Travel in India

Euromonitor International
September 2019
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LIST OF CONTENTS AND TABLES

Executive Summary ..................................................................................................................... 1
Evolving Demand Trends Reinforce Market’s Strong Domestic Focus..................................... 1
Direct Sales Represent A Growing Threat To Intermediaries ................................................... 1
Expanding Range of Accommodation....................................................................................... 1
Amazon Re-enters Travel With Domestic Flights in India ......................................................... 2
Millennials To Play A Key Role in Driving and Shaping Travel ................................................. 2
SWOT........................................................................................................................................... 2
Summary 1 Destination India: SWOT .............................................................................. 2
Market Data .................................................................................................................................. 4
Table 1 Annual Leave: Volume 2014-2019 ............................................................... 4
Table 2 Travellers by Age: Number of People 2014-2019 ........................................ 4
Table 3 Seasonality: Number of People 2014-2019 .................................................. 4
Table 4 Leisure Outbound Demographics: Number of Trips 2014-2019 ................... 4
Table 5 Other Transport Sales: Value 2014-2019 ..................................................... 5
Table 6 Other Transport Online Sales: Value 2014-2019 ......................................... 5
Table 7 Forecast Other Transport Sales: Value 2019-2024 ...................................... 5
Table 8 Forecast Other Transport Online Sales: Value 2019-2024........................... 6
Table 9 Activities: Value 2014-2019 .......................................................................... 6
Table 10 Forecast Activities: Value 2019-2024 ........................................................... 6
Sources ........................................................................................................................................ 7
Summary 2 Research Sources ........................................................................................ 7

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TRAVEL IN INDIA
EXECUTIVE SUMMARY

Evolving Demand Trends Reinforce Market’s Strong Domestic Focus

The Indian travel market remains largely focused on domestic trips. While the young urban
middle class is expanding, this is largely serving to reinforce the importance of internal travel as
time-starved millennials display a growing interest in weekend breaks and short trips with an
emphasis on experience. This trend is being supported by India’s diverse range of cultural,
historic, biological and geographical attractions, which are themselves strongly promoted by
national and state tourism policies. The trend towards short trips amongst younger consumers is
also contributing to diversification in lodging, boosting the expansion of short term rentals and
encouraging the development of other accommodation, such as hostels. The relatively short
distances being travelled by many consumers is also spurring demand in car rental. However,
the expansion of travel in India, both in terms of domestic consumers and travellers from
overseas, is still constrained by infrastructural issues relating to transportation, accommodation
and amenities.

Direct Sales Represent A Growing Threat To Intermediaries

Wider broadband and smartphone coverage are creating conditions for the ongoing
digitalisation of the Indian travel market. Travel intermediaries are expected to see online sales
exceed those of offline sales for the first time during the forecast period. However, digitalisation
is also facilitating the efforts of airlines and hotels to bypass intermediaries and generate direct
sales. In order to encourage consumers to book directly from their platforms, airlines and hotel
operators are increasingly promoting their loyalty programmes, such as Jet Airways’ JetPrivilege
and ITC Hotels’ Loyalty and Recognition Programs. They also offer discounted prices for direct
bookings, as well as other benefits. In the price-conscious Indian market, such moves represent
a notable threat to the ongoing development of travel intermediaries. However, intermediaries
have the opportunity to target the strong consumer demand for convenience by providing an
integrated offer across a wide range of travel requirements, spanning transportation,
accommodation, consumer foodservice and entertainment. Moreover, they can appeal to price-
conscious consumers by offering the opportunity for easy price comparisons across a range of
travel operators.

Expanding Range of Accommodation

While India remains a largely hotel-focused market, short term rentals, such as homestays,
are increasingly gaining traction. The accommodation listings of Airbnb are growing rapidly, as
consumers increasingly look for novel experiences at an affordable price. The increasing
interest in making short domestic trips for leisure amongst Indian millennials - who do not have
the time for longer, international trips - and the country’s appeal to budget travellers from abroad
are supporting this trend. In addition, these factors are also boosting the development of
unrated, budget and mid-market hotels, and other forms of accommodation, such as hostels.
Meanwhile, the ongoing expansion of OYO Rooms is promoting standardisation in the budget
hotels segment. While consumers are increasingly looking for distinctive experiences, this
process of standardisation is important in bolstering confidence in the quality, hygiene and
safety of accommodation.

