Why Domestic Travel Looks More Promising In a Post-Pandemic World

With staycations, workcations, and work-away-from-home in vogue, one might say there is an uptick in domestic travel

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It seems that the winds of change blowing in the aftermath of the pandemic have started leaving discernible patterns in the sand for the travel and hospitality industry. The industry is already servicing a latent demand for leisure travel. Hotels and resorts have started hosting people seeking weekend breaks with families, friends and small community groups. Plus, with staycations, workcations, and work-away-from-home in vogue, one might say there is an uptick in domestic travel.

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Is this trend here to stay and if so, how well does it augur for the hospitality and travel industry? To understand this, one must look at the trends shaping the industry in other countries.

The global resurgence of domestic travel

While the international outlook for the travel and hospitality sector still looks dismal, China and Europe are seeing a domestic recovery in both the leisure and business travel segments, even before a vaccine is available at scale. Similarly, the US is starting to see recovery, thanks to its strong domestic traveler base and limited lockdown restrictions.

According to a McKinsey report, the US travel appetite for domestic destinations versus overseas locations has increased to more than 90 per cent. The report also reveals that China’s travel and hospitality industry is experiencing a good recovery, buoyed by domestic travel. Occupancy, average daily rate (ADR), and revenue per available room (RevPAR) are seeing continuous improvement, implying the demand recovery is steady. All this is driven by strong leisure demand for vacation and recovery of domestic business travel.

International travel will take longer to resume because of government regulations, protocols and ever-changing quarantine rules and policies leading to mental discomfort for travelers.

India’s domestic travel market if harnessed properly can turn the tide in favor of the industry

According to estimates by an aviation consulting firm, international traffic in India is only expected to recover 35-40 per cent of the financial year 2020 levels, while domestic traffic in the financial year 2021-22 is expected to reach 70-80 per cent of 2020 levels. This clearly shows that the scales may be tipping in favor of the domestic travel market.

In 2018, as per a ministry report, India had over 10 million inbound travelers and about 28 million outbound travelers. Now, even if 30 per cent of these outbound travelers stayed back in India every year and explored the country, it would add a significant 8.4 million domestic travelers to the market. If this market is harnessed properly it would tremendously boost high-end domestic tourism. 

 

If this domestic market potential is realized well, the sheer size of India's domestic market will help the sector bounce back in 2021.

 

Backpackers or ritzy vacationers: India has an option for everyone going vocal for local

In India uncertainties still, prevail though the vaccine is out. COVID-19 cases continue to ebb and flow. In times like these, most travelers would agree it is better to be on one’s home turf. These people would stand to benefit by taking advantage of the huge discounts and lucrative offers being put out by the hospitality industry that has been starving for business for almost a year.

India is endowed with such a diverse topography within its borders that it can rival continents. From mountains to beaches, rivers to plains, India can serve up a vast platter of unexplored destinations and activities to satiate any wanderlust.

Domestic travel can resuscitate the travel and hospitality industry

Estimates show that the average Indian tourism spend is almost four times more than even the Chinese, the biggest volumetric influence of global travel and tourism. With the pandemic still raging, millions of Indians who would have otherwise planned to vacation overseas are largely restricted to domestic travel. Suffice it to say that boosting domestic travel may be the best option left to the government to revive the ailing travel and hospitality industry.