Ride-hailing company Ola on Tuesday said it has decided to shut down all of its existing global markets, namely the UK, Australia and New Zealand amid rising competition.
The company mentioned that it will be focusing on the Indian market as it sees an “immense opportunity for expansion” in the country.
“The future of mobility is electric — not just in personal mobility but also for the ride-hailing business, and there is immense opportunity for expansion in India,” an Ola spokesperson said in a statement.
“With this clear focus, we’ve reassessed our priorities and have decided to shut down our overseas ride-hailing business in its current form in the UK, Australia and New Zealand,” it added.
The company operates in hundreds of locations and provides several modes of transportation, including two-wheelers.
Meanwhile, Ola’s mobility business in the country has reported a profit of INR 250 crore in FY23 against a loss of INR 66 crore in FY22.
He added, “The electrification programme is not just about environmental benefits. It’s a catalyst for economic growth. It creates jobs during construction, reduces dependence on imported fossil fuels, and positions Indian Railways as a modern and efficient engine of the nation’s economy.”
Its revenue rose 58 per cent to INR 2,135 crore in FY23 from INR 1,350 crore in FY22.”In FY23, we challenged ourselves — to not just grow and scale, but to do this profitably. While our revenue continued to grow at a strong clip of 58 per cent, we became EBITDA positive in the India mobility business,” the company said.
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The Indian airline business is the fastest expanding in the world and the third biggest. Despite being the death zone for survival and profitability, many people, from the flamboyant to the modest, have been drawn to try their luck in the category due to its external attraction. However, on average, one airline has been grounded annually since 1994, when private ownership was first permitted. In an industry where the return on invested capital has continuously been negative for an extended period, Jet Airways four years ago and Go First last year were the most recent victims. The difficulty in achieving profits hasn’t been a problem that’s idiosyncratic to the airline industry in this country. This is a situation that has occurred in the world’s most developed economies as well. In his influential 2008 Harvard Business Review (HBR) article, strategy expert Michael Porter evaluated all key US businesses according to the Return on Invested Capital (ROIC) they had produced over fifteen years. You may guess which industry came in last on the list. Airline.
Even while the sector appears to be in dire straits, isolated instances of profitability have flourished. Before the pandemic, for example, Indigo had a successful profit run for years in the Indian environment. Similarly, Air India Express’s achievements before its merger with AirAsia were sometimes overshadowed by the challenges faced by its larger and more well-known sister company, Air India. There have also been cases of Southwest Airlines and Singapore Airlines making large profits over extended periods globally.
Therefore, while it is true that making money in the aviation sector is challenging, it is not impossible, as some of the aforementioned cases show—despite how uncommon they may have been. If we examine these exceptional cases, the key to their accomplishment is their capacity to comprehend the subtleties of the industry structure and manage it with superb resource and capability allocation.
For example, Indigo quickly saw that the industry structure in its area of operation was marked by hostile forces: powerful suppliers (fuel, aircraft, etc.) who could charge high prices; buyers who had many options, could easily compare prices, and were remarkably price sensitive; rivals who occasionally had ample financial resources; and the constant influx of new players drawn to the market by its allure. Selecting the Southwest route, it purposefully positioned itself to generate profits through large-scale operations, trying to offset the power of these factors. Therefore, the goal of its whole endeavor was not to attain cost efficiency superficially; instead, it concentrated on reducing expenses as much as possible throughout all of its activities to maintain lower pricing than other carriers. Additionally, it could synchronize its procedures, and its punctual performance notably contributed to decreased operational expenses. Table 1 shows that year over year, its cost per available seat kilometer (CASK) has remained the lowest among its counterparts in the nation. As a result, it effectively evolved into the low-cost strategy leader that Porter discussed in his writing. The issue for the others, or those that didn’t succeed, was that an industry could only have one low-cost leader since only one company could maintain the lowest expenses and then pass those savings along to customers through reduced pricing.
Conversely, if we look at global success, Singapore Airlines achieved success via a different route – that of differentiation. It is renowned for providing outstanding service at a premium for the customer. Finally realising this, Vistara, the Singapore Airlines subsidiary operating in India, is now focused on delivering a premium experience for its patrons, including complimentary meals, first-rate service, a loyalty program, and premium economy seats for an enhanced traveller experience. As a result, it reported its first EBITDA profit since its entry in 2016 during the first quarter of the Financial Year (FY) 2023–2024. Vistara should avoid making the error of directly competing with the low-cost group’s prices. Vistara has a unique value proposition, and it has to ensure that premium pricing pays the expense of delivering a higher value.
As part of its expansion strategy and in response to strong demand, Vistara has announced the deployment of its Boeing 787-9 Dreamliner on the Delhi – Bali route, effective from 31st March 2024. This move comes in anticipation of increased travel during the upcoming summer season. Vistara initially launched daily non-stop flights on this route in December 2023, operated by its A321LR aircraft, becoming the sole airline to offer direct flights between Delhi and Bali.
