Travel & Hospitality industry bullish on recovery in the post-pandemic times

Have the skies fully opened up in the post-pandemic period? Will travel be the same it was in the pre-Covid times? Although the variants of Covid-19 are still doing their rounds world over, the people have lost their earlier apprehensions about the virus and want to hit the road and skies to visit their favourite holiday spots. The aggressive vaccination drive followed by many countries has helped in managing situation. Many countries have begun cautiously relaxing travel restrictions and reopening their borders. For some of the countries for whom foreign exchange is big source of revenue are taking all precautions and safety to keep the tourist happy when he or she visits. In India travel companies like Thomas Cook India & SOTC are maintaining strict protocols on the safety aspect to restore customer confidence in travel on the vaccination front through their TravShield program.

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A McKinsey survey reveals traveling to be the second-most-desired activity among respondents (in first place: dining out). In the United States, air travel has hit two million daily passengers, closer to the prepandemic level of around 2.5 million than to the low of around 90,000, in April 2020. Hotel reservations and rental-car bookings are surging and there are long queues at the airports.

According to a report by travel and hospitality technology platform OYO, sustained momentum is now visible in business travel with a jump-start in business activities across all industries since January 2022.Within the business travel category, the three biggest constituents are corporate employees at 29 per cent, small business owners at 17.7 per cent and government employees at 12.3 per cent.

With no schools and colleges operational for the last two years the number of days available as summer vacation was restricted. But with the monsoon setting the short breaks to visit places like Goa, Mahabaleshwar and Puducherry is on the increase. Monsoon get aways has always been a routine feature for the many but the last two years even that came to a grinding halt. But this year the momentum looks better as attractive discounts are being offered by the hotels. The domestic and international destinations is also seeing some movements but mostly from the young professionals/millennials and couple segments. The pent-up demand and the revenge travel is what will drive traffic to the tourists’ locations. Many hotels are running special monsoon packages to woo traveller’s short getaway type holidays.

It has been a very bumpy ride for the travel industry and both the airlines company, hotels and travel operators are making up for the lost time. Similarly, the travellers are also making for the lost time. According to some online research many potential travellers are already searching for the best deals to go to their favourite destination. With the greater air connectivity from many cities to more international destinationshave also pushed some of the first-time travellers to plan their holidays to places like Bangkok, Malaysia, Indonesia and Singapore. Since these are not very far off most young couples plan a quick holiday to these destinations.

According to Abraham Alapatt, President & Group Head, Marketing, Service Quality, Value Added Services & Innovation – Thomas Cook (India) & SOTC, with easing of restrictions coupled with strong pent up travel desire, we witnessed a rise in demand of between 30-40% of our pre-pandemic levels. Travel sentiment is at an all-time high among families, young professionals/ millennials and couples/DINKS; also, revival from our corporate MICE groups.

Adding further, Alapatt said that closer to home easy visa favourites are seeing growing demand - South East Asia’s Singapore, Thailand, Indonesia, Malaysia, Vietnam and Cambodia; Maldives, Mauritius, Turkey, Egypt, USA (for visa holding customers) and Australia. Despite visa challenges, we are also witnessing strong consumer demand for Europe (Switzerland, France, Italy and Austria). On the domestic front, popular destinations include Kashmir, Leh-Ladakh, Himachal, Uttarakhand, Goa, Andaman, Kerala, Pondicherry and the North-East.We also observed thatdespite challenges like visa approval process for Europe, USA and UK, supply side constraints, uptick in airfares; our overall business is on strong recovery mode and we are witnessing continued acceleration in our holiday business.

On the brand promotion and campaign frontour influencer marketing with renowned influencers have been very successful. In terms of traditional media for our ads, we prefer print and ground activations via Holiday Carnivals. 

