Indians are planning to expand their travel budgets but may forego luxury. Asia will remain to be on the priority list
The 2013 kickstarted with an optimistic outlook for Indian travellers with ‘travel’ becoming an integral part of their consumption basket — a change even a slow economic scenario was unable to derail. The Trip Barometer survey by TripAdvisor highlighted positive changes for Indian travellers in 2013 despite high inflationary pressure and an overall economic outlook that did not predict much increase in salaries this year. With 77 per cent respondents declaring they would increase their travel spend this year; Indian travellers seemed to be upbeat about their holiday plans for 2013. Interestingly, foreign holidays saw a marginal dip but traveller sentiment stayed optimistic on heading overseas for vacation. However, a healthy 62 per cent still claimed to undertake international travel in 2013. Inflation, falling rupee value and high airfares seemed to be primary factors impacting holiday budgets, but resilient travellers choose to revise and not refrain from holiday plans. Even with more travellers estimating their holiday spend to increase over last year, 75 per cent of those surveyed modified their holiday plans and not abandoned them.
According to the survey, fewer Indian travellers are planning to increase their travel budget next year, compared to 2013, despite more than half (57 per cent) stating that they are optimistic about the economy in 2014. While 59 per cent of Indians are planning to increase their travel budget next year (globally: 39 per cent) — the figure is down from 76 per cent in 2013.
To fund their vacation, 90 per cent of Indians would be willing to forego luxuries, which is in line with global consumers’ willingness to make sacrifices in order to go on holiday (88 per cent).
While domestic travel remains dominant, for those who are planning to holiday abroad in the coming year, intraregional travel will continue to be popular amongst Indian consumers with Asia being the ultimate destination for most. According to the study, one in two (54 per cent) Indian consumers who have plans to travel abroad in the next 12 months are planning trips within the Asia region. Only 26 per cent of them intend to visit Europe and North America, respectively, in the year ahead.
On the hospitality side, eight out of 10 of Indian hoteliers are optimistic about their business profitability in 2014, which is significantly higher than the global average of 67 per cent. Next to positive business forecast, 58 per cent of Indian hoteliers plan to increase their room rate, citing increased overheads (64 per cent) and staying in line with competition (32 per cent) as key reasons behind the price increase.
Optimistic outlook is driving investments across the Indian hospitality industry with 35 per cent of hoteliers planning to open new properties in the coming year, which is twice the global average of 17 per cent.