In any business, companies need to hold any of the two possible positions for success: either aim to create differentiation by spending higher or pursue low-cost leadership. Of course, there are many different kinds of differentiation; this is evident when one looks at another transportation area. Toyota, Mahindra, and Tata Motors strive for differentiation in the Indian market, albeit in different ways. While Toyota is associated with durable cars, Mahindra is recognised for its toughness. Tata Motors has established a strong reputation for safety while achieving a fantastic turnaround quickly from loss-making to a highly profitable position. In the airline sector, for example, offering premium economy seats like Vistara or operating unique routes that no one else flies, like Air India Express, are ways to stand apart.
Since the low-cost leadership group is a significant client category that can be catered to, it has a strong attractiveness that draws in most airlines. Indigo’s substantial market share of nearly 60% in India is attributed to its low-cost leadership position. However, the industry’s profitability could improve if other airlines pursued their unique differentiation. Currently, five Indian airlines operate in the low-cost segment, which can lead to a problematic scenario for profits due to competitive strategy. The more airlines that pursue differentiation, the greater the profitability tension would be relieved.
Porter states that the essence of strategy is gaining a competitive edge via differentiation. Finding, creating, and maintaining this distinct position no one else has taken hold of is the key to success. It would be simpler for Indian airlines to increase their own and the sector’s profitability the sooner they grasp this.
The authors are the Associate Professor of Finance and Economics, SPJIMR and Assistant Professor in the Strategy & Consulting Area at the Goa Institute of Management.
DISCLAIMER: The views expressed are solely of the author and ETTravelWorld.com does not necessarily subscribe to it. ETTravelWorld.com shall not be responsible for any damage caused to any person/organisation directly or indirectly.
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In a recent report titled ‘Hotel Investment Trends – India 2023,’ JLL India unveiled significant growth and positive trends in the hospitality sector, particularly during the first quarter of 2024. According to the report, there was a noteworthy 80 per cent Year-on-Year surge in hotel transaction volumes, amounting to USD 78 million in Q1FY24.
The sector has been on an upward trajectory since 2023, witnessing record hotel signings and openings. In 2023 alone, there were 25,176 key signings and 12,647 key openings, with a notable interest in hotel development activities shifting towards Tier-2 cities, accounting for 54 per cent of total signings.
Hotel investments in India surged to USD 401 million in 2023, marking a four-fold increase compared to 2022. A significant portion, 25 per cent of the total transaction value, involved under-construction hotels across both business and leisure destinations. Additionally, 2023 saw a milestone of 22 hotel transactions, the largest in a decade, with three hotel companies debuting on the stock market through IPOs. Greenfield projects in 2023 added approximately 13,600 keys, showcasing developers’ enduring confidence in the sector’s long-term growth potential.
Jaideep Dang, Managing Director of Hotels and Hospitality Group at JLL India, commented, “The year 2023 witnessed record hotel investments, new openings, and signings, setting a strong foundation for 2024. The sector’s enthusiasm is bolstered by the performance of hotel stocks, leading to more companies entering public markets with robust valuations. We anticipate this positive trend to continue in 2024, driven by various growth avenues such as expanding commercial markets and infrastructure development.”
The rebound in the tourism sector has been particularly notable, with global travel and tourism revenues projected to increase by 8.3 per cent in 2024, reaching almost USD 930 billion. This surge marks the highest revenue figure ever recorded in the industry, reflecting a strong resurgence following the pandemic-induced downturn.
Key highlights from the report include:
– High Net Worth Individuals (HNIs) and Institutional Capital were major contributors to hotel investments, accounting for 3 per cent of total investments.- Real estate developers constituted 27 per cent of investments, followed by owner-operators at 11 per cent.
– The upper upscale segment witnessed the highest number of key transactions, followed by upscale, luxury, and midscale segments.
– Five transactions facilitated through the insolvency resolution process under the National Company Law Tribunal (NCLT) represented 33 per cent of the total transaction value, amounting to USD 133 million.
– Management contracts continued to dominate signings, comprising 78 per cent of total key signings, with an increase noted in lease and revenue share models across different tiers, making up 4 per cent of total keys signed. Tier 1 cities experienced a notable increase of 31 per cent in key signings compared to 2022, driven by the robust performance of the commercial sector.
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As the Holi and Good Friday festivals coincide in March, Indian travellers have a great opportunity to enjoy a longer break. This year, Holi falls on March 25, and Good Friday is on March 29, giving people a shorter workweek to enjoy a longer leisure time without using up too much annual leave.
Many travellers are taking three days off to extend the holiday to nine days, thanks to the unique opportunity of Holi and Good Friday falling in the same week. According to various travel agencies and online portals, there has been a huge surge in demand, with close to 350 per cent increase in both domestic and international travel for the extended Holi weekend compared to last year.