To ensure affordability/ viability in our overall holiday pricing, we have also introduced special deals that offer great value proposition like Buy One Get One Free, Early Bird offers and Travel Now Pay When You Return at Zero processing fee; cash back offers through bank partnerships. We have also partnered with prominent airlines such as Vistara and Emirates to offer attractive air-inclusive holidays.

The industry is witnessing strong recovery, with demand bouncing back for both domestic as well as international travel that is mainly being driven by VFR (Visiting Friends & Relatives) and leisure travel segments. Deepak Rajawat, Chief Commercial Officer, Vistara, remarked, “In fact, we are now operating more flights on our domestic routes vis-à-vis pre-pandemic. To cater to the increasing demand, we have scaled up our frequencies to daily flights, to key international destinations including Singapore, London, Bangkok, Dubai, Kathmandu and Dhaka. We also announced the addition of Jeddah to our growing international network starting 2 August 2022 and bolstered our connectivity to Thailand with 5x weekly flights from Mumbai. However, the continuous rise in ATF prices, coupled with falling value of rupee against dollar and high taxation have been putting immense cost pressure on all the players, including Vistara.”  

He further added that, “Our approach to marketing and advertising is to stay relevant yet unique while actively keeping our key audiences engaged with a range of interactive campaigns. One such example is #TheSoundtrackOfTravel – a unique melody that aims at rekindling the joy of travelling. Additionally, we are proud to become the first Indian airline to offer special ‘wellness-focused’ IFE content in association with Shyft, and partner with the home-grown luxury brand, Forest Essentials for thoughtfully curated amenity kits for business class fliers on long haul flights starting 1 August 2022.” 

Manoj Agarwal, Head – Asset Management, InterGlobe Hotels, noted that the year 2022 started on a low note due to the third Omicron wave, but industry saw a sharp recovery from March onwards. Pent-up demand from all business segments except inbound was observed which led to green shoots for the industry.

The industry witnessed some of its best performing months this year having already surpassed the same month pre-COVID performance levels of 2019. This was largely driven due to decline in COVID cases, resumption of international flights from March 2022, strong leisure, wedding demand and gradual return of relocation corporate travel. However, I think that it’s too early to declare that tourism industry is back to pre-pandemic times and the real test would be Q3 of this year which is usually considered as the lean season for Indian hospitality sector.

Agarwal further pointed out that Goa emerged as one of the most sought leisure destinations in India which was evident by the occupancies achieved in the last year and a half. Furthermore, destinations like Shimla, Rishikesh, Mussoorie, Nainital, Manali etc. which are at drivable distances from Delhi, Haryana, Uttar Pradesh & Punjab were the preferred getaway destinations in the North. A similar trend was observed in other parts of the country with experiential travel helped homestays and boutique accommodations capitalize on their occupancies and revenues.

We perceive that uncertainty around COVID and resulting restrictions hampering the business continuity /momentum is one of the biggest threats at this moment. Through our many distribution channels, our efforts have always been to maximize direct bookings and trying to connect with our guests and end users. We aim to leverage our loyalty base and explore technology, focused public segment campaigns to grow this segment.

Himank Tripathi, President- External Affairs, EaseMyTrip, opined that positive sentiment towards travel is expected to continue and EaseMyTrip anticipates significant travel growth in addition to the considerable pent-up demand. We have crossed the pre-pandemic numbers and the number of bookings is still increasing month over month.

He further pointed out that some of the most popular international destinations that travellers are exploring is places like, Maldives, Dubai, Thailand and London. For the domestic market, Himachal, Rajasthan and Goa are some of the most favourite destinations. Our expectations from the travel and tourism industry are at an all-time high. People have positive sentiments towards travelling and that is enabling the industry to revive quicker than anticipated.

The industry is still recovering from the pandemic and now the risen ATF is also posing a concern. However, on the other hand, the travel sentiment is high and they are continuing with their travel plans. At EaseMyTrip, we don’t believe in extravagant marketing spending and would like to stay transparent and pass on the benefit to our customers and offer genuine pricing.