Schengen rejection cost Indians ₹136 cr as outbound travel hits record 3 cr

Outbound travel surpasses pre-Covid levels; 3.08 crore Indians flew abroad in 2024

Over 3.08 crore Indians travelled abroad in 2024. Nearly 27% financed their trips with personal loans. Schengen visa rejections alone wiped out ₹136 crore in application fees. And now, India’s travel insurance market is racing toward a $4.17-billion valuation by 2031, shows data analysed by ICICI Lombard and Hansa Research. 

 

Bernstein projections cited in the report estimate that India will become the world’s fifth-largest outbound travel market by 2027, rising from 10th place in 2019. This surge is being powered by rising incomes, digital bookings, flexible financing, visa relaxations and a decisive generational shift in how Indians view travel—not as a luxury, but as a lifestyle essential.

 

Travel is no longer paid for in cash—it is being financed

 

• 27% of personal loan borrowers in H1 2025 used loans specifically for travel, up from 21% in 2023
• 71% of these borrowers came from Tier-2 and Tier-3 cities

 

The financialisation of travel is one of the most striking wealth signals in the report. According to Paisabazaar data quoted in WanderSafe, 27% of personal loan borrowers in H1 2025 used loans specifically for travel, up from 21% in 2023. Even more telling: 71% of these travel-linked borrowers came from Tier-2 and Tier-3 cities, showing that global travel is no longer a metro privilege. 

 

A parallel global report cited in the study shows that 74% of Indian consumers now prefer spending on travel over buying luxury products, indicating a reshaping of consumption priorities. Travel has effectively become a status product.

 

India’s per-capita income has grown at a 8.7% CAGR since 2015, directly feeding this experience-led spending cycle that now spans flights, global hotels, cruise vacations, adventure tourism and cross-border wellness retreats.

 

Where Indians are going—and why risk is rising with mobility

 

Asia continues to dominate Indian outbound flows:   Asia draws 63% of Indian travellers; Thailand 21%, Japan 19%, Singapore 15%

 

• 63% of Indians choose Asian destinations
• Thailand (21%), Japan (19%) and Singapore (15%) lead
• The US is the most visited individual country
• France and the UK dominate Europe

 

But rising mobility is also colliding with rising risk.

 

The report highlights multiple stress points:

 

• Climate disruptions across Europe and Southeast Asia
• Ongoing geopolitical tensions including Russia–Ukraine and West Asia
• Aviation anxiety following major crashes
• And a sharp economic loss from visa rejections

 

In 2024 alone, 1.65 lakh Schengen visas were rejected, resulting in a direct financial loss of ₹136 crore in visa fees—with no refund protection for applicants.

 

Indians Are Travelling More – Asia Leads the Way

63% of Indian outbound travellers preferred Asia as their top destination, with Thailand, Japan, and Singapore leading the choice due to easier visa processes and strong air connectivity.

 

Nearly half of Indian travellers (48%) indicated that Asia would be their destination for their next international trip.

 

North America, particularly the USA, emerged as the second-most preferred region, reflecting growing interest in long-haul travel.

 

Younger Travellers Are Exploring Farther

Gen Z and Millennials show a stronger preference for long-haul destinations like Australia and Europe/UK, in contrast to Gen X, who largely prefer nearby destinations.  Australia is emerging as a rising favourite, especially among Gen Y travellers, with 48% planning trips, outpacing Gen X.

 

Travel Preferences Are Evolving

A majority of travellers (64%) prefer to travel with spouses, partners, or friends,

 Gen Z is redefining norms: they are 3x more likely to travel solo and 4x more likely to travel with colleagues, blending work and leisure (bleisure travel).

 

Trips Are Becoming More Purposeful

 Almost two-thirds of Indian travellers (64%) prefer international trips lasting up to two weeks, while families with children opting for longer getaways.

 

Experience-first travel is booming: adventure sports, multi-country trips, water sports, and cultural exploration are increasingly popular.

 

Gen Z leads the adventure trend: 62% plan to engage in adventure sports on their next trip, and 50% are likely to rent vehicles, demonstrating a preference for flexibility and self-curated experiences.

 

Planning Is Digital, But Challenges Persist

60% of travellers book independently or through Online Travel Agency (OTAs), reflecting growing digital confidence.

 

Nevertheless, 30% still rely on travel agents, especially for convenience, guided experiences, or complex itineraries.

 

Gen X travellers are 2.6x more likely to rely on others—often their children—to plan and book trips, highlighting generational differences in digital adoption.

 

41% of travellers reported challenges related to visas, logistics, and clarity of insurance coverage

 

Travel Insurance Awareness Is Rising, but Gaps Remain

•  Overall awareness of travel insurance is high (88%), but detailed understanding and purchase intent lag.
• Among travellers with low purchase intent, 49% cited lack of awareness, 34% cited cost concerns, and 21% felt it was not beneficial, with others citing difficulty in policy purchase.
• Post-pandemic, 64% of travellers actively search for travel insurance, up from 54% in pre-pandemic years, reflecting growing recognition of the importance of protection.
• 76% travellers now buy insurance early—up from 24% last year: WanderSafe 2025

 

Travellers associate insurance with key protections: accidental death, hospitalization, flight cancellations, baggage loss, and coverage for adventure activities.

 

Top claims include medical expenses, trip cancellations, delays, baggage loss, and loss of ravel documents, with common claim rejections due to policy exclusions, deductibles, or unmet conditions.

 

Women, especially solo travellers, are emerging as one of the fastest-growing and most insurance-conscious user segments, prioritising:

 

• Medical coverage
• Trip cancellation
• Passport and document protection

 

What Indians are actually claiming for

 

Claims data now mirrors real-world risk rather than theoretical protection. The top claims categories are:

 

• Medical and outpatient treatment
• Trip cancellations, delays and missed connections
• Baggage loss
• Passport and document loss

 

However, the report also flags persistent pain points:

 

• Technical claim rejections
• Slow settlements
• Poor understanding of exclusions among first-time travellers

 

These friction points are now shaping the next innovation phase in insurtech.

 

The market opportunity: A ₹35,000-crore runway is opening up

 

• The business opportunity around travel insurance is no longer niche.
• India’s travel insurance market is valued at $1.73 billion in 2025
• It is projected to reach $4.17 billion by 2031. That implies a CAGR of nearly 16%