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

Indian tourists are streaming into Southeast Asia, cementing the world’s most populous country’s position as a key growth market for a travel and tourism sector that is feeling the pinch of China’s slower-than-expected re-opening.
From airlines like IndiGo (INGL.NS) and Thai Airways (THAI.BK) to hospitality chains offering thousands of rooms, companies are tapping into India’s burgeoning middle-class and growing spending power, executives and analysts said.
“Southeast Asia is obviously very well positioned for a lot of the growth that is inevitably going to 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 of the region’s people, according to the Organisation for Economic Cooperation and Development.
For a decade or so, the sector was fuelled by China but official data from four Southeast Asian countries shows a weak recovery with the number of Chinese visitors in May at least 60% lower than the same month in 2019.

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A long-term increase in Indian tourists would lead to a recalibration of airline capacity, hospitality offerings and tourism operators – early signs of which are underway, according to industry members.
India could emerge as the next China “in terms of outbound tourism growth” over the next decade, though connectivity would be constrained by fewer airports there, the Asian Development Bank (ADB) said in a May report.