Indian travellers spent $94 billion in 2018, on around two billion domestic and international trips, indicating an unprecedented growth in the tour and travel sector, says a report, ‘How does India travel,’ jointly released by Bain & Company and Google India on Tuesday.
The growth momentum is expected to continue and the industry will grow at a 13% CAGR to $136 billion by 2021, predicts the study.
The report outlines how India spends on travel, the influence of online channels in their purchase journey and potential growth opportunities for travel businesses till 2021.
Deep diving into the $136 billion expected spends, the report cites a 12% growth in transportation ($50 billion), 13% growth in lodging ($21 billion) and consumption, which includes spends on shopping, recreation and food, to grow at 13% ($65 billion) over the next three years.
The report estimates that Indian travellers will spend an additional $24 billion on online travel bookings over the next three years, a growth from 25% in 2018 to 35% in 2021.
Vikas Agnihotri, country director — sales, Google India, said, “New users perceive that online channels are geared towards frequent flyers and experience-oriented travellers; and existing travellers research online but the lack of trust in payments and booking experience make them end up booking offline.‘’
“There is a perception amongst consumers that online channels are geared towards premium customers, along with a marked distrust around payment and pricing terms,’’added Arpan Sheth, partner Bain & Company.
Elucidating the planning journey of Indian travellers, both for business and leisure, the report calls out five phases of a customer journey — Interest, Research, Booking, Experience and Sharing. During key research-heavy phase of interest, digital plays a pivotal role with over 86% of consumers being influenced by online channels, as per the report.