“While tourism boards worldwide view China as the gold-medal inbound market, India is moving onto the radar. Chinese arrivals remain superior in most key destinations, but Indian holidaymakers are increasingly adventurous and are starting to expect the same enhanced visa access and bespoke travel services enjoyed by their Chinese counterparts.”

China and India, which are Asia’s twin economic powerhouses and the only countries on the planet with populations exceeding a billion, are vastly different in terms of cultures and demography, as well as economic and political structures. However, these continental-sized nations share an unquestioned commonality: they are set to dominate global tourism for the foreseeable future.

China and India count fast-growing outbound markets and expansive domestic travel economies that are primed for further expansion through the next decade. By comparison, inbound tourism is an underperforming segment for both countries. China ranked fourth worldwide for inbound arrivals in 2017, with a 4.59% global share – although this was bolstered by visits from Hong Kong and Macau – while India was the 26th-most-visited country, with a 1.17% share. The Chinese and Indian governments have said they will intensify efforts to attract more travellers to stay longer and spend bigger.

While each country provides capacious opportunities and challenges for tourism providers, they are transitioning through different stages of economic development. At present, China is a more developed economy than India, having opened to global markets at an earlier stage and invested heavily in transport and urban infrastructure, job creation and poverty reduction since the late 1980s. It has a larger proportion of urban middle-class consumers, although its population is ageing faster. China identified the economic and political benefits of tourism earlier than India, and its outbound market, which became the world’s largest in 2012, logged 71 million international departures in 2018.

While the world’s tourism destinations have viewed China as the most prized source market for much of the past decade, India is moving onto the radar. This is primarily due to the potential of its fast-developing economy. India’s proportion of consumer spending to gross domestic product (GDP) is around 60%, compared to 40% in China, and its consumers are demonstrating a healthy appetite for travel with domestic air-passenger traffic doubling during the last five years. In many aspects, India is playing catch-up to China, and its investment thrust into airports and transport infrastructure will take time to deliver the same results. Hence, India registered around 26 million outbound departures in 2018.

There are shared similarities, too. Tourism in both countries developed from a package-tour model but the balance is shifting towards independent travel, while the level of state-direction is high and peak travel periods are aligned with public and school holidays. Fervent technology adoption is shaping demand for travel in both ‘mobile first’ countries, and booking is gravitating onto smartphones. China and India have a high quantity of Millennial consumers, who seek transformative experiences, eagerly consume travel content on social media and are more demanding than their parents, while sharing a cross-generational liking for multi-destination trips. Meanwhile, untapped demand in China and India is influencing destinations to relax visa rules and raise their marketing spend to attract more travellers.

A pronounced rivalry also exists between these two proud and patriotic nations, and the world is beginning to witness the overlap of their geo-strategic ambitions. In addition to more vociferous trade and political frictions, China and India are drawing the battle lines for a tourism power struggle that extends beyond their own tourists. Online travel booking and hotel companies that have achieved scale in each country are globalising their operations, and both China and India are seeking to attract more tourists from each other. In destination-marketing terms, it is Beautiful China v Incredible India, the world’s largest outbound market versus its emerging contender. Watch this space.

This report looks at the following areas:

  • What are the current sizes of China and India’s domestic, inbound and outbound markets?

  • How are macro-economic factors, government policies and societal changes shaping the dynamic growth of travel and tourism in China and India?

  • Which destinations are popular with Chinese and Indian outbound travellers, and where are the emerging hotspots?

  • What are the key similarities and differences between travellers from China and India?

  • To what degree are new air routes shaping tourism growth from both China and India?

  • How will population demographics and the adoption of new technologies influence future trends in Chinese and Indian domestic and outbound travel?

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