Sharp uptick in travel loans, travel credit cards as post-pandemic travel picks up

NEW DELHI: Pent up demand for travel in the post-pandemic scenario has triggered a 10-fold increase in demand for travel loans and a six-time rise in travel credit cards in the last one year, a recent survey of salaried and self-employed persons from across India’s top eight cities has shown.
The sharp rise in travel loans and travel credit cards was driven primarily by zillennials and millennials, aged between 21-26 and 27-40 respectively, and a sizeable chunk of this number – 27% -- came from women.
Conducted between April and June this year by IndiaLends, an online marketplace for loans and credit cards, the survey assessed nearly 28,000 personal loan and credit card customers and found that zillennials accounted for 36% of travel loan applications while 52% queries came from millennials living across Mumbai, New Delhi, Bengaluru, Hyderabad, Pune, Chennai, Jaipur, and Kolkata, with Delhi topping the charts for highest number of travel loan applications.
If the need to travel deepened, so did the depth of planning. The survey noted that the average ticket-size of travel loans reduced from Rs 95,000 in the pre-pandemic period to Rs 75,000 last year, indicating that loan applicants were exercising greater discretion in planning travel expenses.
This was also borne out by how aspiring Indian travellers searched for travel deals, budget offerings, complimentary access to airport lounges, and recently launched brand offers on the internet and social media, as well through the IndiaLends’ mobile application.
The report suggested that 75% of the travel credit cards issued through the platform in 2022 come with complimentary access to airport lounges, and over 30% with travel specific offers. IndiaLends also reported that ‘Travel Offers’ was the second most-searched category after electronics on its mobile application.
“Demand for travel loans and credit cards has crossed the pre-pandemic levels and the trend is expected to continue over the festive period. We have observed a shift in young people’s spending pattern where members believe travel is essential rather than aspirational. The decrease in average ticket-size of travel loans also indicates that youth are planning their finances more smartly,” said Gaurav Chopra, Founder and CEO of IndiaLends.
Interestingly, while the bulk of the respondents to the survey – 77% individuals – claimed that they intended to use the monies for domestic travel, only 23% said they were using the funds to travel abroad. The growth in travel credit cards, interestingly, was fuelled by incentives including “same-cost” EMIs being offered by Online Travel Agencies (OTAs), aside from lounge access and fuel cards.