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Amazon Re-enters Travel With Domestic Flights in India

Amazon’s commencement of offering domestic flights in the Indian market in 2019 is a low-
key but potentially extremely significant development in travel, in terms of both the Indian and
global markets. Powered by Mumbai-based online travel company, Cleartrip, Amazon began
offering Indian domestic flights by airlines including Vistara UK, GoAir, SpiceJet and IndiGo,
while offering cashback on bookings over a certain price. In the early part of the review period,
Amazon had attempted to venture into hotels, but withdrew from the segment in 2015, around a
year after entry, as it failed to achieve its expected results. However, flights are more
commodified than hotels, especially in the Indian market, which is dominated by low cost
carriers. Consequently, flights are more compatible with Amazon’s business model and look like
a more sensible route for the company to take in entering the travel market. However, acquiring
an established travel company may have entailed fewer challenges, though potentially greater
risks.

Millennials To Play A Key Role in Driving and Shaping Travel

India is expected to see significant growth across most travel categories during the forecast
period. Strong growth in domestic trips will be driven by millennials. This demographic is seeing
a rise in disposable income and displaying a shift from an emphasis on material possession to
experience. However, millennials’ busy modern lifestyles often preclude taking time off for long
holidays in faraway places, and they are increasingly looking to take shorter trips, such as
weekend breaks, in relatively nearby locations. This trend, along with the growing demand for
novel experiences amongst younger consumers, is set to drive ongoing growth in areas such as
short term rental lodging, car rental, and domestic flights. Moreover, the increasing importance
of this tech savvy consumer group is providing a considerable boost to the development of
online travel sales, both through intermediaries and directly from airlines and hotel operators.
The appetite for domestic travel will be whetted by the marketing activity of national and state
tourism boards, which will also play a part in enhancing India’s popularity as a destination for
international travellers by promoting the country’s long history, cultural heritage, diverse
geography and wealth of fauna and flora. However, infrastructural issues relating to
transportation, accommodation and amenities remain an obstacle in the development of the
Indian travel market.

SWOT
▪ India is one of the most popular destinations in the subcontinent, with different kinds of
tourism on offer, such as culture, heritage, photography, wildlife and adventure tourism. There
is a diversity of attractions, including a high density of sights within easy reach, events,
different cultures and living traditions.
▪ The largest weakness of Indian tourism is a lack of adequate infrastructure in terms of basic
amenities, such as roads, water, electricity and the internet, which will continue to have a
detrimental effect on the growth of inbound tourism in the country. However, the government
is working to improve basic infrastructure in order to promote inbound tourism in the country.
▪ Digitalisation facilitates new tourism products, processes and business models. Many tourism
providers will find it challenging to keep up with technological changes, due to the increasing
complexity of the digitalisation process and the fragmented nature of the Indian tourism
industry. Thus, increasing innovative strength within individual enterprises and cooperating at
regional and national levels are gaining importance for the tourism industry in India.

Summary 1 Destination India: SWOT

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Strengths A large variety of tourist attractions including

cultural heritage, historical sites, wildlife and
adventure tourism. The country also offers a
diverse geographical landscape, from the ice-
capped mountains in the Himalayas to the
palm-lined beaches of Kerala in the South

A young tech-savvy population who are open

to new experiences are driving growth in
online transactions in sectors such as car
rentals, flights and packaged holidays

Weaknesses Poor tourism infrastructure in the

transportation and accommodation sectors,
especially in smaller towns, is restricting
growth in travel

Lack of properly trained personnel and skill

shortages across the tourism sector,
especially in many hotels and restaurants

Opportunities While Indian consumers are generally

considered price-sensitive, the middle and
upper middle class can pay a premium for a
good experience during a holiday. OYO
Rooms is a good example, with the company
focusing on hotel renovations and improved
service quality. Recently launched OYO
townhouses are seeing higher occupancy
rates, even though the prices are higher than
those of OYO rooms

Expansion of plans such as payment on

checkout on hotel bookings can enhance
consumer trust and increase bookings on OTA
platforms

The primary attribute of the country as a

tourist destination is the presence of different
cultures, cuisines, languages and
geographical terrains as one travels from the
north to the south, or from the east to the west

Threats Though the security situation has improved in

recent years, terrorism remains a threat,
especially for inbound travellers

Competition from other popular regional

tourism destinations such as Sri Lanka,
Maldives and Thailand

Source: Euromonitor International

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MARKET DATA
Table 1 Annual Leave: Volume 2014-2019

days
2014 2015 2016 2017 2018 2019

Paid Holiday 18.0 18.0 18.0 18.0 20.0 20.0

Public Holidays 17.0 17.0 15.0 15.0 15.0 15.0
Annual Leave 35.0 35.0 33.0 33.0 35.0 35.0
Source: Euromonitor International from official statistics
Note: Refers to country residents

