Representative Image
In a rapidly evolving global landscape marked by geopolitical tensions, economic uncertainty, and shifting traveller behaviour, India’s travel and hospitality ecosystem is once again being stress-tested. A recent industry panel featuring leaders from Radisson Hotel Group, Amadeus, InterGlobe Air Transport Ltd., and Air India offered a grounded, data-led perspective on how aviation, hospitality, and travel distribution are navigating ongoing disruptions—and where recovery signals are emerging.
A Cycle of Disruptions Reshaping Aviation
Opening the discussion, Manish Puri, Head of Global Sales, Air India & Air India Express, reflected on the cascading nature of disruptions over the past few years. From geopolitical tensions and airspace closures to operational shocks and economic uncertainty, aviation has remained at the frontline of impact.
The most immediate consequence has been operational complexity. Flight durations on key long-haul routes—particularly to Europe and the United States—have increased significantly due to restricted air corridors. What were once 13-hour journeys are now stretching to 17–18 hours, triggering a domino effect across crew scheduling, aircraft utilisation, and overall network planning.
These longer routes are not just a fuel cost issue. They directly strain crew availability due to regulated flying hours, forcing airlines to cut frequencies to maintain schedule integrity. For a carrier like Air India, where long-haul markets such as India–US form a critical growth pillar amid fleet expansion, this creates both a short-term constraint and a strategic challenge.
He added: “India-US for Air India particularly is a big market for us. And as we transform with getting more and more wide body aircrafts, Europe and US remains a very critical aspect of the business. But yes, we need to see a little longer view of everything what is there. We need to see the silver lining of that once this crisis gets over. Hopefully, everybody who has curtailed their travel will again come back with a pent-up demand. And that's the time where as the ecosystem, we will probably bounce back.”
At the same time, macroeconomic headwinds—particularly in transatlantic travel—have softened demand. Yet, the broader industry remains cautiously optimistic. As seen post-pandemic, suppressed demand tends to return quickly once stability resumes, often in the form of pent-up travel demand.
Economic Resilience and the Demand Story
JB Singh, Director, InterGlobe Air Transport Ltd. and President & CEO, InterGlobe stated that hotels highlighted a key structural advantage: India’s strong and steadily growing economy. Despite a temporary dip during COVID-19, demand has largely tracked pre-pandemic growth projections.
This resilience is not limited to India alone. Globally, tourism is projected to contribute significantly to economic output over the next decade, reinforcing long-term confidence in the sector. He said: “And even if we look at it from a global basis, you know, tourism is going to contribute 11% to global GDP by 2033 and will grow to 16 trillion from the current 11 trillion.”
Singh also pointed to the relative resilience hierarchy within the travel ecosystem. Logistics, due to its essential nature and lower regulatory friction, tends to withstand shocks better. Hospitality follows closely, supported by asset-backed models and the ability to pivot toward domestic and hyperlocal demand. Aviation, however, remains the most exposed—highly regulated and deeply dependent on international coordination, bilateral agreements, and airspace accessibility.
Yet, aviation also demonstrates the fastest recovery cycles. Once constraints ease, capacity returns quickly, and demand rebounds at pace.
Hospitality’s Domestic Cushion
From a hospitality standpoint, Nikhil Sharma, Managing Director & COO, South Asia, Radisson Hotel Group, emphasised India’s structural strength: its deeply domestic-driven demand base. Metro and tier-one cities account for a large share of consumption, but it is the tier-two and tier-three markets that are proving exceptionally resilient. In these emerging destinations, domestic travellers contribute up to 95–97% of demand, insulating hotels from global volatility.
That said, international factors still play a role. Cities like Bengaluru and Hyderabad—heavily linked to global business travel—have seen occupancy declines of 25–27% compared to the previous year, reflecting the slowdown in international corporate movement.
In contrast, smaller cities continue to outperform, with some portfolios even registering year-on-year growth. This divergence underscores a key trend: India’s hospitality growth story is increasingly decentralised, driven by domestic consumption rather than international arrivals alone.
The New Traveller: Adaptive, Digital, and Undeterred
Sandeep Dwivedi, Managing Director & COO, Amadeus South Asia, brought a data-driven lens to evolving traveller behaviour, highlighting how disruptions are no longer demand destroyers—but demand redistributors.
In today’s digitally mature market, booking behaviour shifts almost instantly. Within hours of a disruption, travellers begin searching for alternate routes and destinations. Within 24–48 hours, booking patterns realign.
While overall air bookings have seen a decline—down approximately 27% in recent comparisons—the story beneath the surface is more nuanced. Once labour traffic to the Middle East is excluded, the drop in leisure travel demand is far less severe.
More importantly, travellers are redirecting their plans rather than cancelling them altogether. Southeast Asia has emerged as a major beneficiary of this shift. Destinations like Vietnam are witnessing explosive growth, with booking volumes surging dramatically year-on-year. Similarly, Japan continues to see strong demand from Indian travellers, particularly among younger, experience-driven segments.
This reflects a broader behavioural shift. Post-pandemic, Indian travellers—especially millennials and Gen Z—are prioritising experiences over material consumption. Travel has firmly established itself as a key discretionary spend category, second only to essential lifestyle purchases.
Supply Constraints vs Demand Momentum
Despite strong underlying demand, supply-side challenges remain a critical bottleneck. Airline capacity limitations, regulatory constraints, and aircraft availability continue to restrict how quickly the industry can respond to shifting demand patterns.
This imbalance is particularly evident in emerging high-demand corridors, where interest is surging but capacity deployment lags. The result is a market where demand remains robust, but growth is uneven and sometimes artificially capped by operational realities.
The Road Ahead: Fragility Meets Opportunity
The panel converged on a shared outlook: while disruptions are becoming more frequent, the industry’s ability to absorb and adapt to them has significantly improved. Travel, as noted during the discussion, remains one of the most sensitive indicators of economic health—it is often the first sector to decline during uncertainty, but equally the first to recover when confidence returns.
For India, the fundamentals remain strong. A growing middle class, rising disposable incomes, and a young, travel-hungry population continue to fuel demand. Combined with increasing digital adoption and a diversifying destination mix, the market is evolving rapidly.
The immediate future may be marked by volatility, but the long-term trajectory points toward sustained growth. As geopolitical tensions ease and operational constraints stabilise, the industry is well-positioned to harness another wave of pent-up demand—much like it did in the aftermath of COVID-19.
In this environment, resilience is no longer just about recovery—it is about agility, adaptability, and the ability to anticipate where demand will shift next.
