Festive Travel Demand Robust, But Overall Growth Likely to Remain Muted

India’s travel industry is poised for a festive season surge driven by Gen Z travelers and spiritual tourism, though overall growth in 2025 is expected to remain subdued due to geopolitical tensions and a recent Air India crash, according to Cleartrip’s Chief Growth and Business Officer, Manjari Singhal. The sector saw robust growth early in the year, but disruptions in June and July led to a stagnation in domestic flight numbers and declining yields.

Singhal noted a demand rebound since mid-August, particularly in spiritual and leisure travel. “Spiritual destinations are seeing a large uptake driven by Millennials and Gen Z, who are driving the entire leisure uptake,” she told PTI. The festive season, coupled with recent GST reforms reducing rates on 375 items, is expected to boost hotel bookings and overall consumption. These reforms, effective from September 22, align with the government’s ‘GST Bachat Utsav’ to enhance affordability and stimulate economic activity.

Despite the festive optimism, Singhal highlighted challenges from geopolitical events, including the Ukraine-Russia conflict and Middle East tensions, which have dampened outbound travel sentiment. However, new Southeast Asian destinations like Vietnam and Thailand are attracting Indian travelers, offering alternatives amid global uncertainties. Singhal emphasized the need for government policies to reduce airport costs, which could enhance airline capacity and further stimulate the sector.

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Cleartrip anticipates strong festive season bookings but remains cautious about annual growth projections. The industry’s recovery hinges on sustained policy support and consumer confidence, with Gen Z’s enthusiasm and spiritual tourism emerging as key drivers in navigating ongoing challenges.

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