With multiple demand drivers, bus travel segment set for rapid growth

India’s bus travel segment is experiencing a period of rapid expansion, driven by various factors such as improved road infrastructure and changing travel preferences.

Industry players and analysts are optimistic about the sector’s growth potential in the near future, with projections indicating that the inter-city bus market could reach ₹688 billion ($8.6 billion) by FY26, according to travel analytical firm VIDEC.

Virendra Jain, co-founder and CEO at VIDEC, highlighted the significant investments India is making in physical and digital infrastructure, including the development of national and State highways, as well as last-mile connectivity.

With an estimated value of ₹539 billion ($6.7 billion) in FY23 and 19 per cent online penetration, the inter-city bus market in India is highly fragmented, with over 4,500 private bus operators and more than 25 State road transport corporations offering nearly 100,000 daily services and routes.

online agents

Singh, an industry expert, explained the dominance of online travel agencies (OTAs) in the fragmented inter-city bus market. With their expertise in content aggregation, digitisation, productisation and providing superior booking experiences, OTAs hold an 82 per cent share of the indirect distribution in the online inter-city bus market at present.

This channel is expected to continue contributing to the growth and adoption of online bus bookings. Several factors have contributed to the surge in bus travel demand in India. First, airlines are operating at nearly 90 per cent capacity, resulting in high airfares, especially for last-minute bookings. This has driven many travellers to choose bus travel as a more affordable and accessible alternative, particularly for spontaneous trips. Furthermore, train travel has been plagued by wait-listing issues, with over 2.7 crore passengers being denied train travel in FY23.

Ac buses

Recent data from Cleartrip indicate that a substantial number of travellers prefer air-conditioned buses, accounting for 60-70 per cent of bookings. Moreover, the popularity of sleeper buses has also increased, with 70-80 per cent of travellers opting for overnight journeys.

Read original story on TheHinduBusinessline.