Travel Demand Bulletin: India’s travel sector looks toward recovery

With news that India eased some restrictions for international travel arrivals from the 14th of February, there are many questions about how the market will respond. Will this spark recovery in the hospitality sector?

Flight options are still limited due to the suspension of regular flight schedules. However, with the help of forward-looking data, hoteliers and revenue teams have a window into the pre-booking sentiment of travellers, giving them time to implement strategies to effectively capture any demand.

The forward-looking data, harvested using OTA Insight’s Market Insight tool, maps flight and hotel search data from around the world to provide a detailed breakdown into the market, where demand is coming from, and what it means for hotels in those markets. As travel restrictions start to lift around the world, business intelligence tools such as Market Insight mean that hoteliers can adjust their strategies as the market begins to recover, while also being alerted to sudden changes in traveller sentiment in time to react.

As we track market demand in India, we can see that while there has been an uptick in search traffic since the announcement of the rule changes for international arrivals, potential travellers are still investigating their travel options, providing hoteliers with a chance to turn these lookers into bookers.

Mumbai

Over the past week, Mumbai has seen an increase in flight searches by 26%, while hotel searches have increased by 25% over the same period. Digging deeper, using the free Global Market Insight tool, we can see that there was an increase in search traffic coinciding with the announcement that quarantine requirements would be removed. 

A full 55% of last week’s flight searches originated in Europe, 46% of which stemmed from the UK. UK flight searches were for an average of 11.1 nights. 38% of the flight searches were for travel dates within the next 8 - 28 days, while 37% of the searches were for travel dates between 29 - 90 days away. 

Other markets looking for flights to Mumbai included USA (7% of searches), Australia (6% of searches) and UAE (6% of searches). The flight search patterns indicate that 57% of the flight searches were for a length of stay between 8 and 14 days, while 27% were for a length of stay between 4 and 7 days. 

Search queries for hotels reveals a different pattern. For example, 71% of searches in the last week are being driven by domestic demand, while 12% originate from the Americas. 35% of those searches were for travel within the next seven days, while 36% were for travel dates in the 8 - 28 day window. 

Of note, there was a 5% increase in hotel searches from the previous week, for travel dates in the next seven days, another indication of the impact of the rule changes. Hotel search data originating from within India indicates that the average length of stay in Mumbai was for an average of 3.2 nights, while the searches stemming from the USA was for an average length of stay of five nights.

Bangalore

In Bangalore there was a 36% increase in flight searches from the previous seven days, 56% of that traffic stemming from Europe. Breaking this down further, 32% of those searches were from the UK, with most searches for an average stay in Bangalore of 10.6 days. 23% of searches came from countries within Asia, and 11% from the Americas, while Oceania made up 9% of the flight searches to Bangalore. Unlike Mumbai, however, the majority of searches were for dates between eight and 90 days ahead. In fact, 40% of these flight searches indicated a lead time of between 29 and 90 days, while 34% were for travel dates within the next month.

Just like Mumbai, hotel searches indicate that the majority of searches are coming from within India. Despite there being a 34% increase in hotel searches to Bangalore, 86% originate from within India, with most searches indicating that customers are interested in staying an average of 3.4 nights. 5% of the remaining searches were from the USA, where prospective customers were looking for dates that averaged a 5.6 night stay. Interestingly though, 40% of hotel searches were for dates within the next seven days, and 37% were for dates within the next 28 days.

Chennai and Hyderabad

Similar trends can be seen in both Chennai and Hyderabad. Flight search patterns indicate an increase of traffic by 27% and 18% respectively from the previous week. 50% of flight search traffic for each of these cities is coming from Europe, with most of it coming from the UK. Australia, USA and UAE are other major international source markets looking for flights to these destinations, with most international searches for an average of an 11.8 night stay. 

Most searches were for dates at least eight days away, but there is higher demand for travel dates at the end of February, in the middle of March and the middle of April, again indicating that customers are still investigating various flight options before booking. 37% of flight searches were for the 8-28 day lead time window, though there was a 5% increase in flight searches to Hyderabad for dates in the 28-90 day window from the previous week.. 

Hotel search patterns deviate from the flight search lead times, as 41% of last week’s hotel searches were for a travel date within the next seven days, up by 6% on the previous week. In Chennai 36% of the hotel searches were for travel within the next seven days, up by 3% from the previous week. In both cities, domestic searches made up the majority of hotel searches - 81% for Hyderabad, and 73% for Chennai - from within India, for an average stay of three nights. 

In both cities, there was an increase in hotel search activity - an 18% increase to Chennai, and an 11% increase for searches to Hyderabad from the previous week. Searches from the USA made up the next biggest source of demand for Chennai and Hyderabad, with 14% coming from there.

Summary

Following the easing of inbound travel restrictions and the lifting of mandatory quarantine for vaccinated travellers, there is a clear uptick in flight searches to India. This indicates travel demand has returned for the Indian market and is increasing quite substantially. While there is a growing number of flight searches from abroad, hotel searches are still dominated by domestic consumers. 

By examining forward looking data from Market Insight and Global Market Insight, you can begin to paint a picture of where demand is coming from, when to expect it, how long they intend to stay and what travellers are looking for. With these insights at your disposal you and your fellow commercial teams can begin to put together an effective pricing, marketing and distribution strategy, ensuring that you capture your fair share of market demand.

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