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The Ripple Effect
As the travel sector in India opens up, it impacts both hospitality and tourism in its wake but the most vivid aspect of the uptick is seen in the rise of luxury travel including domestic and international
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One of the most impacted sectors in the last two years has been travel and hospitality. After a reset in 2020, where mass travel suffered significantly, luxury travel quietly made a comeback with pent-up demand and revenge travel never really being as missing from the scene as its mass equivalent. As uncertainty, and its impact on sectors like aviation continued, luxury travel did see its ups and downs, registering degrowth in 2020 but all signals now indicate that this sector is poised for sustained growth for the next three years.
In 2020, domestic luxury tourism in India was estimated to have generated only half of the revenue it did in 2019, while its international luxury tourism sector was anticipated to have lost one billion US dollars worth of revenue compared to the year prior according to a Statista study on the topic. This strong drop in luxury tourism revenue expected for India is associated with the pandemic. Nonetheless, the report forecasts that India’s luxury tourism sectors will recover by 2022 and even generate revenues surpassing the pre-pandemic numbers in the succeeding years.
India’s luxury travel sector will continue to see a higher share of domestic luxury travel even in the next couple of years, with numbers showing that 2023 and 2024 will beat the 2019 numbers by a large margin on that count. A similar growth trend will be seen in international luxury travel as well.
These numbers should not come as a surprise to players in the sector because one of the key segments that were targeted by destination marketers and tourism companies to revive India’s tourism was luxury travel and this thrust has continued. Staycation and workation became real concepts in the immediate post-pandemic phase as solo travel for all ages picked up. The growth of luxury travel even when mass travel was in the doldrums is also because of the growth in India’s high network individuals and upper echelons.
The pandemic also caused a shift in mindset for this segment and reports indicated how travellers now prefer longer stay holidays that are specifically customised also to their health and safety needs and impulse travel. Wellness and health focussed travel, travelling with nature in mind, unconventional experiences, innovative travel packages, adventure travel and even factoring in workspace during travel have all become some of the new trends that are driving luxury travel at the moment.
These trends have opened up the market for many new kinds of players as well. More or less luxury travel is leading the growth of the travel sector per se which is now poised to bring in more numbers to the Indian economy than it has in the last two years, thereby impacting much more in its wake.