Putting Travel Back On The Growth Map In 2023
2023 is poised to be a year of reckoning for the travel industry. The current trends indicate a 20% growth this year - this is applicable for all lines of business such as air, hotel, bus, packages, and recreational activities. The growth will be driven on multiple fronts - from supply expansion across all sub-segments within travel, increased choices to explore, increased spending power by customers, and ease of travel purchase via online channels, among others.
The pent-up demand that the industry is witnessing since early 2022 has continued to rise. Irrespective of the 20% spike in both airfares and hotel rates, the demand remains undeterred. Hence, the outlook remains bullish.
Rising Covid-19 numbers in certain other countries have also not dampened customer sentiment.
The sustained preference for leisure travel clearly indicates recovery in the travel and hospitality sector. While outbound travel has picked up steam, there is immense scope to improve inbound travel into the country.
In the air industry, new planes are being introduced, new airports are coming up via the Udaan scheme, and terminal expansions are happening (eg: Bangalore) - these are some of the industry-led drivers for growth. India’s low-cost carrier market is experiencing competition with the launch of new players.
In the hospitality sector, the alternate accommodation segment is growing the fastest. Hotel chains are expanding their number of keys constantly, new age brands and hostels are another fast-growing sub-segment within this industry.
In the bus industry, we are seeing a good uptick in the organized segment (from unorganized). This increases the bus supply pool for customers to book online.
Trends that will drive travel in 2023
Travel as a concept was redefined in 2022. It was not just about stepping out but also indulging in authentic experiences that carried meaning. 2022 saw a spike in demand for less explored destinations, travelling on weekdays for leisure, staycations, extending trips for a longer duration, and wanting an experiential journey.
2023, in our opinion, would pave the way for experiential travel to become mainstream both domestically and internationally. With road infrastructure becoming better, less explored places gaining limelight, alternate accommodations being in the trend, and experiential travel is poised to grow.
As per our research, more than 60% of hotel customers travel outside their state for vacations. We also expect the number of vacations travellers take per year to increase.
Wellness tourism is another strong trend that we feel will continue in 2023.
The uptick in travel demand was significant from the start of the holiday season since September 2022. Outbound tourism to international destinations also recorded a steady increase since April 2022; the trend is likely to continue this year.
Evolving customer preferences
Though the covid fear has reduced significantly, customers are still looking for flexibility in their bookings. Cleartrip’s flexibility product CT FlexMax was an instant hit and has become a customer's default expectation. Thankfully, “peace of mind” can now be purchased for a nominal fee.
Customers are also looking for product offerings that make travel affordable. Offers such as no-cost EMI and buy-now travel later are continuing to see great adoption among customers.
Value innovation and customer-centricity should be at the forefront of everything we do for our customers.
Attractive affordability constructs and value propositions such as an upgrade offered free or at discount to a core product like a flight or hotel, offering last-minute deals, are certain examples of what customers are expecting.
