The first full year of business after the Covid-19 pandemic was a landmark one for India’s travel and hospitality industry, where a spurt in travel and growth was accompanied by the highest share of public listings worldwide. The industry, valued at ₹4-lakh crore and expecting a CAGR of 14.1 per cent, is anticipating a slew of IPOs in the months to come from industry majors such as ITC Hotels, ixigo, and TBO.

The Online Travel Agency (OTA) segment is looking at 21 per cent y-o-y growth pegged at ₹100,000-crore value in FY24. Simultaneously, inbound travel is poised to rebound to pre-Covid levels, which currently is at 96 per cent.

According to Rajiv Mehra, President, IATO, there’s need for aggressive international marketing to counter increasing competition from Sri Lanka, Thailand, Malaysia, and Vietnam. “Some of these countries have waived off visa fees; India needs to counter such pitches with aggressive marketing campaigns,” he told businessline.

Stakeholders within the travel and hospitality sector are gearing up to harness emerging trends, leverage technological innovations, and adapt to evolving consumer behaviour.

According to Virendra Jain, co-founder and CEO of VIDEC Consultants, a prominent travel consultancy firm, there will be category diversification and proliferation of product offerings. “Growth will be through both organic means and M&As,” he said.

India secured the highest share of public listings worldwide in 2023, setting a positive tone for travel-based firms. Successful listing of Yatra, Samhi Hotels, and RateGain’s capital raise via QIP, have paved the way for significant Initial Public Offerings (IPOs) in 2024.

Leading the pack is TBO, a B2B travel firm, with OTA Ixigo and hospitality majors such as OYO Rooms, ITC Hotels, and Park Hotels also in line.

Concurrently, the industry is experiencing a surge in merger and acquisition (M&A) activities as companies strategically position themselves for growth. Notable transactions include MakeMyTrip’s acquisition of Savaari Car Rentals, TBO’s global expansion through the acquisition of Spain-based Jumbo Tours Group, and several smaller ticket acquisitions by EaseMyTrip.

This trend not only fuels growth, but also positions companies to capitalise on emerging opportunities in a rapidly evolving landscape.

Vinutaa S, Vice-President and Sector Head at ICRA Ltd, said there has been a substantial recovery in demand post-Covid, which has also led to a driving double-digit revenue growth during the year.

Sustained domestic leisure travel, demand from Meetings, Incentives, Conferences, and Exhibitions (MICE), and business travel played key roles so far.

“Premium hotel occupancy was estimated to be 70-72 per cent, with an average room rent (ARR) hovering around ₹6,100-6,200. Revenues for hotels have witnessed y-o-y growth of close to 20 per cent over 2022, while operating margins have been upwards of 30 per cent in 2023,” she said.

Union Ministry of Tourism data indicate that outbound travel has almost returned to pre-pandemic levels. Recovery of inbound tourism segment remains a cause for concern due to the lack of connectivity between India and international destinations. In a response in Parliament, the Ministry said it is “developing more travel-worthy destinations”. About 50 have been short-listed.

Aashish Gupta, FAITH CEO, said 2023 played a pivotal year for tourism post-Covid. Despite events such as G20, IPL, and ICC cricket World Cup, inbound tourism “hasn’t fully recovered”. “There was a need to build on the G20 momentum, focussing on sustainable practices”, he said.

Spiritual and leisure destinations are being pushed, including the campaign around Ayodhya. Companies such as OYO are expanding their footprint across major religious corridors, including Katra-Vaishno Devi and Char Dham route.

Industry players anticipate an uptick in virgin destinations and growing interest in hidden gems in 2024.

Places such as Meghalaya, Ziro, Ponmudi, Sandakphu, Gokarna, Halebidu, Patan, Varkala, Mandu, Tawang, Hampi, Jawai are generating queries, said Daniel D’ Souza, President and Country Head - Holidays, SOTC Travel.

However, Deep Banka, Chief Operating Officer of Zostel, feels that well-known destinations such as Shimla, Manali, Rishikesh, Munnar, Goa, and Pondicherry, will continue to do well with more investments.