Skyscanner’s Travel Trends 2024 report found that 63 per cent of Indian travellers plan to spend more on travel in 2024 than they did in 2023. This is evident from the bookings for destinations like New Delhi, Mumbai, and Bangalore in March 2024, which have already surpassed 75 per cent of the bookings recorded for March 2023, even though it is only mid-month. This suggests that this travel season is expected to be more robust than the previous Holi festival.
A growing trend in travel is the search for holidays that offer cultural immersion and spiritual connection.
Indians travellers are seeking a diverse range of experiences during their leisure time, from exploring vibrant cities to soaking in cultural festivities. According to data from Booking.com, some of the most searched leisure destinations, besides popular metros, include Udaipur, Jaipur, Goa, Lonavala, and Manali.
Furthermore, spiritual destinations are gaining popularity, with Vrindavan, known for its Holi celebrations, emerging as one of the top five most searched destinations in India. Other popular destinations include Rishikesh, Puri, and Varanasi.
For international travel, the announcements of visa-free entry has been a game-changer for destinations like Sri Lanka, Malaysia and Thailand, resulting in a significant uplift of approx. 35 per cent. Sri Lanka has seem maximum benefit with demand up by 40 per cent, followed by Malaysia at 35 per cent and Thailand at over 30 per cent.
Higher spends
Indians are spending 25 per cent higher this Holi compared to last year.
Airfare trends
Fueled by this growing demand in 2024, airfares have risen slightly by 12 per cent on the Mumbai to Delhi route and by 17 per cent on the Bangalore to Delhi route compared to the week of Holi in 2023. Similarly, for travellers flying from Delhi to Bangalore, airfares have surged by 16 per cent as opposed to the same time last year. That said, prices are not all rising at the same time, airfares on the Delhi to Mumbai route for example had a drop of 12 per cent in price when comparing airfares for the week of 11 March versus 18 March.
On the other hand, there has been a 6-10 per cent drop in airfares (compared to Holi last year) for domestic favourites like Srinagar, Chandigarh, Andamans, Bagdogra, Goa and Jaipur from hubs like Mumbai, Delhi, Bengaluru, Hyderabad, Chennai and Kochi. In the subcontinent, airfares to Kathmandu and Colombo have witnessed a drop of approx. 5 per cent – inspiring an uplift in air travel.
According to data shared by EaseMyTrip, there has been an impressive surge of around 190 per cent is noted in the Delhi-Goa, while the Mumbai-Lucknow route has seen an uptick of approximately 30 per cent. Despite a rise in airfares by 10-15 per cent, a 2.5 times surge in searches for the long weekend has been observed, compared to previous years.
“We have seen a 46 per cent YoY increase in flight searches for Holi travel this year. Domestic fares for popular routes have shot up 25-30 per cent in the last week of March as travellers are making most of the back to back long weekend on account of Holi and Good Friday holiday. International travel is also picking up with Dubai, Singapore, Bali & Bangkok emerging as traveller favourites this Holi,” said Aloke Bajpai, Chairman, Managing Director and Group CEO, ixigo.
Destination trends
Digital travel platform Agoda analysed its search data and found Dubai on top as the favorite international travel spot. Domestically, Goa is the most popular destination searched for Holi and Good Friday.
For those planning an international getaway, nearby Dubai is the most popular destination, with Singapore coming in second spot. Thailand’s visa waiver policy likely helps it secure two of the top five most popular spots for travel with Bangkok number three and Phuket fifth. Bali (Indonesia) is the fourth most popular international destination for the Holi and Good Friday break.
“As Holi and Good Friday long weekends approach, leisure bookings are on the rise. The top domestic flight destinations at MakeMyTrip are Goa, Srinagar, Guwahati, Port Blair, and Bagdogra. Popular hotel destinations include Udaipur, Jaipur, Puri, and Varanasi. Premium bookings are higher than usual by close to 10 per cent. Internationally, short-haul favorites include UAE, Thailand, Singapore, Indonesia, and Malaysia, while top long-haul destinations are the UK, USA, Australia, Japan, and Germany. Hotel bookings for religious destinations such as Puri, Varanasi, and Amritsar have doubled since last year, emerging as the second most preferred category after beaches,” said Rajesh Magow, Co-founder and Group CEO, MakeMyTrip.
Trains have been planned to connect major destinations across the country on railway routes like Delhi-Patna, Delhi-Bhagalpur, Delhi-Muzaffarpur, Delhi-Saharsa, Gorakhpur-Mumbai, Kolkata-Puri, Guwahati-Ranchi, New Delhi-Shri Mata Vaishno Devi Katra, Jaipur-Bandra Terminus, Pune-Danapur, Durg-Patna, Barauni-Surat etc,” the Railway’s press statement said.
