Domestic leisure to be strong even after overseas travel resumes: Experts

In less than a fortnight from now, as Indian skies open up for international flights, summer vacationers are likely to choose overseas leisure destinations over domestic ones. But that wouldn’t make the latter any less attractive or lose the price premium they have been enjoying over the last couple of years.
 

Temperatures are running high for those in the travel and hospitality business because they expect demand for both inbound and outbound travel to explode as vacationers head out to cooler climes during the peak summer months.
 

The domestic tourism market is 10 times bigger  than the inbound market, says Kapil Chopra, founder, The Postcard Hotel, an ultra-luxury hospitality brand. He points out that while a lot of Postcard’s regular guests will definitely go for a vacation to destinations like Europe, it won’t impact the business at home since the demand for its properties has been far greater than what it can service.
 

Postcard also expects to benefit from the inbound tourist. “We will be the first choice for inbound tourists,” he claims. Encouraged by the surge in demand, The Postcard Hotel has budgeted a 35 per cent year-on-year growth this summer.

 Cooped up in their homes due to the pandemic, domestic travellers flocked to popular leisure destinations in large numbers and also created new travel circuits, says Vibhas Prasad, director, Leisure Hotel Group. “Our continued focus on experiential luxury in the hills has ensured that it’s the preferred hospitality chain for high-paying customers,” he adds.
 

The share of domestic travel in the last two years rose to 96 per cent from 66 per cent in the pre-pandemic phase, according to Prashant Pitti, co-founder, EaseMyTrip, referring to bookings done through online travel agents.
 

“We believe there will be a huge surge with demand exploding in the months of May, June and July,” Pitti adds, pointing out that domestic travel will continue to be very strong even as some head out of the country to unwind.  He expects air fares to shoot up substantially as vacationers pack their bags.
 

The robust demand and limited supply will ensure that the average daily rates remain elevated and travellers will have to pay a premium much the same way they did during the winter break.
 

Like Chopra and Prasad, Khush Kapoor, chief executive officer, Roseate Hotels & Resorts, is also looking to make the most of the demand surge this summer. He, too, doesn’t expect demand to moderate for the domestic leisure locations. If anything, it would only head north, believes Kapoor. “There’s apprehension due to the ongoing war in Ukraine and the fear of pandemic. Nobody wants to travel overseas away from the family and home for long. Hence, domestic travel trend will remain strong,” says Kapoor.
 

Roseate has a strong order book for the months of April and May. “Our property in Rishikesh is already sold out for the season,” says Kapoor. Even corporate bookings by foreign travellers have started, he adds.
 

India has an inventory of a million rooms. Of this, the share of branded rooms is 16 per cent but that of branded rooms in leisure destinations is 4 per cent.

“The demand-supply mismatch is expected to continue till all the new inventories in the pipeline are ready,” says Nandivardhan Jain, CEO, Noesis Capital & Advisors. As a result, branded properties will continue to command a premium during peak seasons, he adds.
 

To make the most of this robust demand and plug the supply-demand gap, hospitality firms of all hues are expanding at leisure locations at an aggressive pace.
 

The Postcard has 23 properties under construction across India. “Every three months you will have a new Postcard opening,” says Chopra. Leisure Hotels, which has 29 properties in northern India, plans to add four more — one each in Uttarakhand, Bhimtal, Naukuchiatal and Mussoorie. It’s also in talks to set up new properties in Goa and Rajasthan. Roseate, too, is in talks with asset developers and is chalking out an expansion plan.
 

The major investments planned by the government in India’s road and rail networks, coupled with the privatisation of airports in smaller cities, will help improve the regional and last-mile connectivity to several emerging tourist places. This is set to encourage hoteliers to tap further into the underserved leisure segment, according to hotel consultancy HVS.
 

Meanwhile, after a hiatus of two years, travel and tour operators are going all out to woo Indians to overseas holiday destinations with attractive offers.
 

On Monday, Thomas Cook India and its group company SOTC Travel introduced the “Ultra Flexible” holidays plan that offers flexibility, choice and convenience at Rs 99,000. The eight-day tour package includes five days in Switzerland with the flexibility of choosing three days in France, Italy or Austria. Only those making the bookings by March 25 can avail of the offer.
 

Thomas Cook and SOTC’s internal data-consumer insights reveal that with the constant changes brought about by the pandemic, flexibility is a key traveller need, the company said in a statement. “We’ve removed all the restrictions that would typically come with such tours — so, no fixed departure dates or fixed departure cities, no minimum number of co-travellers and no fixed airline,” says Rajeev Kale, president and country head-Holidays, MICE, Visa, Thomas Cook (India).
 

Tourism boards of popular destinations in Southeast Asia, like Singapore and Thailand, are hosting roadshows and rolling out attractive travel packages for the Indian traveller. The lurking fear of the pandemic and geo-political instability notwithstanding, those planning a summer vacation seem to be spoilt for choice for now.