How has 2023 been for the hospitality industry?
The entire industry has completely recovered. The present market size, this year, is higher than pre-Covid numbers. Initially, it was aided by revenge travel. Now, there is a permanent shift in the way that people are thinking about travel. Earlier, it used to be an annual vacation or twice a year. But now, people want to venture out every weekend, as registered by both air travel and hotel bookings. In the next three years, the industry is projected to grow at 14 per cent CAGR and online travel aggregators (OTA) will specifically be growing at around 20 per cent+.
How do you see airfares stabilising?
The prices have been sort of hunky dory, hovering at the higher side for the predominant part of the year, owing to both better demand and lower aircraft supply, as a few airlines were unable to fly all their aircraft. Moreover, crude oil prices also went up.
Crude oil prices have started coming down, so this should help lower airfare in the short term, which is the next two months. However, considering it's a festive time, and aircraft supply is still less, prices will continue to be higher through Diwali and New Year - at least 15-20 per cent higher than last year.
But from a long term perspective, with more aircrafts coming in, there is no reason why this price would remain high. January onwards, I'm quite optimistic, the price will start coming down.
What is the outlook for the festive season based on pre-bookings?
So for us in particular, for the South specifically, we have received like 47 per cent more bookings, compared to last year, in hotels (for travels after 15 days), even in the pre-sale days. Specifically, a few places where we have seen heightened interest levels are Ooty, Pondicherry, Rameshwaram. These are the top destinations that we are looking at from a leisure perspective.
Now during the sale, there is 4x of growth for travel plans two months ahead (read December). And internationally, this growth is 5x.
What are the trends in Indians travelling abroad?
For international travel, there are broadly two kinds of destinations: short haul destinations like the Middle East and Asia Pacific, which is not more than 3-4 hours of travel and then there is long haul, which is yet to completely come back to normalcy, owing largely to visa and supply issues. Prices are nothing less than 30-40 per cent higher than pre-Covid days even in the business class. So if you look at Europe, the US, Australia, New Zealand, the prices are unprecedented.
In the short haul destinations, demand has been exceedingly good. With new unexplored destinations being added, such as Indigo’s flights to Azerbaijan, the uptick is really healthy.
What are your plans to scale up product offerings?
The next six to 12 months, we are going to launch very very sharp industry first features both from a value and also service experience perspectives. We want to be like an end to end destination when it comes to travel. So not just buses, we will be venturing into cabs, trains, visa, forex. We are going to play a lot more in figuring out these in-demand destinations, pricing, travel routes, and hence make it a lot more discovery led.
What opportunities lie ahead for the sector?
The rising disposable income of those in the 18-25 age bracket, the arrival of new aircraft, the growing footprint of international hospitality chains in India - all point to a bare minimum 15 per cent CAGR. I won't be surprised if this number goes to as high as 20 per cent as well, not just for the next three years, but for probably the next five to seven years.