India’s travel landscape is undergoing a transformation, buoyed by the rising demand for travel, both domestically and abroad.
A unique blend of infrastructural improvements, strategic partnerships, and consumer trends underpins the promising outlook for Indian tour operators.
A Rising Demand for Overseas Travel
The Indian tourism industry is witnessing an impressive upward trajectory in overseas travel demand. This year, a staggering 30 million Indians are expected to travel internationally, a figure that surpasses all previous records. The growth is fuelled by multiple factors including improved infrastructure and rising disposable incomes. Initiatives such as visa-free facilities and simplified processes are further propelling this trend.
In 2023, 27.3 million Indian travellers ventured abroad, slightly overtaking the pre-pandemic figure of 26.9 million. This surge indicates a robust recovery and potential for continued growth. Consulting firm McKinsey notes, ‘India’s fast-growing pool of first-time tourists is a significant contributor to this trend.’
Domestic Tour Operators Poised for Growth
The revenue of Indian tour operators is projected to grow by 15-17% in the 2025 fiscal year. This optimistic outlook is supported by increased domestic tourism and a strong inclination towards international travel. Improved last-mile connectivity and shorter, more frequent vacations are emerging trends in the domestic market.
CRISIL, a leading credit ratings agency, highlights several drivers of growth including weekend staycations, spiritual tourism, and enhanced infrastructure. The government’s focus on bolstering domestic tourism through various initiatives also plays a crucial role.
The shift from ‘revenge travel’ post-COVID to ‘regularized’ travel is becoming apparent, with both domestic and international tourists opting for shorter trips. This behavioural change is complemented by the expanding middle class, whose spending power is significantly influencing the travel market.
International Collaborations and Strategic Partnerships
Malaysia’s tourism board is strategically targeting 1 million Indian tourists by the end of 2024. In a bid to achieve this, Malaysia has introduced visa-free entry for Indian passport holders until year-end.
The numbers are already promising, with over 670,000 Indian tourists visiting in 2023, marking a 107% increase from 2022. In April 2024 alone, 295,000 Indians visited Malaysia.
Air India is enhancing its loyalty programme through a partnership with Legoland, rewarding customers with points on purchasing theme park tickets. This initiative aligns with Air India’s strategy to merge with Vistara, aiming to provide improved benefits to its expanding customer base.
Innovations in Airline Services
Budget airline Akasa Air has displayed remarkable growth in its carrying capacity, which increased by 300% in the 2024 fiscal year. The airline plans to boost this figure by an additional 50% for 2025. Currently, Akasa operates over 900 weekly flights, covering 22 domestic and five international destinations.
The forthcoming launch of its Kuwait City operations signifies Akasa’s strategic expansion. Remarkably, the airline has surpassed IndiGo in terms of on-time performance, reflecting its operational efficiency.
Turkish Airlines has also introduced a new initiative for Indian travellers with its complimentary ‘Touristanbul’ service. This service allows passengers to explore Istanbul during layovers, aiming to attract over 350,000 Indian tourists this year.
Technological Advancements in Travel
Zoomcar, a self-drive car sharing platform, has launched a unified app for guests and hosts. This new app replaces the former two-app system, creating convenience by allowing users to manage vehicles and bookings from a single platform.
The enhanced app features real-time car ranking checks and competitive analysis tools, empowering hosts to optimise their offerings.
By unifying hosts and guests into one platform, Zoomcar is streamlining processes and expanding its service range, marking a significant advancement in travel technology.
The future for Indian tour operators is bright, backed by strategic growth in domestic and international travel demand.
Innovations and strategic partnerships continue to drive this thriving sector towards unprecedented success.