“The spike in demand is primarily fueled by individuals travelling from metro areas to their hometowns in Tier II and III cities. We anticipate a surge in bookings for destinations such as Goa, Delhi, Mumbai, Bangalore, Jaipur, Mathura, Vrindavan, Varanasi, and Amritsar,” mentioned Nishant Pitti, CEO and Co-Founder, EaseMyTrip.
According to data from Airbnb, South Goa has emerged as the top Indian domestic destination with a nearly 330 per cent increase in searches for stays for the upcoming long weekend, highlighting its appeal as the preferred beach destination. Additionally, the cultural allure of Varanasi, Jaipur, and Pondicherry as well as popular hill stations like Mussoorie, Ooty and Manali are also driving diversified interest for short getaways during the upcoming long weekend.
On the international front, Athens leads the way with an approximately 400 per centspike in searches, earning its place at the top of the wishlist for Indian explorers, closely followed by Istanbul, Bangkok, and Rome. These cities represent a blend of historical richness and cultural vibrancy that resonates deeply with Indian travellers.
Krishna Rathi, Senior Country Director India Subcontinent and Maldives at Agoda, stated, “The consecutive long weekends for Holi and Good Friday provide a unique window for Indians to plan extended trips. Whether people are looking to explore India or abroad, it’s a great opportunity to whet the travel appetite among Indians, which has only increased since the recent waiver of visa requirements. As more Indians look to expand their horizons, Agoda is committed to offering great value deals on accommodations, flights, and activities at home and abroad to help them see the world for less.”
“With Indians becoming increasingly savvy with their travel planning, it is not surprising that travel enthusiasts are seizing the upcoming extended break for Holi and Good Friday to jet off to nearby destinations. As a result, cities such as New Delhi, Mumbai, and Bangalore are stealing the spotlight as prime hubs with Kolkata, Goa and Hyderabad following closely behind. Many are also making the most of the long weekend by flying to international hotspots like Dubai, London, and Bangkok,” said Mohit Joshi, Travel & Destination Expert at Skyscanner.
Drivecations: uptick of 25 per cent in closer to home/drivable destinations with increased length of stay from 3-4 days to 5-7 day. Travellers in/around Delhi are opting for destinations including Naukuchiatal, Munsiyari, Kangra, Kanatal, Kausani, Ranikhet, Mukteshwar; Bhandardara, Amboli, Sindhudurg, Kolad, Kamshet, Harnai-Anjarle, Saputara, Silvassa, Saputara for customers in Maharashtra & Gujarat; Hampi, Gokarna, Coorg, Puducherry, Kanyakumari for customers in Karnataka/Tamil Nadu.
Outdoor Adventure: 30 per cent increase in interest for outdoor and adventure travel with biking trips in Srinagar – Leh – Manali, Manali to Spiti Valley, Jaipur-Jodhpur-Jaisalmer. White water rafting in Rishikesh, Leh-Ladakh, Uttarakhand. Paragliding in Shillong, Gangtok. Camping in Jaisalmer, Kullu, Chopta. Trekking in Sikkim, Coorg, Mcleodganj. Snowboarding in Auli Pahalgam and Sethan. Safari in Pench, Kanha, Corbett, Ranthambore.
Rajeev Kale, President & Country Head – Holidays, MICE, Visa, Thomas Cook India said, “This year, we are witnessing a significant demand uptick of 5x vs last year and increased spends of 25 per cent; more so given the longer duration of two weekends. In addition to celebrating Holi, our segments across Young India, families, and ad-hoc groups of friends are looking to explore destinations within the country; also shirt haul international options.”
Daniel D’souza, President & Country Head, SOTC Travel said, “The upcoming Holi week combined with the subsequent Easter weekend offers strong potential for a week long vacation, and our data indicates surge from not only from metros and mini-metros, but also our Regional tier 2 and 3 cities. What is noteworthy is that we are seeing a surge in air-inclusive holidays fuelled by the dip in airfares over the extended week/weekend; drivecations too are seeing a brisk business.”
Just before the onset of the summer travel season, India and Thailand last week finalised an agreement that will allow airlines to deploy more flights between the two countries. In a meeting in Bangkok, the countries agreed to increase capacity by 14,000 seats per week for both sides which is an increase by 43 per cent.
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Indian airlines will operate a total of 24,275 weekly domestic flights during the summer schedule starting from March 31, a nearly 6 per cent increase compared to the year-ago period. The number of weekly departures is just 2.30 per cent higher as against 23,732 flights being operated by the scheduled carriers in the ongoing winter schedule that ends on March 30, according to aviation regulator DGCA.
IndiGo, Air India and Vistara will operate more flights while SpiceJet will reduce departures during the 2024 summer schedule that spans from March 31 to October 26.
In the summer schedule, Indian carriers will connect 37 countries, including the US, the UK, Uzbekistan, Maldives, Georgia and Azerbaijan. The international flights will be operated from 27 domestic airports.
