Thursday, May 11, 2023

Visa – EY Report Identifies Disruptive Megatrends Driving The Journey To A $1 Tn Tourism Economy

* 400Mn jobs to be created by 2047 in the tourism industry

I* nternational tourists in India spend 26x more than domestic, hence attracting global visitors is key

Visa Inc. (NYSE: V), the global leader in digital payments, and EY, the leading professional services organization, have launched a comprehensive report titled "Charting the Course for India – Tourism Megatrends Unpacked,". The report reveals that India's tourism industry is on track to reach US$1 trillion by 2047, with data-led tourism set to be a key driver of growth. It takes a long-term view of India's tourism industry, beyond the pandemic's impact, and identifies the megatrends expected to shape the sector over the next decade.

The report was unveiled in the presence of Amitabh Kant, G20 Sherpa, and former CEO, NITI Aayog, and Alfred F. Kelly Jr., Executive Chairman, Visa, at the ASSOCHAM India Tourism Conference in New Delhi.

Commenting on the report, Sandeep Ghosh, Group Country Manager for India & South Asia, Visa said, “The projected growth of India's tourism industry to reach US$1 trillion by 2047 is an exciting opportunity for the country. By aggregating and utiliing data from various stakeholders, such as payment service providers and private tour operators, we can help create a more resilient and sustainable tourism ecosystem for India. The report's findings demonstrate that the key to building a robust future for India's tourism industry is through data-driven insights. Visa's Destination Insights, which have already proven successful in London, Singapore, and Australia, offer a valuable tool to measure the impact of tourism and support decision-making."

In the last two years, the pandemic has spurred a rapid global research effort into the tourism sector, leading to the emergence of some long-term and self-sustainable solutions. In India as well, there has been an extensive discourse on the impact of COVID-19 on the sector, resulting in issues and solutions created by the sector and government.

Pragyal Singh, Partner, Business Consulting, EY India, while speaking of the report said,

"The travel & tourism industry is a major contributor to economic development and job creation in the world and tourism in India is also poised to grow rapidly across various segments. The potential of tourism to create massive economic impact, however, has remained as yet untapped. The Government of India is continuously working on multiple initiatives such as PRASHAD, Swadesh Darshan and Dekho Apna Desh to support and nurture the travel ecosystem. The Draft National Tourism Policy provides a timely and innovative framework for sustainable and holistic growth of tourism in the country. The Ministry of Tourism has designated the Year 2023 as ‘Visit India’ year and is also developing a Visit India 2023 strategy. There is a need to understand the megatrends affecting the tourism sector over the next decade and for the entire ecosystem to collaborate for ensuring the economic benefits of this growth are realized."

The report identifies Sustainability, Enabling Technologies, and Evolving Tourist Preferences as the main disruptive forces driving tourism. Sustainable tourism experiences and offerings are in high demand worldwide, and this trend is likely to continue in the future. At present, the global sustainable tourism market is valued at US$180 billion. In India, this is valued between US$26 million- US$2.5 billion and is expected to grow at 15% CAGR.

The second major trend is the role played by innovative technologies and digitalisation. In the aviation, travel, and tourism industries, digitalisation is expected to create US$305 billion in value and move US$100 billion of value away from traditional players to new competitors globally.

Another key trend identified is evolving tourist preferences, driven by the presence of Gen Z, which constitutes 24% of the global population and 27% of this is in India. The report offers detailed insights into the segments that will play a critical role in driving tourism industry growth and the Indian economy at large.

·       Spiritual tourism will play a key role since 60% of domestic tourism in India is spiritual in nature, and 30.5 million international travellers are expected to visit India by 2028 for this purpose.

·       Medical and wellness tourism will witness growth with a potential for 24 million jobs to be created by 2032. In 2021, 21% of international travellers sought medical treatment in India .

·       Adventure and sports tourism has a potential to create 6 million jobs by 2032. Globally, an average adventure tourist spends US$2,900 per trip.

·       Business travellers and MICE – India’s share in the global MICE market will more than double from 2019 to 2025. In 2021, 12.1% of foreign tourists visited India for business purposes.

·       Travel mobility – Airports in India will increase to 220 by 2025 with US$1.5 trillion worth investments through the National Infrastructure Pipeline Scheme (2020-25)

The report offers some recommendations to strengthen and accelerate India’s tourism industry:

Sustainable tourism certification and measurable standards based on data are needed for a resilient and sustainable future

Open mobility, integrated seamless fare systems, account-based payments, and the application of Payment Infrastructure Development Fund (PIDF) as steps towards redefining the future of transit.

Travel-tech startup ecosystem requires structured funding and incubation support

Enable tourism industry workforce through relooking at labor contracts, providing vocational training and tech-skilling programs to realise the benefits of enabling technologies.

 Visa and EY believe that by implementing the insights from this report, India can create a more sustainable and tech-enabled tourism industry, which will benefit the country's economy, people, and culture.

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