The Indian travel market is a fragmented sector, where the customer is spoilt for choice. This is reinforced by the presence of multiple categories of players – travel agents, B2C online booking platforms, and others comprising walk-ins, touts, telephone booking, etc.

With the easing of COVID-19 restrictions and the ongoing successful vaccination drive, Indians are set to resume domestic and international travel from FY22. Overcoming the sharp 50%+ business reversal in FY21 owing to the pandemic, India’s travel market is expected to record a steep recovery in FY22 and beyond.

Here are the key highlights from the latest report released by RedCore – Redseer’s research arm.

1. India’s travel market was ~$75 Bn in size pre-pandemic, expected to cross $125 Bn by FY 27

We estimate the travel market size to be ~$ 75 Bn in FY20. The domestic market represents ~75% of this market, while the rest is represented by spending made by Indians at International locations.

After shrinking by 50%+ in size due to COVID-led lockdown, the market is expected to make a quick recovery followed by a spike to accommodate pent-up demand. We estimate the market to cross $125Bn by FY27. This growth to be driven by improving travel infrastructure and increasing access to passports by Indians.

2. With 50%+ market share travel agents to continue to rule the market

Travel booking channels would continue to be dominated by the presence of agents, whose market share is expected to be maintained at a consistent 50%+ between FY20-27, translating into a cumulative booking value of $65Bn in FY27.

3. India is home to ~300K travel agents, ~1% Agents are capturing 12% of the travel agent market

We estimate India to be home to ~300K travel agents, who can be classified into three categories basis the size of the business. All agents focus on leisure travelers except large agents who focus on corporate bookings.

4. Packages represent ~45% of the ~$ 38Bn travel agent market in India

Travel packages are the core offering by the travel agent, with a ~45% share of the agent travel market.

Agents complain that not many agent travel booking portals are offering package booking. They generally have to build relationships with DMCs and hotels to design customized packages for their customers.

A notable trend is that customers preferred to opt for travel bookings via agents as the perceived complexity of travel increases. Backed by convenience, customization, trust, competitive pricing, and end-to-end solution, travel agents will continue to command a 50%+ lions share of the travel booking market in India.