Table 2 Travellers by Age: Number of People 2014-2019

'000 persons
2014 2015 2016 2017 2018 2019

0-14 5,373.4 5,471.7 5,591.0 726.4 904.4 1,080.8

15-24 16,393.4 16,809.1 17,302.4 17,641.3 17,977.6 18,069.4
25-34 28,150.0 29,664.4 31,290.4 31,879.6 32,411.7 32,695.1
35-49 37,906.8 39,111.8 40,537.4 41,437.5 42,619.8 43,567.8
50-64 31,370.0 31,771.2 32,308.6 32,946.4 33,433.4 33,981.7
Over 65 9,783.0 10,020.5 10,232.1 10,530.8 10,901.5 11,369.2
Total 128,976.6 132,848.7 137,261.9 135,161.9 138,248.4 140,764.1
Source: Euromonitor International from official statistics, trade associations, trade press, trade interviews
Note: Refers to country residents

Table 3 Seasonality: Number of People 2014-2019

'000 persons
2014 2015 2016 2017 2018 2019

January 12,059.3 12,487.8 12,765.4 12,434.9 12,649.7 12,809.5

February 12,381.8 12,753.5 13,314.4 13,110.7 13,479.2 13,794.9
March 11,478.9 11,823.5 12,079.1 11,894.2 12,096.7 12,246.5
April 7,738.6 7,705.2 7,961.2 7,704.2 7,880.2 7,953.2
May 8,383.5 8,635.2 8,784.8 8,650.4 8,847.9 8,938.5
June 9,931.2 10,229.4 10,569.2 10,542.6 10,852.5 11,120.4
July 9,415.3 9,698.0 10,020.1 9,866.8 10,092.1 10,275.8
August 9,673.2 9,830.8 10,157.4 10,002.0 10,230.4 10,416.5
September 9,415.3 9,698.0 10,157.4 10,137.1 10,299.5 10,416.5
October 12,381.8 13,019.2 13,588.9 13,516.2 13,824.8 14,217.2
November 13,091.1 13,550.6 14,069.3 13,921.7 13,990.9 14,076.4
December 13,026.6 13,417.7 13,794.8 13,381.0 14,004.4 14,498.7
Total 128,976.6 132,848.7 137,261.9 135,161.9 138,248.4 140,764.1
Source: Euromonitor International from official statistics, trade associations, trade press, trade interviews
Note: Refers to country residents

Table 4 Leisure Outbound Demographics: Number of Trips 2014-2019

'000 trips

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2014 2015 2016 2017 2018 2019

Couples 2,473.1 2,743.7 2,996.2 3,278.5 3,603.9 3,918.7

Families 2,973.2 3,313.2 3,631.7 3,964.1 4,346.7 4,714.4
Groups 379.8 445.2 499.4 561.0 625.9 690.6
Singles 1,296.7 1,573.8 1,759.1 1,969.6 2,214.6 2,462.3
Other 2,139.6 2,277.8 2,462.8 2,692.6 2,964.3 3,228.0
Total 9,262.4 10,353.6 11,349.1 12,465.8 13,755.5 15,014.1
Source: UNWTO, Euromonitor International from official statistics, trade associations, trade press, company
research, trade interviews, trade sources

Table 5 Other Transport Sales: Value 2014-2019

INR bn
2014 2015 2016 2017 2018 2019

Bus 411.3 446.3 455.6 477.6 489.7 505.7

Cruise 4.5 4.9 4.9 5.0 5.1 5.2
Ferry - - - - - -
Rail 283.6 310.5 327.7 341.6 356.7 373.3
Other Transport Types - - - - - -
Other Transport Offline 561.0 599.3 609.8 627.2 632.2 638.3
Other Transport Online 138.5 162.4 178.4 197.0 219.2 245.8
Other Transport 699.4 761.6 788.2 824.2 851.5 884.2
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
Note: Other transport is the sum of cruise, bus, ferry, rail and other transport types or the sum of online and
offline sales

Table 6 Other Transport Online Sales: Value 2014-2019

INR bn
2014 2015 2016 2017 2018 2019

Other Transport Direct 5.6 7.2 8.4 9.5 10.7 11.9

Other Transport 132.8 155.1 170.0 187.5 208.5 233.9
Intermediaries
Other Transport Online 138.5 162.4 178.4 197.0 219.2 245.8
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources

Table 7 Forecast Other Transport Sales: Value 2019-2024

INR bn
2019 2020 2021 2022 2023 2024

Bus 505.7 496.3 483.7 471.5 458.0 445.4

Cruise 5.2 5.0 4.9 4.7 4.6 4.5
Ferry - - - - - -
Rail 373.3 371.2 367.5 362.3 356.0 348.1
Other Transport Types - - - - - -
Other Transport Offline 638.3 615.5 591.9 568.0 544.9 522.1
Other Transport Online 245.8 256.9 264.2 270.6 273.7 275.8
Other Transport 884.2 872.5 856.1 838.6 818.6 798.0

