Economic growth, rise in purchasing power and changing lifestyles have led to the emergence of many new markets in India – and the country’s domestic travel market is one such.
India’s domestic travel market is expanding and expected to reach $48 billion, growing at 11-11.5 per cent, by 2020, says a Google India and Boston Consulting Group (BCG) report.
The report, named “Demystifying the Indian Online Traveller”, gives insights into the growth of travel businesses by 2020.
“Travel is a high investment. Technology has led to democratisation of travel through better information and price discovery and shall lead to 11-11.5 per cent growth in the years ahead,” said Abheek Singhi, Asia Pacific Head (consumer practice) at BCG.
The report connects the travel market with rise in smartphone penetration. It says smartphones will help the online hotel market grow to $4 billion at a Compound Annual Growth Rate (CAGR) of 25 per cent. At the same time, offline hotels will grow at 13 per cent to $13 billion by 2020.
The Google India-BCG report also notes the purchasing behavior of travellers. Only 12 per cent of consumers prefer to use offline sources for research on travel, while the rest are online consumers. The remaining 57 per cent believe that online channels give them better deals, while 41 per cent find it more convenient to book online.
“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,” added Vikas Agnihotri, industry director, Google India.
The air travel market has also grown by leaps and bounds in the past few years and is the biggest contributor to the growth of the domestic travel market.
According to the report, the air travel market will grow at 15 per cent and reach $30 billion by 2020, while the railways will remain largely stagnant at $5 billion.
The report is based on data tracked from 256 travellers between November 2016 and January 2017, who were 18-45-year-old Android users spread across Delhi, Hyderabad and Ahmedabad.