Monday, June 17, 2024

India’s travel market to cross $125bn by 2027

The covid-19 pandemic may have slowed down India’s travel and tourism sector, but a new report expects it to bounce back and cross $125 billion by 2026-27. According to ‘Travel market in India’ by RedCore, research firm RedSeer’s arm, the travel business in pre-pandemic India was $75 billion in FY19-20. This will expand beyond $125 billion by FY2026-27, taking into account both domestic travel, inbound and outbound travel by Indians.

The report said the country’s travel market is dominated by about 300,000 travel agents who represent the largest volumes of business in bookings at about 52 per cent and the role of these agents significantly increased after the pandemic.

In FY 2019-20, a majority of these agent-based bookings came from holiday packages worth $17 billion, flights ($10 billion) and standalone hotel bookings of $5 billion. Cabs and intercity buses and railways contributed the remaining $6 billion.

The report said there are fewer players operating in the curated packages segment and those who do, generally create packages on their own in partnership with tour operators and destination management companies. Agents are expected to add more than $65 billion to the travel market by FY26-27.

“Travel in India is still heavily dependent on agents who people trust but also offer price competitiveness. They represent over half the travel market share and are expected to maintain this share in coming years,” said Anuj Kumar, director, RedCore.

The report said the airline travel market in India was valued at $20 billion (both domestic + international) in FY19-20 and is expected to double by FY26-27. This growth will be driven by improving airport infrastructure and increasing access to passports. For now, 65 per cent of the air travel by value is booked by agents while the rest is through online tour operators or OTAs.

During covid, the uncertainties related to travel including tests, change of travel date, delay in travel due to restrictions motivated travelers to take the agent route for making the ticket booking.

It added that the hotel market size in India including domestic, inbound and outbound was $32 billion in the same year and is set to grow to touch $52 billion in FY26-27.

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