What will 2023 bring for travel & hospitality

The travel and hospitality sector is on the road to recovery, with domestic tourism touching pre-Covid levels, and high interest for international travel in the new year

  • Published:
  • 26/12/2022 02:37 PM

Indians on a kayaking holiday in the Maldives, a magnet for sustainable travel where accomodations are eco-friendly Image: Shutterstock

Rapid vaccination drives and easing of Covid-19 restrictions enabled the travel industry to bounce back stronger in Q2 of 2022, with many saying it is the year the sector took a rebirth.

While domestic tourism has touched pre-Covid-19 levels, inbound tourism, ie, foreigners travelling to India, continues to be affected, says Rajiv Mehra, the president of Indian Association of Tour Operators. “By March 2023, we will be at one-third the level we used to be before the pandemic.” He adds, “India has just opened up e-visas to UK nationals again, so that’s a big relief.”

By the end of the year, the travel industry is expected to touch the $14.92 billion mark, according to Rikant Pitti, co-founder of online travel aggregator (OTA), EaseMyTrip.

“We are going to get 66 new airports in the next decade. From 85 million domestic flyers in FY22, the number is going to shoot up to 330 million in FY32. The industry will grow 3.5 times in the next few years,” he says.

Hotels and resorts, like airlines, saw an improvement in business as well. At IHG Hotels and Resorts, for instance, owing to the growing demand for domestic leisure travel, early return of business travel, weddings and conferences, the business did significantly well, informs Sudeep Jain, MD, South West Asia.

Check Out: Rewind 2022: Year in Review

In Q2 2022, IHG reported a jump in occupancy levels from 60 percent in Q1 to close to 75 percent in Q2 2022.

It was a similar case at Conrad Bengaluru. “We have touched high occupancies this year, close to pre-pandemic level, but 2023 will be a crucial year as we expect a higher surge in overall business from both domestic and international markets,” says Rajan Malhotra, commercial director.

Also read: On offer: Here's how online travel portals are cashing in on the festive season

Travel Trends 2022

If 2021 was the year of work from anywhere, 2022 can be termed as the year of the bucket lists, says Aloke Bajpai, group CEO and co-founder of OTA, Ixigo. “Travellers are keen on bigger, grander, and more adventurous escapes,” he says.

Spiritual hubs were also in demand this year. Compared to 2021, cultural destinations like Varanasi saw more than 50 percent rise in search queries for train travel this year, while Tirupathi in Andhra Pradesh witnessed one of the highest comebacks with more than 200 percent increase in train search queries for summer travel in 2022, according to data by Ixigo.  

Local and exploratory travel experiences also gained traction with quick weekend getaways and staycations. Mindful travel, however, was the flavour of the year. As per a global study by OTA Booking.com in April 2022, Indian travellers show an inclination towards more responsible tourism, with 94 percent of the country’s respondents confirming that sustainable travel is important to them, and 88 percent saying they would be more likely to choose a sustainable accommodation. Travellers are hence choosing less-crowded destinations, are mindful of reducing food wastage, single-use plastic, and opting for public transport.

Another November report by OTA Kayak had similar findings. About 43 percent of Indian respondents stated that sustainability will be one of the main criteria for their summer holiday in 2023.

“Traveling responsibly and looking out for sustainable accommodations and travel options was one of the most important trend and a great behavioural change we have witnessed in the past two years,” says Malhotra of Conrad Bengaluru.

Scope for international travel

Compared to 2019, flight prices have increased by 23 percent for international routes, and by 66 percent for domestic travel, according to Kayak. However, Indians don’t seem to be deterred. “We have witnessed an increase by 30 percent compared to 2021 in pre-bookings for international flights for 2023,” adds Pitti of EaseMyTrip.
With airline capacity increasing, and affordability options such as no-cost EMI, buy-now-travel-later booming, international travel will continue to get a push, says Karthick Prabhu, head of strategy at Cleartrip.

“So far, international travel recovery is about 75 percent compared to pre-Covid levels. We are bullish that this trend will continue,” says Prabhu, adding that the interest for destinations such as Dubai, Bangkok, London, Singapore, and Pattaya continues to be high.

Bajpai of Ixigo believes that international travel is set to further pick up owing to a substantial decline in active Covid-19 cases and relaxation of travel advisories.

Also read: Why convenience is key for post-pandemic travel

Travel in 2023

The industry has made its revival sooner than anticipated from the Covid-19 burn, says Pitti. “Despite the price hike, people are willing to put aside their travel budget. This shows the future of the industry.”

Prabhu of Cleartrip anticipates that the number of vacations taken per year will increase, while wellness tourism will be another strong trend that will continue in the coming year.

Travel in 2023 is going to be about gaining unique experiences, feels Ixigo’s Bajpai. “We expect people to go beyond regular requirements, pushing their limits in terms of properties they book, places they want to experience, they hospitality they want, and more.”

Watch here: Rewind 2022: Year in Review All Major Events That Happened This Year

The year will be a big year for Indian travellers, as per Kayak’s search data. Flight searches from airports in India (between April and November 2022) have increased by 204 percent compared to 2019 levels. For international flights, searches have increased by 168 percent.

“India is a dynamic and the most promising market in the entire APAC region. In terms of trends, it’ll be too soon to pre-empt. Though one thing that is key to the Indian market is its young population and their eagerness to travel for experiences and enrichment,” says Sakari Romu, general manager, Finnair.

Last Updated :

December 28, 22 02:54:52 PM IST