India’s travel market to be $48 bn by 2020: Google, BCG report

Indian passenger travel market is projected to grow at 11-11.5 per cent to $48 billion by 2020 with the biggest contributor, air travel expected to grow at 15 per cent to $30 billion. Hotels will grow at 13 per cent to $13 billion by 2020 while railways will remain $5 billion. This was revealed in a report on the growth opportunities in the Indian hospitality market over the next four years, released by Boston Consulting Group (BCG) and Google India. The report titled, ‘Demystifying the Indian Online Traveler’ charts the decision making journey of the Indian traveler and provides insights on the potential growth opportunities for travel businesses till 2020.
Additionally, as more people come online, smartphone penetration increases and use of digital payments goes up, the report estimates that India’s online hotel market will grow to $4 billion with 31 per cent penetration at a CAGR of 25 per cent.

Speaking about the key findings of the report, Vikas Agnihotri, Industry Director, Google India, said; “India’s domestic travel market is on an acceleration path. One of the key findings of the report is that by 2020, one in three hotel rooms will be booked online – a clear indicator of the growing importance of digital in travel research, planning and booking. There are several actionable insights for domestic online travel players including the role of mobile and the level of curation and personalisation that Indian travelers are looking for.”

Demystifying the travel planning journey of the typical Indian consumer, the report shows that for many Indian consumers, a vacation is an event planned in advance as opposed to being an impulsive purchase. Consumers typically spend 46 days on average planning their trip. They spend 49 minutes online on their travel research and visit as many as 17 touch points during their booking journey. However, it is interesting to note that the length of each online session is less than 3 minutes, due to the ubiquity of mobile. Through their journey, Indian travelers tend to move back and forth across different online channels, checking availability, comparing prices and assessing connectivity.