Indians still prefer hotels over homestays

By Varuni Khosla

New Delhi: Travellers from tier-I cities are not only spending more on leisure trips but also travelling more compared with their counterparts in tier-II and -III cities, according to a report by global research, consulting, and mergers and acquisitions advisory, Videc.

The report, accessed exclusively by Mint, highlighted that homestays still have scope to grow in India.

The majority of survey participants (91%) said they stayed in a hotel, while only 10% of them booked all-inclusive packages, with 7% booking homestays, villas or bungalows.

Interestingly despite higher airfares, people booked well in advance with 69% of travellers buying tickets over two weeks ahead of departure date, while intercity bus is predominantly a last-minute arrangement.

The “Indian Traveler Behaviour and Insights Report 2023″ found that two-third of travellers travelled in trains, while 43% preferred flights, more so from metros and tier-I cities.

Virendra Jain, co-founder of Videc, said in the last two decades, travel has undergone a major transformation in India

“With a surge in expendable income, India’s per capita GDP is projected to increase 10x from $460 in 2001 to $4,000 by 2030, so more people are budgeting for leisure travel in their lifestyle spend. India will have a working age population of one billion by 2030. As per reports, this means nearly 25% of global incremental workforce over the next decade will come from India. This means there will be a strong increased consumption power, that will also be reflecting in discretionary spending,” he added.

While at present, domestic travel has taken precedence, 79% of those surveyed for the report said they were planning a domestic trip. Top international destinations were, as expected, Thailand, the UAE, Singapore and Malaysia, followed by Australia, the Maldives and Indonesia.

Surprisingly, travellers from India’s tier-I cities were just as likely to be first-time travellers as those from tier-II. Around 81% of Indian travellers from tier-I cities have either travelled or intend to travel internationally for the first time this year, similar to the 79% from tier-II cities. In contrast, 98% of tier-III city travellers were venturing abroad for the first time, the report said.

While travel bookings are gradually moving online, many, nearly half of all the travellers did report that they were still not booking online for one simple reason: that they preferred to pay in cash. There was also a sizable number, 32% of travellers looking to buy the services from a ‘trusted’ offline travel agent. Many were also just not comfortable booking their travel online because of risk of fraud and finding it cumbersome to book their travel online. Indians are yet to shell out a lot to travel though. On an average, travellers across ages said they spent ₹48,000 including airline or rail and bus tickets; lodging; cars and cruises and destination activities for travel over 100 kilometres in the past 12 months. But those in the age group of 45-54 were the highest spenders, exceeding the average at ₹58,000. Yet again, tier 2 city travellers in general spent almost as much for travel at ₹52,000 and ₹ 53,000 respectively. This cost went up dramatically between international and domestic travel. While international travel commanded a rate of ₹1.29 lakh, domestic travel spends were just ₹27,000 for the same set of 1,500 people surveyed. The survey focused on about 1,500 travellers over a month-long period between 1 June and 5 July 2023.

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