Domestic carriers will be operating 1,922 weekly international flights, a rise of 5.1 per cent compared to the 2023 summer schedule. In comparison to the ongoing winter schedule where the count of international weekly flights is 1,892, the increase is only 1.6 per cent.
Akasa Air, which is set to commence its overseas operations on March 28, is yet to file its schedule for international flights with the Directorate General of Civil Aviation (DGCA).
The regulator said there will be 24,275 domestic departures per week which have been finalised to/from 125 airports as per the summer schedule.
“Out of these 125 airports, Azamgarh, Aligarh, Chitrakoot, Gondia, Jalgaon, Moradabad and Pithoragarh are the new airports proposed by the scheduled airlines,” the watchdog said in a release on Thursday.
The country’s largest airline IndiGo will be operating 13.82 per cent more flights at 13,050 in the summer schedule, while Air India will increase its weekly departures by 4.59 per cent to 2,278.
Vistara will be operating 25.22 per cent more weekly flights at 2,324 while Akasa Air will increase their weekly domestic departures by 14.30 per cent to 903.
SpiceJet will be cutting down its weekly departures by 22.28 per cent to 1,657.
In terms of airports that will be operational during the summer schedule, Uttar Pradesh will have the maximum number at 14, followed by Maharashtra (11) and Gujarat (9).
In the international segment, Air India will operate 455 weekly flights, an increase of 5.1 per cent compared to the year-ago period.
The Mumbai airport will facilitate a total of 951 daily movements, up from approximately 882 in the previous summer schedule of 2023. With over 6,657 movements weekly, there will be a notable 8 per cent surge in weekly flight operations compared to the previous year, benefiting travellers from Mumbai and nearby cities.
IndiGo will have 13.5 per cent more international flights at 731 while Vistara will increase its weekly overseas departures by 50.8 per cent to 184. Air India Express’ departures will rise 20.8 per cent to 371 flights.
However, SpiceJet will be reducing its international flights by 12.6 per cent to 174. In the last summer schedule, Go First was to operate 120 weekly overseas flights. The carrier stopped flying in May 2023.
Alliance Air will operate 7 weekly international departures in the latest summer schedule compared to 4 in the year-ago period.
Air India, Air India Express and Vistara are part of the Tata Group, and Vistara is in the process of getting merged with Air India.
India’s civil aviation market is one of the fastest growing in the world but there are supply chain and engine woes that have also resulted in the grounding of many aircraft.
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This International Women’s Day, Airbnb celebrates the remarkable contributions of women Hosts and Guests who have reshaped the hospitality landscape in India. With nearly 30 per cent of Airbnb Hosts being women, these trailblazers collectively earned over INR 2 billion (approximately 200 crores / USD 28 million) in 2023, demonstrating their pivotal role in driving economic empowerment and fostering inclusivity.
Anooradha, a Superhost since 2017, shares her journey of hosting on Airbnb, stating, “Beyond the supplementary income, hosting has allowed me to forge meaningful connections with guests who share my interests and values. I encourage aspiring women hosts to infuse their homes with personal warmth and creativity, creating memorable experiences for guests.”
Sumana, another Superhost, reflects on her transition from a corporate job to full-time hosting, emphasizing the fulfillment and financial independence hosting has provided. She says, “Hosting on Airbnb has led me to a path of inner strength and stability, enabling me to connect with guests from across the country while immersing myself in their stories.”
Amanpreet Bajaj, General Manager of Airbnb India, Southeast Asia, Hong Kong, and Taiwan, underscores Airbnb’s commitment to fostering an inclusive community for women Hosts and Guests. He states, “Women play a vital role in driving growth and social transformation. At Airbnb, we are dedicated to creating a diverse, equitable community that empowers women hosts and travellers alike.”
Millennial women travellers are increasingly turning to Airbnb for their accommodation needs, with domestic destinations like Goa, Bengaluru, and Delhi NCR topping the list. Internationally, cities such as London, Dubai, and Paris remain popular among Indian women travellers.
The European Parliament approved new data-sharing rules Thursday that clamp down on illegal short-term rentals to protect the residents of European cities — many of whom face shortages of affordable housing. Better data sharing will enable “the removal of illegal listings, and will contribute to fighting the housing crisis by tackling speculation and safeguarding access to affordable housing,” she said during a parliamentary debate.
Solo travel among Indian women guests witnessed a significant rise in 2023, with 30% choosing to explore destinations alone. National Parks, iconic cities, and accommodations with private rooms and pools were among the most booked categories by Indian women guests.Actor Sayani Gupta applauds Airbnb’s role in empowering female travellers, stating, “Airbnb has been my preferred travel companion, offering safety and unique experiences for solo exploration. This Women’s Day, I commend Airbnb’s commitment to providing comfort for avid female travellers while empowering others to embark on their entrepreneurial journey as hosts.”
