Travel sector outlook for 2024 is a mixed bag | Mint
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Business News/ Industry / Travel sector outlook for 2024 is a mixed bag

Travel sector outlook for 2024 is a mixed bag

Industry players are keeping an eye on pricing strategies and the event calendar for the next year, which remains less eventful compared to a bustling 2023

Throughout 2023, the travel industry has witnessed a strong recovery in demand. (Image: Pixabay)Premium
Throughout 2023, the travel industry has witnessed a strong recovery in demand. (Image: Pixabay)

New Delhi: After a robust 2023, travel firms are cautiously optimistic about the next year amid lukewarm demand during India's festive peak season, a period typically marked by high airline traffic.

Travel services platform Thomas Cook told Mint that it anticipates a solid double-digit growth in the coming year, while holds a more reserved outlook, citing the absence of major events to boost demand significantly

As per latest government data, an estimated 125.5 million travellers took to the skies during January-October, an increase of 6% from the same period in the pre-pandemic year of 2019.

“If we look at our forward bookings for the holiday season, we are already up 24% from a year ago especially when we look at domestic and short-haul international destinations. In leisure holiday business during summer holidays for next year, forward bookings are 64% higher than year ago," said Madhavan Menon, executive chairman, Thomas Cook (India).

“As we move closer to holidays these bookings will pick up further, demand is still very strong, people are looking forward to travelling on holidays, I don’t think that trend has changed at all," Menon added.

Throughout 2023, the travel industry has witnessed a strong recovery in demand, but there was a noticeable dip in air travel during the peak travel times of Diwali and Dusshera. High airfares have been cited as a major concern.

Ahead of Diwali which was celebrated on 12 November, around 414,000 and 394,000 passengers flew on 10 November and 11 November, respectively. Yet, post-festival figures, from 18 November, have shown a resurgence, with daily air travellers exceeding 458,000, a 14% increase over the daily averages before the pandemic.

“I think we will close 2023 on a positive note, for 2024 let's wait and watch. This year, there have been many events spread across the year starting with Indian Premier League, G20, festive season combined with World Cup," Santosh Kumar, country manager for India, Sri Lanka, Maldives and Indonesia said.

“I have not heard of too many events for next year. For us, there is cautious optimism in terms of what 2024 holds. How long will people continue to pay (higher prices) is the question that is there on everybody's minds. At the moment we are not seeing that yet, even for next few months, I am not seeing hotels drop prices yet, everybody is kind of in a wait and watch mode to see who kind of bells the cat first," Kumar added.

While expectations for 2024 are varied, travel industry leaders note a shift in Indian travel habits, with younger groups traveling in smaller numbers and less seasonality in travel periods. 

"We have seen that the average age of travellers is now 8-10 years lower than we saw pre-covid. They don’t necessarily travel as a family of 4 or 6, they travel in a group of may be 2-3 people. Also, earlier travel used to seasonal, right now we are not seeing any seasonality in travel periods," Menon said.

Thomas Cook is observing an uptick in European tourists choosing India and other Asian destinations from December to March, potentially due to travelers avoiding regions near the Israel-Hamas conflict zone.

With India's foreign tourist arrivals at 6.19 million in 2022, up from 1.52 million the previous year, there is cautious hope for a return to the pre-pandemic figures of nearly 11 million arrivals. While there is optimism for organic growth, the industry is watching closely to see if these trends will continue into the new year.

“Inbound travel to India remains to be seen whether we will go up to 2019 levels...I would expect organic growth to continue but fingers crossed," Kumar added.

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Published: 24 Nov 2023, 05:35 PM IST
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