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India’s democratic festival, the general elections, grounding of the Boeing 737 Max, Jet Airways crisis and hotel inventory renovation coinciding with the summer vacations all seem to have dampened travel plans this summer.
According to an annual survey by Yatra.com, about 68 per cent of the surveyed Indians planned a summer vacation in comparison to 81 per cent last summer.
According to credit rating agency ICRA, after years of strong growth, the traffic growth at Indian airports has hit an air pocket with passenger traffic declining by 1.1 per cent (Y-o-Y) in March 2019. This has dragged down the FY2019 passenger traffic growth to 11.6 per cent, making it the lowest over last five fiscals. During the same period, the aircraft traffic grew by 12.1 per cent, while the cargo traffic increased by 6 per cent.
Lesser spend
According to Yatra, this year 45 per cent of respondents were willing to spend only ₹10K-25,000. In comparison, 75 per cent respondents were willing to spend over ₹25,000 per person last season.
Harsh Jagnani, Vice-President and Sector Head for Corporate Ratings, ICRA Ltd, said: “The slowdown (in airport traffic growth) has been witnessed primarily in Q4 FY2019, wherein the passenger traffic increased by only 3.9 per cent Y-o-Y, as against growth of 14.5 per cent in the first nine months. Further, the decline in March 2019 is the first instance of Y-o-Y traffic de-growth in a month since February 2013. Thus, the robust growth trend of last few years, wherein the CAGR had been 17.5 per cent (FY2015-FY2018) has been arrested. This can impact revenues and margins for the airports sector, at a time when many of them are undertaking sizeable capex.”
Last month, BusinessLine had reported that airfares had seen a rise of 9-15 per cent and were likely to stay higher during the summer vacation period. The booking advance bookings window too had broadened.
Booking schedules
Yatra.com’s survey stated that 43 per cent of people booked more than 15 days in advance while 40 per cent booked a minimum of 3 months in advance. Another report by Cleartrip suggested that over 70 per cent of its users booked their trips more than a month in advance, while those who booked within three to four weeks window before their travel dates accounted for around 10.65 pent.
Spontaneous travel plans were less popular during the summer, accounting for less than one-tenth (8.87 per cent) of the total bookings. Last year, travellers planned their summer trips well in advance with over 40 per cent bookings made more than 2 months in advance for domestic and international.
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