India’s domestic travel market to be US$48 billion by 2020, notes study

29 Jun,2017

By A Correspondent


Google India, along with Boston Consulting Group (BCG), has released a comprehensive report on the growth opportunities in the Indian hospitality market over the next four years. The report titled, ‘Demystifying the Indian Online Traveler’ charts the decision making journey of the Indian traveler and provides insights on the potential growth opportunities for travel businesses till 2020.


As per the report, Indian travel market is projected to grow at 11-11.5% to $48 billion by 2020 with the biggest contributor, air travel expected to grow at 15 per cent to $30 billion. Hotels will grow at 13 per cent to $13 billion by 2020 while railways will remain largely stagnant at $5 billion. Additionally, as more people come online, smartphone penetration improves and use of digital payments goes up, the report estimates that India’s online hotel market will grow to US$4 billion with 31 per cent penetration at a CAGR of 25 per cent.


Speaking about the key findings of the report, Vikas Agnihotri, Industry Director, Google India said; “India’s domestic travel market is on an acceleration path. One of the key findings of the report is that by 2020, one in three hotel rooms will be booked online – a clear indicator of  the growing importance of digital in travel research, planning and booking. There are several actionable insights for domestic online travel players including the role of mobile and the level of curation and personalization that Indian travelers are looking for.”


Demystifying the travel planning journey of the typical Indian consumer, the report shows that for a majority of Indian consumers a vacation is a well thought through event, the planning for which starts several weeks in advance. On average, travel consumers spend 49 minutes spread over 46 days, visiting as many as 17 different online touchpoints to plan, research and make a booking. However, it is interesting to note that the length of each online session is less than 3 minutes, due to the ubiquity of mobile. Through their journey, Indian travelers tend to flip back and forth across different online destinations, checking availability and comparing prices across different providers and connectivity.


Talking about the opportunities for the online travel players, Abheek Singhi, Senior Partner and Asia Pacific Head of Consumer Practice, BCG said, “Travel is a high investment – both monetary and emotional – category. Technology has led to democratization of travel through better information and price discovery – and shall lead to 11-11.5% growth in years ahead. The question is “ how to address the 17 different touchpoints of three minutes each over 49 days!”


Highlighting the purchase drivers, the report finds that there are several touch points in the consumer journey, including OTA (64 per cent reach), search engines (33 per cent reach) and Maps (26 per cent reach). Advocacy and word of mouth form an important input into the travel booking journey with 76 per cent of people gaining inspiration to travel from family and friends. Further, reviews and ratings from other users is the single most important criteria to select a certain booking channel. Finally, the research finds that consumers use a mix of online and offline sources of information during their booking journeys. However, only 12 per cent of the consumers prefer to use offline sources for research. 57 per cent of the consumers believe that online channels give them better deals while 41 per cent find it more convenient for them to book online.


The consumer research for the report is based on consumer travel journeys across omnichannel pathway. GfK recruited consumers who were planning to book an accommodation for a domestic trip. An integrated methodology was used to capture both online and offline search behaviour. Online behaviour captured via Passive meter tracking app (GfK Leotrace (TM)) installed in the smartphones of 18-45 year olds who were travelling for domestic leisure/ business travel in  a two month period. These respondents were Android users spread across three cities – Delhi, Hyderabad & Ahmedabad and were regular internet users who had booked at least one flight past one year, online. The offline behaviour was captured through bi-weekly diaries and a face to face interview towards the end of the tracking period. The data of eight weeks of usage was captured for 256 intending travellers between Nov’16 – Jan’17.


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