The report finds that the Indian travel market is still dominated by travel agents whose role increased significantly during the Covid era.
Bengaluru, India – According to the latest report “Travel market in India” produced by RedCore – The branch of RedSeer that focuses on start-ups, India’s travel market was around $ 75 billion in FY2020 and is expected to exceed $ 125 billion by FY27. The travel market represents both domestic travel, inbound and outbound travel by Indians.
Noting the impact of Covid, the report finds that the travel market has declined significantly in FY21, but the recovery is expected to continue in FY22 and expects to increase in recent years as well. years because of pent-up demand.
The Indian travel market is dominated by ~ 300,000 travel agents who account for the largest share per booking channel of ~ 52% and the role of agents has grown significantly during the Covid era.
Vacation packages – $ 17 billion, autonomous flights – $ 10 billion, and autonomous hotels ~ $ 5 billion make up the majority of the agent booking market, while taxis, intercity buses and railways contribute the remaining ~ $ 6 billion. The report finds that there is a lack of players operating in the package segment, who could organize the package according to the customers’ needs. Currently, most agents develop their own packages in partnership with tour operators and destination management companies.
While B2B flight booking is dominated by large B2B portals such as TBO, Akbar, Riya, etc., there is a trend towards the creation of next generation technology platforms that are developing for travel agents and businesses. help generate demand while providing B2B booking options. Agents are expected to cover the over $ 65 billion travel market by FY27. Given the immense potential, the agent market has garnered renewed investor attention with companies like TravClan, Pathfinder are raising funds to help travel agents and travel planners rebuild their businesses after the pandemic.
“Travel to India is still heavily dependent on agents. Agents not only offer convenience and confidence, but are also competitive with direct booking. They represent more than 50% of the travel market share and should maintain this share in the years to come ”, noted Anuj kumar, director at RedCore.
India’s air travel market was valued at around $ 20 billion (domestic + international) in FY20, and is expected to double in size by FY27. This growth will be driven by improved airport infrastructure and increased access to passports.
~ 65% of air travel by value is booked through agents, while the rest is the B2C Online channel. During Covid, travel uncertainties including testing, change of travel date, travel delay due to restrictions motivated travelers to take the agent’s route to complete the ticket reservation.
By FY 27, the agent share is expected to be around 60%.
In addition, the size of the hotel market in India, including domestic, inbound and outbound, was approximately $ 32 billion in FY20 and is expected to grow to approximately $ 52 billion by fiscal year. 27. Agents dominate again with a share of around 45% per channel, which is expected to hold up through FY27.
RedCore estimates that there are around 300,000 more travel agents in India. The top 750 agents with 3-4 cr INR in revenue per month capture around 12% of the agent travel market. These agents mainly focus on air travel and have connections with businesses.
These are followed by around 60,000 medium-sized agents who do an activity of around 20 lakh INR per month. They focus on selling vacation packages. These agents capture more than 50% of agent market share. The remaining ~ 35% market share of travel agents is captured by a long chain of around 250,000 small agents.
Customers prefer to make travel reservations through agents as the complexity of travel increases. 80% of international air travel and international pleasure travel are booked through agents. Agents are expected to cover a market of over $ 65 billion by fiscal 2027
International travel market
The report also talks about the SEA (Southeast Asia) and GCC (Middle East) travel market.
SEA – The travel market for FY20 has been estimated at around $ 80 billion and is expected to reach $ 105 billion by FY27. Indonesia, Singapore, Thailand and Malaysia are the main markets which stimulate the tourist flow in the region. Travel bookings in the region are dominated by agents.
GCC – The travel market for FY20 was estimated to be around $ 70 billion and is expected to grow to about $ 90 billion by FY27. UAE and Saudi Arabia together account for over 70% of this market. Travel bookings in the region are dominated by agents. KSA vision 2030, Dubai Expo and FIFA World Cup in Qatar to drive the future growth of the travel market.