As Airbnb continues to champion women empowerment and inclusivity, its platform serves as a catalyst for fostering connections, experiences, and opportunities for women across India and beyond.
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The campaign aims to instill aspiration among Indian travellers and establish a loyal customer base with travel agencies based on the total number of passengers booked within the specified timeline. Scheduled to run for four months, from February to June 2024, the campaign seeks to capitalise on the growing interest in travel to Kenya among Indian tourists.
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Last year, without direct flights, Bali welcomed over 400,000 Indian tourists. This staggering figure underscores the immense potential for growth once direct flight routes are established, stated Ina H. Krisnamurthi, Ambassador, Embassy of the Republic of Indonesia in India.
“Thanks to initiatives like IndiGo’s direct connection to Jakarta and Vistara‘s efforts in establishing direct links from Delhi, we are now in a better position to encourage travel to Bali. The availability of these direct flights presents an opportunity to significantly enhance tourist inflow between our nations, as evidenced by last year’s influx of over 400,000 Indian visitors to Bali, a figure we anticipate will grow,” the ambassador said.
In terms of overall tourist numbers, Indonesia welcomed a staggering 11.67 million visitors in 2023, almost double the number in 2022. Bali alone received 5.23 million visitors, accounting for nearly half of Indonesia’s total tourism arrivals.
The ambassador further urged the Indian stakeholders to seize the opportunity presented by improved connectivity. She highlighted that despite the Indian populace expressing keen interest in Bali, their actual visitation numbers remain relatively low, primarily due to the absence of direct flights.
“While traffic from India may exhibit seasonal trends or focus on wedding-related travel, we must strategise on maintaining consistent demand and exploring new avenues for engagement,” she said.
Vistara Bombay-Bali to be a reality soon
Payal Mehta, Regional Manager Sales -North India at Vistara – TATA SIA Airlines Ltd. informed that the airline is also exploring options for flights from Bombay. “Vistara currently operates daily direct flights from Delhi, which is performing satisfactorily. Nevertheless, with the continued support and contributions from everyone involved, our flight operations are progressing well. Our next step involves introducing Boeing LR series aircraft to Bali, offering approximately 300 seats per departure. Plans for flights from Bombay are indeed on cards, pending bilateral approvals and support. Rest assured, we are actively working towards these goals and anticipate positive outcomes in the near future,” she told ETTravelWorld. “If all goes according to plan for strengthening our Delhi departures, we may introduce wide-body aircraft from Delhi in the future. Merger is on the cards with Air India and we are still assessing on how it opens or works out,” she added.
Mumbai remains a consistent frontrunner as the primary source city for South African Tourism in India. Reflecting this trend, inbound tourism from Mumbai saw a substantial 37 per cent year-on-year growth in 2023, contributing to the overall surge in leisure and business travel. Overall, for India, there has been a 43 per cent increase from previous year. Neliswa Nkani, Hub Head – Middle East, India, and South East Asia, South African Tourism shares more.
$10 tourist fee an investment in environmental conservation, not a deterrent
To conserve the cultural richness of Bali and to avoid the repercussions of overtourism, the Indonesian government had recently introduced a USD 10 levy on foreign tourists upon their arrival. This measure exempts domestic travellers, diplomatic visa holders, and citizens of ASEAN countries from the tourism levy.
“We all admire Bali, which is a sought-after destination for Indians. Indonesia, as a nation, is known for its warm hospitality and excellent services. However, tourism also brings about certain challenges, such as environmental damage and waste generation. Therefore, it’s crucial to address these issues by focusing on waste reduction at the source. Given that 80 per cent of Bali’s economy relies on tourism, it’s paramount to safeguard it,” said Sanjay Sondhi, Country Manager, Visit Indonesia Tourism Office India.
Acknowledging that the recent implementation of a tourist fee is a must to preserve the local culture and protect the environment, Sondhi said that it’s essential for the local community to feel involved and not suffer from the negative impacts of tourism.
“Bali boasts ancient irrigation systems, UNESCO heritage sites and picturesque paddy fields, offering unique experiences beyond urban areas. It also stands out for its cultural diversity, with over 20,000 temples and a rich Hindu heritage. Tourism specialists in India can tailor itineraries to showcase these authentic experiences and promote a harmonious coexistence with nature,” he suggested.
“The USD 10 fee should be viewed as an investment in environmental conservation rather than a deterrent, following the example set by other nations like Bhutan, where a USD 100 fee is imposed per person. As stakeholders from India, we should support these efforts to ensure sustainable tourism practices and protect Bali’s natural assets,” Sondhi expressed.
75 years of bilateral relations to foster tourism
Notably, Indonesia is also completing its 75 years of bilateral relations with India. Symbolising the enduring bond between the two nations, the ambassador referenced the shared values and historical ties represented by the special logo, adorned with colours reminiscent of both the Indian and Indonesian flags.
