‘Travel sentiment across India strong but inbound travel still an opportunity'

Kumar, speaking to Mint, pointed out that although there are fewer big-ticket events this year, music concerts and the festive period should maintain hotel and domestic travel momentum. "Aside from the elections, we also had the Indian Premier League earlier in the year. Domestic is in a good space overall. Outbound is too, of course, as every country that wants tourist inflows is looking at the Indian traveller more and more. This is also playing up in a very competitive way with travel providers in India looking to retain the Indian traveller within our shores," he said.

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Domestic, international interest

While the company does not provide booking data, Kumar said an increase in searches for both domestic and international destinations for the festive period. With India being a market of over 50 million tourists, he noted that the country’s Gen Z population is increasingly turning to social media platforms like Instagram rather than Google to search for travel destinations.

Despite these trends, he said that inbound travel has not yet returned to its 2019 levels. "Inbound tourism is definitely an area that we feel that we can continue to do more as a company, and we also think the industry broadly can do more as well," he added. He said that India's last-mile connectivity has significantly improved over the past decade, with the number of airports and highways more than doubling, contributing to better customer experiences.

India, Thailand, and China lag behind pre-pandemic tourist arrival numbers, unlike France and Spain, which have exceeded 2019 levels. Strategic programmes like Vietnam’s Tourism Development Strategy 2030 and Japan’s tourism plan could serve as models for India. In 2024, the US, Hong Kong, and the UK remained the top and potential travel markets into India with new interest from Australia, Italy, and the Netherlands with major cities like New Delhi, Mumbai, and Bengaluru dominating searches.

Also read: Hotels are bustling despite absurd prices. But for how long?

But Kumar suggested that India might not see pre-pandemic levels of international traffic until 2025, due to factors such as the US elections, typically occurring during peak travel season, and economic slowdowns in Europe and the UK. "Our best guess or estimate is that we will land up to around 10 million inbound travellers or so by the end of this calendar year. When you compare it with what the ministry reported in the first half, it could mean a slight growth in the second half of the year. But we may not end up at the 2019 numbers. Most likely we might end up hitting those numbers in 2025," he said.

Peak season, peak rates

The upcoming quarter, October to December, is traditionally a peak period for both domestic and inbound travel into India due to favourable weather and holiday travel. Despite skyrocketing hotel rates, with many operators charging at least 70% more than pre-pandemic levels, demand remains strong. "All the numbers we've seen so far and the data we've seen do not indicate that there is any softening of demand for hotels. Yes, some micro markets are seeing some ups and downs, but overall, the sentiment across India is strong. Consumers are not saying suddenly that, oh, suddenly something is too expensive, therefore I'm not going to spend as much, and I will start staying in a cheaper accommodation. That's not starting to happen yet," Kumar said.

While travellers are paying more for stays, hotels are also encouraging direct bookings over platform reservations. Kumar noted that this shift poses no threat to Booking.com. "Even with an increase in average daily rates of hotels or what a hotel charges for a room per night, it's not really a very big factor for us. If they increase their costs, the commission we charge to book that room also goes up. They still have rooms to fill, and while the revenue per room is up, there is still a massive need for hotels to diversify their channels of distribution, and we fit into that," he said.

Also Read: This holiday season, hotels tour operators are not banking on foreign tourists

Kumar also said that the alternative accommodation segment, including private homes and villas, is still emerging but shows growth potential. 

Global room nights

According to Booking Holdings' earnings, global room nights increased 9% year-over-year by the end of Q2 2024, driven by healthy demand in Europe and Asia. However, global room nights rose only 7% in the quarter, reflecting slower growth in Europe compared to Q1 2024. The company considers India a priority market within the Asia Pacific region.

According to the company's research data in a new report, ‘How India Travels 2024 - The Inbound Edit’, which it made along with consultancy Accenture, hotels are the top accommodation choice (63%), though homestays and villas are growing, showing 300% growth. India's aim to enter the top 10 global destinations hinges on public-private partnerships and visa reforms. Simplifying visa processes, as seen in Thailand and Vietnam, could boost tourism. Improved data reporting and real-time analytics are also crucial for shaping effective tourism policies.