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Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
Note: Other transport is the sum of cruise, bus, ferry, rail and other transport types or the sum of online and
offline sales

Table 8 Forecast Other Transport Online Sales: Value 2019-2024

INR bn
2019 2020 2021 2022 2023 2024

Other Transport Direct 11.9 12.6 13.1 13.6 13.9 14.2

Other Transport 233.9 244.4 251.1 257.0 259.8 261.6
Intermediaries
Other Transport Online 245.8 256.9 264.2 270.6 273.7 275.8
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources

Table 9 Activities: Value 2014-2019

INR million
2014 2015 2016 2017 2018 2019

Attractions and 6,095.0 6,656.8 7,232.3 7,902.7 8,622.0 9,380.7

Experiences
- Culture, Heritage and 3,935.9 4,357.9 4,834.1 5,369.0 5,919.5 6,511.7
Museums
- Casinos - - - - - -
- National Parks 496.5 527.3 556.4 590.6 628.5 664.3
- Theme Parks 1,047.1 1,096.4 1,151.2 1,227.2 1,322.2 1,412.1
- Other Attractions and 615.5 675.2 690.7 715.9 751.8 792.6
Experiences
- Attractions and 6,095.0 6,656.8 7,232.3 7,800.0 8,509.9 9,258.8
Experiences Offline
- Attractions and - - - 102.7 112.1 121.9
Experiences Online
Medical Tourism 23,018.5 26,241.1 30,261.7 36,180.1 43,589.5 52,092.4
Shopping by 200,728.5 225,100.7 255,864.6 287,510.9 309,877.0 343,936.1
International Tourists
Spas 28,831.3 32,002.7 33,186.8 36,574.7 40,230.7 45,285.3
Activities (Destination) 258,673.3 290,001.3 326,545.5 368,168.3 402,319.3 450,694.5
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
Note: Attractions and experiences is the sum of culture, heritage and museums, casinos, national parks,
theme parks and other attractions or the sum of online and offline sales

Table 10 Forecast Activities: Value 2019-2024

INR million
2019 2020 2021 2022 2023 2024

Attractions and 9,380.7 9,723.9 10,037.7 10,341.8 10,628.5 10,895.5

Experiences
- Culture, Heritage and 6,511.7 6,820.8 7,110.3 7,394.1 7,665.9 7,924.1
Museums
- Casinos - - - - - -
- National Parks 664.3 669.9 673.1 674.8 674.9 672.9

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- Theme Parks 1,412.1 1,436.8 1,456.7 1,474.9 1,490.5 1,503.3

- Other Attractions and 792.6 796.4 797.6 798.0 797.2 795.2
Experiences
- Attractions and 9,258.8 9,587.7 9,897.1 10,186.7 10,458.4 10,699.3
Experiences Offline
- Attractions and 121.9 136.1 140.5 155.1 170.1 196.1
Experiences Online
Medical Tourism 52,092.4 59,230.6 66,838.6 75,213.6 84,122.1 93,513.6
Shopping by 343,936.1 363,994.5 382,342.8 398,447.1 439,725.1 437,441.0
International Tourists
Spas 45,285.3 48,110.1 50,684.1 52,818.9 54,945.3 56,866.8
Activities (Destination) 450,694.5 481,059.0 509,903.2 536,821.4 589,421.0 598,716.8
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
Note: Attractions and experiences is the sum of culture, heritage and museums, casinos, national parks,
theme parks and other attractions or the sum of online and offline sales

SOURCES
Sources used during the research included the following:

Summary 2 Research Sources

Official Sources Bureau of Immigration

Central Statistical Organisation

Department of Tourism

Directorate gen Civil Aviation -DGCA

Indian Chambers of commerce

Ministry of Civil Aviation & Tourism

Ministry of Culture & Tourism

Ministry of Finance

Ministry of Road Transport

Ministry of Tourism

Ministry of Tourism & Culture

Seema Luthra

Tourism DNA

Wanderers Travel Retail, The

Trade Associations Association of Domestic Tour Operators of

India (ADTOI)

Car Rental in India

Federation of Hotels & restaurants associaiton

of India (FHRAI)

Hotels Association of India

Indian Association of Tour Operators (IATO)

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Pacific Asia Travel Association (PATA)

Society of Indian Automobile Manufacturers

Trade Press Business Standard

Economic Times

Hindustan Times

Sphere Travelmedia

The Hindu

Times of India

Source: Euromonitor International

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