Tourism sector rebounds to pre-pandemic levels, here are factors driving growth

The travel and tourism industry is undergoing a paradigm shift as Indian travellers demand new and thoughtful experiences. Mainly the millennials who currently make up the fastest growing segment in terms of spending money on trips and exploring the fascinating world. This has fundamentally changed the behaviour of hospitality, travel and tourism companies that makes the millennials remain a travel-demanding generation in the upcoming year.

The recent India Travel Market Report by Phocuswright suggests – the total Indian travel market will continue its impressive growth to retain pre-pandemic gross booking levels of about USD 32 billion in 2023. The recouping of the travel industry is fuelled by exclusive deals and packages by industry players. They are successfully attracting a chunk of the market with innovative amenities and multiple authentic experiences.

Indian Millennials generating demand

After the baby boomers, the hardest push for vacations has been made by another category of big spenders in the market i.e. millennials. They are early adopters of not only technology but also experiences, exploring the top-range options – the highest of all generations. This drives the growth of the travel industry and a major chunk of it will indeed be driven by the Indian millennials.

“If we look a recent Morgan Stanley study highlights – millennials represent about 50% of the country’s workforce and more importantly, they earn more than 70% of the overall household income in India. To take a break from their hectic work schedule, millennials take over domestic vacations to relax their mind, treat and rejuvenate themselves. This makes the success of offers like flight upgrades, premium rooms and duty-free as they are always counted to be standing in the front of the queue.” say Ashish Sidhra, Co-founder of Alike.io.

As a result, post-pandemic pent-up demand in this largest traveller segment has driven the recovery in the travel market this year. While domestic travel made up the majority of millennial sojourns in 2022, the opening of international destinations and reducing foreign travel uncertainties are expected to drive travel market growth in 2023.

Driving the trend of sustainable travel

The climate and ecological crisis are deepening and millennials are one of the most conscious generations when it comes to protecting the next generation or the planet. Their rising environmental concerns have driven sustainable travel as a key driver of their travel decisions.

According to the American Express 2022 Global Travel Trends Report – travelling responsibly is of high importance for the Indian respondents as 94% stated they would take a 'greencation' and 93% are more likely to book travel with a brand that is committed to improving its environmental impact. These responses were the highest than their global counterparts.

“Basically Sustainable travel is a concept that implies responsible tourism, without harming nature. While it as a concept may not be the driver of travel market growth in India, it will surely be one of the primary deciders in where and on whom the Indian traveller spends their sought-after dollars. This will minimize the negative impact of tourism on the environment as millennials travel more thoughtfully and creatively.” adds Ashish .

With the accelerated adoption of technology trends in planning a vacation, millennials are packing their suitcases and roaming like digital nomads. They have rapidly become the fastest-growing travel generation, eager to attract brands and even become influencers in the domain. This creates a lucrative opportunity for the industry to leverage influencer marketing trends and allow travellers to share their real experiences in the most authentic content form.

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