2018 was on airfare as they increasingly preferred planes over trains for long distance journeys, said the report. However, cost-effective transportation by railways still remained dominant, with close to half the trips in India being on railways.

India has about 39 crore active internet users, and it hardly comes as a surprise that about $23.5 billion, or 25% of the expenditure on travel, was spent online. The penetration of online booking is high for air and rail travel, at more than 50%, while for lodging it remains moderate at 26%, as per the Google and Bain report.

While the report predicts the expenditure on travel by Indians to grow to $136 billion in the next three years, online bookings could grow by $24 billion during the same period, it said. That throws up immense opportunity for online travel aggregators.

The tourism industry, which includes local tourism as well as inbound tourism from other countries, is one of the major generators of employment. It accounted for 9.4% of India’s GDP in 2018.