Leisure travel is no longer a far-fetched dream. Pent-up demand for travel continues to remain high in the short-term, with passenger traffic holding up well on the weekdays.
The people’s ideology towards travel has shifted post-Covid, showing positive intent. Work-life balance isn’t hard to achieve anymore. Most corporations are exploring a permanent work-from-home or hybrid model to provide more flexibility to employees. With this, the number of leisure trips is also on the rise.
Leisure travel is set to grow during the first three quarters due to solid summer season demand. Recovery has been V-shaped, and revenge travel is driving the upswing . Consumer sentiment is at an all-time high now, with daily-flown passenger numbers for domestic flights reaching highest levels since March 2020. Airlines are also scaling up their network and opening up direct routes to capitalise on summer season travel demand. In addition, many countries’ resumption of scheduled international flights and relaxation in Covid norms is a significant tailwind for leisure travel.
On the other hand, corporate travel is showing signs of recovery and is expected to reach pre-Covid levels during the second half of 2023. The sentiment of corporate travellers is improving and we see significant movement between metros and same-day return traffic.
With Brent hovering above $100/barrel, the operating cost for airlines has significantly increased, resulting in a high-fare environment. This trend impacts forward bookings and is expected to normalise in the latter part of the year.
A new trend that has emerged recently is that Indian consumers have started to favour ‘preferred airlines’. This preference is pushing the airline industry to develop innovative digital solutions to move towards a customer-centric approach.
The airlines — still reeling from the impact of Covid — are trying to rebuild their reputation and transform flying experiences. Reducing the number of touchpoints using digital also enables customers to regain confidence in the industry. Travelling to unexplored destinations is one thing people are likely to embrace, rather than just going to conventional destinations.
(Gaurav Patwari is Vice President, Airlines at Cleartrip).
May 15, 2022