Domestic Travel and Hospitality, A Look at The Near Future

With international tourism stalled, and initiatives from the government to revamp Indian tourism can be the tailwinds for the troubled domestic travel and hospitality industry.


Since the past year, the intermittent imposition of mobility restrictions due to rising covid infections has ravaged the domestic travel and hospitality industry in India.  

The wreckage in the hospitality industry owing to the pandemic can be well understood from the numbers revealed by the Federation of Hotel & Restaurant Associations of India (FHRAI) which says that the Indian hotel industry has been hit with a loss of more than Rs 1.30 lakh crore in revenue for the fiscal year 2020-21.

Moreover, revenue losses in the hotel segment are staring at a grim scenario as according to the Hotel Association of India (HAI) more than 40 percent of hotels are shut or are on the edge of closure that in the process has impacted 70 percent of the overall jobs.  

The numbers on damage do not end here. 

The entire value chain spanning from hospitality to tour guides and agents will be suffering losses worth $65.67 Billion, with the organised sector alone to lose $25 billion according to a joint study by industry chamber CII and hospitality consulting firm Hotelivate. 

The Federation of Associations in Indian Tourism and Hospitality (FAITH), as soon as the lockdown was imposed had projected industry’s losses in FY21 will account to ₹15 trillion. 

With the above-mentioned distressing statistics of the travel and tourism industry accounting for 9.2 percent in GDP and employing around 8.1 percent, what will the future look like? 

What are our Travel Biggies Doing to Survive? 

Make My Trip- India’s largest online travel agency’s revenues have fallen to a whopping 68 percent y-o-y in 2021 to $163 million and has reported a loss of $56 million loss. 

With most corporate events and meetings happening virtually, corporate travelling is subdued that accounts for 30-35 percent of its revenues. 

Make My Trip believes that it is the fear of contraction that is holding back else demand is there. Over more than a year of being caged at home, boredom and monotony have crept into people’s lives. With international tourism currently at a standstill, it presents the opportunity for domestic tourism to grow. The behaviour of revenge travel will emerge among leisure travellers that can help in revival. 

Make My Trip and Goibibo in the coming 12 months plans to capture the small-town travellers. It will be increasing its inventory by listing more budget hotels. 

Hospitality chain Oyo is stressing adopting cutting-edge technologies like data science, big data, and artificial intelligence that will play a key role in strengthening the operations of the travel and hospitality sector. In 2020 OYO, introduced two tech-based products for its partners. 

Tariff Manager: a self-serve pricing tool that allowed their partners to set prices on their own adhering to guidelines. This product reduced the pricing ambiguities of hotel partners by 40 percent.  

OYO Secure:  a prepaid wallet-based system that lets partners deposit a certain amount in a secured manner.  

Coming to Ginger Hotels, several standalone hotels are partnering with them to leverage their popularity and public perception to drive sales. 

Similar to OYO’s emphasis on technology, Yatra.com’s slew of tech initiatives will include expense management software, Artificial Intelligence-based smart space and safe space solution ensuring contact tracing at a workspace, and an online platform for consumable sourcing for hotel partners. It is also working with NanoTech Company – Neo Dot that can identify body temperature in crowded spaces with a colour change.

Most travel and hospitality startups will introduce technology to offer convenience to customers and hotel partners and unlocking new travellers.

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According to ICRA, the apparel businesses to generate revenues like pre-covid times will have to wait till 2023.

Future of Domestic Travel and Hospitality in a Post Pandemic World 

The domestic travel and hospitality industry is expected to rebound with more people getting vaccinated.

However, the apprehensions of getting contracted after vaccination will persist and therefore in the post-pandemic world, the emphasis on technology to offer a seamless booking and stay experience and bio-bubble level hygiene adhering covid protocols will be a must for the travel and hospitality sector. 

To encourage leisure travellers to travel to domestic destinations government has launched the Swadesh Darshan scheme, where 77 projects have been sanctioned worth $ 863.60 million. the Government has allotted Rs. 1,200 crore for the development of tourist circuits under Swadesh Darshan for the Northeast.

The Ministry of Tourism has launched the NIDHI portal to understand the geographical spread of the hospitality sector, its size, structure, and existing capacity in the country. It will act as a common data repository for the Ministry of Tourism, State Departments of Tourism and Industry and will enable Central and State governments to deliver better support and services including policies and strategies for the tourism sector.

Apart from government initiatives, unique consumer trends such as staycation, short trips, and exploring driveable destinations from urban locations are likely to emerge that can drive domestic travelling.

DU Desk
DU Desk
Stories from DU Desk are the collective efforts of our in-house authors, guest authors and subject matter experts who collate and distill their ideas and thoughts to bring out actionable insights for our readers.

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