High prices fail to dent summer travel

Summer travel is strong even in the face of high airfares and room rates, with online travel agencies, airlines and hotels seeing a healthy demand this time of the year.

Despite airfares as high as 60-70% as compared to pre-Covid levels, there is an upward trend in bookings for domestic and international holidays, shared Aloke Bajpai, group CEO & co-founder, ixigo. He said, “People are willing to spend more on flights and hotels. Even February and March, which are weak months for travel, have seen unprecedented demand due to festive travel, and we expect even higher traffic for the summer season.”

Domestic and short-haul destinations are popular, with growth in demand 50-60% month-on-month, said Daniel D’Souza, president & country head, holidays, SOTC Travel. “Tier 2-3 cities are popular for short getaways, domestic cruises and spiritual travel to Kashmir, Himachal, Uttarakhand, Leh-Ladakh, North-East, Andamans, Goa and Kerala,” he said.

Rajeev Kale, president & country head, holidays, MICE, visa, Thomas Cook (India), added, “Despite the increasing overall costs by over 10% for travel, customers are willing to increase spends for longer stays and unique accommodations like private villas, havelis, tea estates and forts.”

There is preference for relaxed itineraries and the average room night per booking for April-June quarter is increasing for domestic packages. “We have seen a 54% increase in average room nights for domestic holidays. Relaxed itineraries have impacted average per-passenger spend as travellers seek experience-led travel,” said Rajesh Magow, co-founder and group CEO, MakeMyTrip.

Cleartrip launched a travel extravaganza in March, curating offers for popular destinations. “We have seen a 60% rise in traffic across flight and hotel categories. International hotel bookings from April to May spiked by 3.7X while bookings made in March spiked by 3X in comparison to the same period last year. For international summer travel from April-July, bookings have increased by 229.51% in comparison to last year. For domestic travel from mid-April to mid-July, bookings have increased by 9.09% in comparison to last year,” said Prahlad Krishnamurti, chief business officer, Cleartrip.

For foreign travel, Europe is the top destination as per Thomas Cook, with a surge of over 300% for the upcoming holidays, followed by Southeast Asia, Maldives, Mauritius and the Emirates.

Suitably, airlines like IndiGo are looking at higher demand and the DGCA has allowed it to operate more flights this summer at 11,465 weekly domestic flights — a 13.7% increase over the winter’s figure of 10,085. To cover upcoming summer demand, the carrier is planning to add 600 weekly flights, expand the network to 115 destinations from around 104 at present as well as launch Super6E fares on international routes. This includes extra 10-kg baggage allowance, free seat selection including XL seat, meal choice and priority check-in.

Vistara, too, plans to add more aircraft to meet surging demand. “We see a growing preference for direct, non-stop travel, beside demand for premium cabins,” said Deepak Rajawat, chief commercial officer, Vistara.

Etihad Airways is increasing frequencies on key routes from India, resuming services on the Kolkata-Abu Dhabi route, adding two daily flights from Ahmedabad and Chennai, and six more flights from Kochi per week. Salil Nath, GM, Indian subcontinent, Etihad Airways, said, “Passenger volumes have surged, with many families planning long-awaited vacations. We have launched an early summer sale too with attractive fares.”

The hotel sector, too, is logging strong growth across categories. Pushan Sharma, director – research, Crisil Market Intelligence & Analytics, said, “The average room rate (ARR) of premium hotels increased 13% on-year in fiscal 2022 and the figures for FY23 are estimated to be 19-21% higher at a decadal high of `7,500-10,000. The occupancy level is estimated to have increased from 50% in fiscal 2022 to 67-72% in FY23.”

The growth in ARR and occupancy in fiscal 2023 was because of improving domestic demand, including leisure, corporate and MICE events. In fact, demand for staycations is increasing as a form of revenge travel, with blending of business and leisure (bleisure) also observed.

“Last minute and impulse holiday plans will always bode well for hotels. Even the wedding season is extending well into May and June due to a number of auspicious dates concentrated in this period,” said Manish Tolani, vice-president & commercial director – India, Hilton.

Mahindra Holidays & Resorts experienced a booking occupancy of over 86% in March and is looking at 92% occupancy in April.

Family travel in India collectively made over `100 crore last year for Airbnb hosts, up by over 90% compared to pre-pandemic,” said Amanpreet Bajaj, Airbnb’s GM for India, Southeast Asia, Hong Kong and  Taiwan.

Even Foresee Aviation, a private jet and helicopter aggregator, has seen a spike in travel queries post Covid. Santosh Sharma, co-founder and CEO, said, “In May-July, we have a good number of bookings for both domestic and foreign travel. Interest has gone up by 40%.”