The travel industry has experienced significant headwinds in 2020. Governments globally have been forced to impose travel restrictions to contain the spread of the pandemic. These restrictions have inflicted collateral damage on the travel industry.
In India, the government reopened the skies for domestic travel in May-end, and since then there has been a steady increase in bookings. The easing of restrictions in September and the onset of the festive seasons have served as catalysts. While bookings are still 40-50 per cent of pre-Covid levels, there has been acceleration in bookings this quarter. From August to October, the booking have nearly doubled, indicating the return of customer confidence in travel.
This evolution of the marketplace is in line with what was anticipated — that is, travel would revive with customers initially travelling for emergency purposes. We expected emergency travel to transition to intra-State travel with a preference for stay-cations and drive-cations. The third phase would be inter-State travel and, finally, international travel will see a comeback.
We have seen this phased approach play out in many global markets, and India has been no exception to this. India has moved past the second phase and is into the third phase. For example, resorts in and around Bengaluru and Mumbai were reporting high occupancies since July/August. Leisure destinations such as Goa are also climbing up the list of top destinations.
While the revival of international travel will take some more time, some green shoots are visible here too, as evidenced by interest in destinations such as Mahe and Dubai during Diwali.
Mood still cautious
Though confidence has started returning, the mood is still cautious compared to last year. Customers still prefer to book closer to the dates of travel. One-way trips still account for around 70 per cent of the travel and are much higher than pre-Covid levels. Advance booking fares during Christmas to destinations such as Goa are 20-25 per cent lower than last year.
Similar trends were visible for Dussehra and Diwali, where advance booking fares were lower but went up as these festivals approached. For Diwali, top routes are dominated by sectors from major business centres such as Mumbai, Delhi, Bengaluru to destinations in the north and east such as Patna, Lucknow and Varanasi. These route trends indicate that customers prefer to spend time with their loved ones in this festive season.
One marked change observed in customer behaviour this year has been the shift towards safety and flexibility in travel plans. These needs have assumed equal importance to pricing. Leading market participants have come out with offerings that can help customers travel safely and incorporate flexibility in their travel plans. Customers are willing to pay a premium for safety and flexibility.
Market participants who can address these needs and position themselves appropriately will stand to capture a disproportionate share of the market. This is visible in hotel bookings where customers to leisure destinations such as Goa, Udaipur, Jaipur, Shimla, Manali, Lonavala, and Coorg have preferred luxury hotels which have undertaken visible steps to enhance safety levels.
An encouraging sign throughout this year has been the steady traffic numbers on online platforms. These stable numbers indicate that travel is an intrinsic and essential part of our lives, and all of us have varying degrees of wanderlust in us. The pandemic has only postponed fulfilling this basic human need, and there is a lot of pent-up demand that will eventually return to the market. Some of it may even spill over to the next quarter as confidence builds in the customers’ eyes.
The revival is not necessarily travelling for revenge or any other form of vendetta. It goes beyond that. Travel is an outlet for rejuvenation and relaxation and sharing moments of joy and experiences with near and dear ones.
Most people cherish their travel memories lifelong, and it is an integral part of how we live our lives. Indeed it is essential to defining ourselves as humans.
The upsurge we will see in travel in this festive season and moving forward is simply a reflection of us rightly reclaiming a fundamental part of our lives.
The writer is Head of Corporate Strategy at Cleartrip