Indians’ appetite to spend on travel & vacations has increased by 10-15%: Rajeev Kale

The surfeit of holidays in the latter half of the year usually triggers a wave of travel, especially among the Gen Z and millennials, who explore a plethora of existing travel options and packages – be it weekend gateways, short trips, international destinations or lesser-known tourist destinations within India.

The travel and tourism industry in India is estimated to garner revenue of around $22.30 billion in the year 2024 as per Statista with a CAGR of 8.87% between 2024 and 2029, resulting in a market volume of nearly $34.11 billion by the year 2029. Among these, package holiday market occupies the largest share and is predicted to reach a market volume of around $9.83 billion in 2024 with the total number of package holidays market users being 118.10 million by 2029. User penetration is estimated to be 7.4% in 2024, which is estimated to rise to 11.8% by the year 2029. Moreover, online sales are estimated to generate around 60% of the revenue in the travel and tourism market in India by 2029. Average Revenue per user is predicted to be $209.70.

The travel and tourism market in India at present has a focus on fostering sustainable and eco-friendly tourism. In India, spiritual tourism is on the rise with ‘travel now, pay later’ options quickly gaining popularity with an increase in demand of around 2.5x in comparison to the last year. The bookings for destinations such as Thailand, UAE, Maldives, and Singapore have increased by around 33% in comparison to the past year as per sources. Along with this, there is a growing emergence of solo travel.

Established in the year 1949, SOTC Travel Pvt Ltd operates across travel segments such as business travel, leisure travel, and others. It is a step-down subsidiary of Fairfax Financial Holdings Group that is held through two organizations – Thomas Cook (India) and its subsidiary Travel Corporation (India). SOTC provides customized holiday packages along with corporate tours and MICE (Meetings, Incentives, Conferences & Events) packages along with SOTC Trade Fair Tours.

In conversation with Adgully, SD Nandakumar, President and Country Head - Holidays and Corporate Tours, SOTC Travel Ltd, speaks about the travel trends in India during the extended festive period as well as during the year-end festivities, spends trends in the travel and tourism industry, regional marketing initiatives, strategies to give domestic tourism a boost during peak season, and more.

What is your marketing/ advertising budget for the festive season in 2024? What percentage increase (or decrease) is it compared to the previous year?

In response to the rising demand from families and group travelers, we have increased our marketing spending by approximately 25% compared to last year across both digital and traditional platforms.

Given the increasing fragmentation of media consumption, how are you allocating festive ad budgets across different platforms?

Our marketing strategy blends conventional and digital mediums, complemented by SOTC customer connect initiatives, along with hyper-local campaigns in each region across major metros and Tier 2 and Tier 3 cities, providing easy access to book holidays for our customers.

Could you share your regional marketing initiatives? How do you use platforms to highlight regional experiences and boost domestic tourism during peak seasons?

At SOTC, we take pride in being a homegrown Indian brand and recognize the importance of connecting with diverse regional travelers across the country. By focusing on regional India, our messaging connects with diverse travelers, positioning SOTC as their preferred travel partner.

Our ads engage consumers with fun conversations and cultural narratives, tailored to resonate with specific regional sentiments for deeper connections.

We recently launched a campaign featuring six regional films in six key regional languages – Hindi, Marathi, Tamil, Kannada, Gujarati, and Bengali, that emphasize seamless travel planning and individual preferences. Each of the films has featured young couples from the Company's key markets; capturing the essence of the respective region along with global aspirations. For example, the West Bengal film features passion for football, Maharashtra with cricket, Gujarat with business, Tamil Nadu with education, Karnataka with technology, and North India with fashion. Despite their diverse holiday dreams, all the couples share one common choice of booking with India’s favourite travel partner SOTC. This highlights that SOTC understands the complexities of holiday planning while catering to the varied regional preferences of its customers.

Significant evolution among Indian travelers: Rajeev Kale

Adgully also caught up with Rajeev Kale, President & Country Head – Holidays, MICE, Visa, Thomas Cook (India) Ltd, who shares his observations on the overall consumer and market sentiment during the festive season this year, what forms the core of Thomas Cook’s marketing strategy, and more.

What are your observations on the overall consumer and market sentiment during the festive season this year?

Indians are shifting focus from traditional home-based ceremonies to traveling with family for fun and bonding, while also discovering favourite and new destinations. This trend reflects a significant evolution among Indian travelers. With school holidays coinciding with major festivals like Diwali, families are seizing the opportunity to travel. In addition to families, including multi-generational families, young working professionals are combining festive holidays with weekends as a welcome break to relax and celebrate. Indians are also opting for longer vacations, from the traditional 3 days to 6-15 days. The appetite to spend has increased by 10-15% YoY.

Reduced visa restrictions have significantly boosted travel bookings to closer-to-home and long-haul destinations. Our data indicates increased interest for countries with visa-free, easy visa, and e-visa options such as Thailand, Malaysia, Indonesia, Azerbaijan, Mauritius, Maldives, Bhutan, Sri Lanka Nepal, and Fiji. Travelers are now more inclined towards short getaways, like weekends and extended festive holidays, due to the ease of obtaining visas.

To further inspire travel demand, we are offering exclusive discounts on our festive tours, encouraging travelers to embrace this season as a time for discovery, relaxation, and celebration.

What formed the core of your festive marketing strategy this year?

Our festive marketing strategy was centered on showcasing newer and unique travel experiences that inspire Indian travelers to explore a wide array of destinations and experiences such as the vibrant fall colours of Autumn season across Europe, Border Gavaskar Series special tours in Australia, witnessing Northern Lights in Norway, Cherry Blossoms in Japan, as well as iconic celebrations like New Year’s events worldwide, Christmas markets, and enchanting white winter landscapes.

To enhance accessibility, we are presenting these differentiated offerings at attractive prices, supported by flexible payment options like low-cost EMIs and special discounts through tie-ups with banks, in addition to our standard festive discounts. This approach allows our travelers to celebrate the season with enriching travel experiences that are both affordable and aligned with their aspirations.

What was your campaign strategy for the festive season?

We had a digital and social-first approach for our festive season messaging. This also involved some amount of educating, updating, and creating awareness amongst prospective customers to spark interest and convert bookings. We also engaged with influencers to create conversations about these experiences to further enhance visibility and engagement. Additionally, our loyalty program played a key role, helping us connect with existing customers to encourage repeat bookings.

User-generated content (UGC) is central to our strategy, serving as a powerful medium of advocacy that helps prospective customers envision their own journeys with Thomas Cook.

We have also married online discovery with branch visits for customers, making it easier for customers to explore options digitally and then receive in-person guidance at our branches to finalize their holiday plans.