She said that a series of celebrations, showcasing Indonesia’s commitment to deepening cultural and economic exchanges with India have been planned this year. This includes cultural and dance performances, festivals, and sales missions across major Indian cities.
Echoing the sentiments through a popular quote- Bali is more than a place. It’s a mood; it’s magical. It’s a tropical state of mind, the ambassador remarked, “As a representative of the government, I am encouraged by the growing closeness between Indonesia and India, which is reflected not only in our symbolic gestures in the logo but also in tangible collaborations post-COVID-19,” she concluded.
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By the end of this year, the tourist arrivals in South Asia are expected to return to the levels seen in 2019, indicating a notably rapid recovery compared to other sub-regions. Additionally, under both mild and severe scenarios, it is projected that by the end of 2024, South Asia will attract 25 million and 60 million visitors, respectively, signifying a substantial influx of tourists to the region. This surge into the region is anticipated to benefit India’s inbound tourism significantly, as per Prof Haiyan Song, Research Head at PATA, and Dean of Hospitality and Tourism at Hong Kong Polytechnic University. The Tourism Forecast and Trends analysis presented by the professor showed that the inbound tourism to India experienced a downturn in 2021 due to various factors. However, it is anticipated to fully rebound and reach pre-pandemic levels by the end of this year, marking 104.2 per cent recovery in the medium scenario. The international visitor arrivals (IVAs) are expected to exceed the pre pandemic level in 2026 by 58.5 per cent and 20.5 per cent in mild and medium scenarios, respectively.
“India has emerged as the fastest recovering destination, exceeding pre-pandemic levels by over 58 per cent by 2026. This robust growth trajectory underscores the positive outlook for India’s tourism sector in the forecast period. Looking ahead, the recovery is anticipated to be driven significantly by initiatives from the supply side, notably the Union Budget 2023, which aimed at enhancing infrastructure. Additionally, the Incredible India branding initiative, including the possible launch of Incredible India 3.0 campaign, is expected to have a substantial impact on supply, attracting tourists from various source markets to India,” he added.
Also, as shared by Song, India will receive 17 and 13 million IVAs in 2026 in the mild and medium scenarios, respectively. Despite currently ranking 16th in international arrivals in the Asia Pacific region, India’s attractiveness to tourists is expected to improve, said Song.
Additionally, India is projected to rise to 14 markets by 2036, driven by faster economic growth, making the country more attractive for both tourists and investors.
China anticipated to emerge as significant source market for India
The major source markets for India currently include Bangladesh, the USA, the UK, with projections indicating significant growth from other markets by 2026, such as Malaysia. Comparing the pre-COVID-19 source market rankings of 2019 with the projections for 2026, there are notable changes, with Australia dropping down the ranks while China and Malaysia ascend.
Song shared that China is anticipated to emerge as a significant source market for India in the coming years, primarily due to the forecasted GDP growth of around five to six per cent per annum as per a report. “Visitor arrivals from China will be 429 thousand by 2026 (126.4 per cent of the 2019 levels under the medium scenario). Severe scenarios will see slower recovery in 2026 (59.7 per cent, given geopolitical and macro-economic concerns. Notably, the simplified visa process would help to attract more Chinese visitors,” shared Song.
Visitor arrivals from Bangladesh to India are also expected to surpass 2019 levels by 111.8 per cent by 2023, with visa-free access likely enhancing this trend. The USA is expected to contribute around 1.7 million visitors to India by the end of June, with American tourists known for their high spending. Factors driving this include the ongoing economic recovery and consumer confidence in the US.
“To further attract tourists from the US and other developed countries, India should focus on promoting diverse tourism products, especially luxury medical tourism, leveraging the comparatively lower costs of medical treatments in India,” suggested Song.
As for visitors from the UK, around 1.1 million arrivals are anticipated by the end of 2026. In the same period, visitor arrivals from Australia will be 407.3 thousand recording an increase of 110.9 per cent of 2019 level. Visitor arrivals from Australia will outperform the 2019 level by 24.9 per cent this year under the mild scenario.
Similarly, Canada IVAs recovery rate will be 138.3 per cent in 2024 and 406.6 thousand visitors from Canada will visit the country by the end of 2026, hitting 115.6 per cent of 2019 level. Malaysia, another strong market for India, will see high recovery rates in the mild scenario, shared Song, adding that about 483.7 thousand visitors from Malaysia will be recorded by the end of 2026.
India holds significant importance for Malaysia, serving as its fifth largest source of tourists. In 2023, Malaysia welcomed 17.8 million tourist arrivals, with 587,703 originating from India. The robust air connectivity between the two countries, with 181 weekly flights offering 33,851 seats, further facilitates travel and strengthens bilateral ties between both nations.
