Indian Travel And Tourism Industry Returns To Pre-Pandemic Levels After Two Years

The most muted seasons of travel have gone past. After being hit by the pandemic.

The travel and tourism industry is ready to dispel the darkness and finally move on an exponential growth trajectory in the ongoing year. Travel agencies including OTAs and social commerce platforms are seeing strong demand in travel bookings for the next few months, especially to beat the summer heat.

According to the rating agency ICRA, the domestic air passenger traffic for FY 2023 is predicted to reach the pre-pandemic levels seen in FY 2019. In fact, the domestic passenger traffic of 130 lakhs in March 2023 is already 12 per cent higher than the traffic recorded in March 2019, before the pandemic. Despite increased airfare and hotel bookings, the demand for travel bookings is not going to slow down its pace any sooner. In fact, it is emerging from not only popular cities but also smaller towns of Tier 2 and Tier 3 cities.

“The Indian traveller has shown unprecedented zeal through 2022 to make-up for the lost travel opportunities during the pandemic lockdowns. These “revenge travel” urges of 2022 will become the yearly routines in 2023 and beyond, continuing the growth trajectory next year. People’s memory is alive with the recreational and wellness benefits from their 2022 trips, something they are eager to repeat every year to get a reprieve from their hectic and stressful daily routines. We will see demand for nature retreats, wellness tourism and spiritual travel further increase in 2023, driving growth in domestic tourism in India,” says Ashish Sidhra, co-founder of Alike.io.

Summer getaways

Two complete summer seasons went inside homes. In 2022, there was still fear of spreading Covid infections that deterred people from planning a vacation. In 2023, the majority of travel will be around summer as people look for domestic and international destinations to satisfy their appetites. Busy millennials and Gen Zers are exploring destinations and itineraries that require less planning and are affordable.

India is a vast country that offers diverse weather choices and regions, allowing people to enjoy their quick getaways. Destinations like Himachal Pradesh, Uttarakhand, Nainital, Coorg, etc. emerge as popular destinations during summer. These destinations are not only cool retreats but also reflect nature’s beauty within the country. Similarly, international travel is slowly picking up with ease in visa restrictions. Destinations like Vietnam, Dubai, Singapore, etc. are seeing a huge surge in bookings for those who are willing to spend more.

Ankita Sheth, co-founder, StayVista opines, “the Indian travel industry is on the rebound, with domestic tourism witnessing a surge as travelers prioritize leisure and downtime. The industry has seen steady growth of 40% as per Ministry of Tourism, indicating a strong recovery. Multi-generational travel and group travel have become popular with guests seeking privacy and luxury experiences.

This trend reflects in our own bookings, where the average group size of 10+ has seen a growth of roughly 30%. Fully serviced villas with something for everyone have become a favorite choice. More frequent short trips for personal milestones and digital detox getaways may well have replaced long annual holidays. At StayVista, we have witnessed a 40% increase in bookings post-pandemic. The government’s “Dekho Apna Desh” campaign has been instrumental in this growth, inspiring people to explore India’s beauty and diversity.”

Willingness to spend on luxury experiences

With almost all restrictions lifting post the pandemic, Indian travellers no longer want to stay behind exploring luxury experiences. The American Express Travel report states – 90% of millennials plan on investing in more luxe experiences than conventional luxury goods. Against this backdrop, social media influencers play an instrumental role as Indian travellers head to choices inspired by them.

Indian travellers, especially millennials and Gen Zers who are independent and have deep pockets look for plush resorts, private beaches and villas to satisfy their appetite for travel. As they are willing to spend, there is a pent-up demand for business class flights and luxury lounges and suits at five-star hotels.

Surge in international destinations

The peak summer season is around the corner and travel agencies are witnessing a steep surge in demand for long-haul destinations. International destinations like Dubai, Maldives, Europe, Thailand, etc. could see exceptionally higher traffic during the holiday season. As a result, the airfare and hotel packages are going to rise which were already on surge due to geopolitical issues like the Rusia-Ukraine war.

The surge in international destinations is also attributed to the rise of technology and social media where millennials feel more connected and want to share their experiences. They are more likely to explore unique experiences shared by their counterpart travellers and are willing to spend more on exploring exotic locations around the world.

Talking about the statics, Sidhra says “The latest American Express Global Travel Trends report has identified that 77 per cent of Indian respondents are planning to undertake at least three leisure trips this year. Ratings agency ICRA is predicting the domestic air passenger traffic for FY 2023 to almost reach the pre-pandemic levels seen in FY 2019.

In fact, the domestic passenger traffic of 130 lakhs in March 2023 is already 12 per cent higher than the traffic recorded in March 2019, before the pandemic. One of the most important Indian travel trends of 2023 will be the increased influx of foreign tourist guests to India. Foreign arrivals by July 2022 were already at 79% of 2019 levels and will surpass these historical highs next year.

With India taking over the G20 Presidency, recall of brand India will grow many folds in top global source markets, driving increased international guest visits to India. The Government of India is aiming to bank on this trend and has finalised, “Incredible India! Visit India Year 2023”, as its marketing tagline.”

People confined to homes for long increases their eagerness to travel regardless of leisure or travel purpose. With the integration of technology into the travel industry, travellers are more willing to get tailored choices for an exceptional travel experience. As part of the revenge travel backdrop, India is going to witness significant growth in the segment, observing a healthy outflow as well inflow of tourists.