Why Modi's Call to Skip Foreign Trips Is a Windfall for India's Hotels
From my desk in Singapore, here's the latest on how global turmoil is reshaping Indian travel habits.
The Middle East conflict is hitting India hard—the rupee has lost over 6% against the dollar this year, jet fuel costs are soaring, and Air India has cut more than a quarter of its international flights between June and August. Prime Minister Narendra Modi's response? He's asked citizens to travel less abroad, save fuel, and even stop buying gold to protect the country's foreign exchange reserves.
That sobering message, however, is proving a goldmine for India's own hospitality sector. With the rupee weak and flights canceled, Indian families who'd normally escape the summer heat to Europe or elsewhere are staying put. And they're spending.
“Domestic travel has gained prominence, with 42% of travelers choosing to explore their own countries,” says a recent Allianz Partners report based on an Ipsos survey. The trend is especially strong in India, China, and the United States.
Hoteliers are feeling the boost. Rajeev Menon of Marriott International says revenue per available room in May was back to double-digit growth, after a dip in March caused by the Middle East crisis. “People have pivoted and shifted their plans to stay within Asia,” he notes.
Devendra Parulekar, founder of premium rental platform SaffronStays, reports May bookings up nearly 40% and June forward bookings 50% higher than last year. Demand is surging for luxury properties near the Himalayan foothills, as travelers swap Swiss Alps for Indian peaks.
Even weddings are shifting. Indian Hotels Company, parent of Taj Hotels, sees destination weddings moving from overseas venues to Indian resorts. CEO Puneet Chhatwal expects room rates to rise 8% to 12% as demand outstrips supply. The Confederation of All India Traders estimates weddings generated business worth $68 billion last November and December alone.
While the World Travel and Tourism Council predicted India's outbound travel could rival China's within a decade, for now, the wanderlust of Indian travelers is staying close to home.