Indonesia and Canada predicted to become more popular
On the outbound front, the market of India is generally stable during the forecast period as per Song. Sharing further, he stated that the top destinations for Indian tourists in 2026 include Thailand, the USA, Singapore, China and Indonesia. Out of these, Indonesia and Canada are predicted to become more popular, with their rankings increased by 1 and 3 places from 2019 to 2026, respectively. Speaking about India’s tourism potential, Song shared that India is known by its geographical diversity and rich cultural heritage, which also emerged as a focal point of the research done for PATA. Despite this inherent allure, global awareness of India’s cultural depth remains uneven across key source markets, presenting untapped opportunities for targeted promotion and marketing initiatives.
Song also advocated for proactive measures and strategic investments, deeming them essential for India to capitalise on its tourism potential and emerge as a premier global destination in both traditional and new markets.
South Asia poised to experience the swiftest recovery among sub-regions
The presentation made by Song also highlighted the rapid recovery of South Asia, with the region leading in impact on the tourism economy. The recovery rates in South Asia outpaced those of Southeast Asia and the Asia Pacific region as a whole as per the tourism monitoring report. Looking ahead to 2026, South Asia is poised to experience the swiftest recovery among sub-regions, with a projected growth rate of 1.2 per cent, shared Song.
“By the conclusion of this year, tourist arrivals in South Asia are expected to return to the levels seen in 2019, indicating a notably rapid recovery compared to other sub-regions. Additionally, under both mild and severe scenarios, it is projected that by the end of 2024, South Asia will attract 25 million and 60 million visitors, respectively, signifying a substantial influx of tourists to the region,” he shared.
A closer look at sub-regions revealed intriguing dynamics. Northeast Asia held the highest market share in 2019, while South Asia, including India, accounted for a relatively small share. However, projections indicated a significant increase in South Asia’s market share by 2026, primarily fueled by a surge in arrivals to India.
After Covid-19, economic growth in many major source markets in the Asia Pacific region has been severely impacted, recalled Song. Consequently, the number of tourists traveling from Europe to India and other parts of Asia Pacific has been limited. Factors such as high inflation in Europe and the United States have led to significantly increased travel costs, sometimes double or even triple the pre-pandemic levels, deterring international travel. Song said that these economic challenges have played a significant role in dampening international tourism demand.
To this, Song emphasised the critical role of various factors such as economic conditions, digital transformation, consumer confidence, and supply chain resilience in driving future tourism recovery. Additionally, supportive visa policies will remain a critical driver for the tourism recovery within the APAC region, which is expected to see total arrivals going up to 133.35 per cent in a mild scenario by 2026.
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The Arabian Travel Market (ATM) 2024, slated from May 6-9 at the Dubai World Trade Centre, is gearing up to shed light on India’s burgeoning outbound tourism sector, poised to reach a staggering USD 143.5 billion annually by the decade’s end.
Recent data reveals that over 30 per cent of Indian travellers prefer Middle East destinations, with the UAE and Saudi Arabia topping the list. India stands as Dubai’s primary source market, with 1.9 million visitors recorded in the first 10 months of 2023. Saudi Arabia, on the other hand, aims to welcome 7.5 million visitors by 2030.
ATM 2024 will feature a dedicated India Summit, titled ‘Unlocking the True Potential of Inbound Indian Travellers,’ slated for May 6. This summit, in collaboration with VIDEC Consultants, will delve into India’s role as a key tourism growth market and explore current and future opportunities.
Danielle Curtis, Exhibition Director ME, Arabian Travel Market, highlighted India’s rapid outbound growth, fueled by a burgeoning middle class. “By 2030, India’s total travel expenditure will be valued at USD 410 billion, a substantial increase from USD 150 billion in 2019,” she stated.
Moreover, a survey by Acko Insurance underscores Indian travellers’ willingness to spend up to USD 7,000 on international trips, further boosting the appeal of Middle East destinations. Dubai, in particular, stands out as the preferred city destination, thanks to its proximity to India and enhanced connectivity.
Under this program, tourists can obtain a visa within two to five working days, allowing them to stay in Dubai for up to 90 days, extendable once for a similar period, with a maximum stay of 180 days within a year. This flexible visa option caters to both leisure and business travelers, offering unparalleled convenience and connectivity.
Curtis emphasised the significant role of Indian expatriates in driving business travel and bleisure in the Gulf states. “With over 8.5 million Indian expatriates currently working in the GCC, business travel and bleisure will undoubtedly underpin this growth,” she noted.ATM 2024 anticipates a record number of travel professionals representing both outbound and inbound travel to India. With an expected 20 per cent increase in exhibitors from India, the event will showcase the diverse offerings of Indian tourism, featuring exhibitors like TBO.com, Taj Hotels, Rezlive, and Rategain, among others.
Aligned with its theme, ‘Empowering Innovation: Transforming Travel Through Entrepreneurship,’ ATM 2024 will serve as a platform for stakeholders from across the Middle East and beyond to explore innovative solutions and opportunities in the ever-evolving travel industry.
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