India’s economic boom fuels record Schengen visa applications despite delays, ET TravelWorld

According to a recent European Commission’s report, there has been a significant surge in Schengen visa applications from India, with close to 9.7 lakh Indians applying in 2023, marking almost 44 per cent increase from the previous year. This rise reflects India’s growing per capita disposable income which grew 8 per cent in FY24 and 13.3 per cent in the last year. India’s per capita disposable income is projected to reach INR 2.14 lakh in 2023-24.

Despite this surge, India maintained its third position in Schengen visa applications only after China and Turkiye who hold the top two spots. Overall, Schengen visa applications globally surpassed 10.3 million in 2023, marking a 37 per cent increase from 2022.

On the hindsight, India’s GDP registered a growth of 8.4 per cent in the third quarter of FY24, according to the estimates of the ‘Statistics Ministry’ underlining the country’s economic growth. These figures highlight the increased propensity of Indians to travel to Europe.

However, the surge has overwhelmed consulates with concerning issues of insufficient available visa interview slots and causing disruptions to the travel plans of numerous Indian travellers. It has also stalled the system by causing notable delays in visa processing.

For instance, appointments for Germany and Italy are only available in July 2024. These delays are causing a ripple effect beyond inconvenience. Nonetheless, many travellers face frustrations due to processing delays, prompting some to consider alternative destinations in the Southeast Asia and nearby regions, which offer visa-on-arrival or visa waiver options.

Cost surge changes in alternative options
If we take an estimate, the total cost of a European vacation for a family of four to Germany can easily exceed INR 11 lakh, including airfare approx. INR 4.6 lakh, mid-range hotels approx. INR 2.45 lakh for a week and food, sightseeing, shopping approx. INR 3 lakh plus. These high costs coupled with visa hassles are making alternative destinations with simpler visa processes more attractive. On one hand, where Schengen visa approvals are getting delayed 62 Countries offering visa-free travel for Indians offer a great alternative.

Travel agencies reported an increase in inquiries for alternative summer destinations particularly Southeast Asia known for its visa-on-arrival options for Indian citizens. This trend is likely fuelled by the increasing number of countries offering visa-free entry to Indians. According to MakeMyTrip’s top 10 international search and booking trends Phuket, Singapore, Bali, Bangkok and Kuala Lumpur are leading the way. Also, Thailand and Vietnam with their rich cultural experiences and lower travel costs, could be major beneficiaries of this shift.

New rules old problems
New Schengen visa rules effective from April 18, 2024, aim to facilitate easier access to multi-year visas for frequent Indian travellers. These rules allow for long-term, multi-entry visas initially for two years and extendable up to five years, benefiting from stronger EU-India relations. Despite these enhancements challenges remain due to the high volume of applications and the impact of geopolitical factors, such as the Ukraine war affecting Russian applications.

According to many reports, travel agents and applicants alike face issues with VFS Global, the primary visa processing agency due to its overloaded capacity.

Lost Euros new opportunities
Looking at pre-pandemic data, the World Travel & Tourism Council (WTTC) reported that Travel & Tourism contributed 9.2 per cent of the GDP and 10.3 per cent of total employment in the Schengen Area in 2019.

Delays that discourage travel could have a significant negative impact on these figures. Non-Schengen European countries like Albania, Croatia and North Macedonia could see a rise in bookings, capturing a portion of the lucrative Indian tourist market. Europe’s visa woes could be Southeast Asia’s windfall. The region’s tourism industry could witness a significant boost.

Travel businesses adapt or lose out
The ‘European Centre for Tourism Research’ found that tourists applying for Schengen Visas in the first quarter of 2024 experienced delays exceeding weeks, leading to disrupted travel plans and cancellations. Which creates an opportunity for alternative destinations with simpler Visa processes to attract tourists and generate revenue. B2B travel businesses can adapt by offering innovative tour packages to these emerging markets.

Such as highlighting visa friendly alternatives, offer package of multi-regional tours, partner with local operators and targeted marketing campaigns. By capitalising on this opportunity B2B travel businesses can boost sales and expand their market reach.