Buoyed by the growth in online bookings, existing and new hotels are going to add 10,000 new rooms to the online inventory in 2016, reveals the Google report. In terms of outbound travel, leisure segment is likely to lead the industry’s growth as niche travel destinations gain traction in the outbound.
In a report compiled by looking at the search trends for both domestic and international travel sector for the upcoming holiday season, Google India has revealed that in domestic hotel industry, branded budget hotel chains are driving the growth of hotel bookings online. With over 300 million Indians online and growing rapidly, hotel providers have been slow to catch on the digital bandwagon, with only 20 percent of total hotel inventory available online. Seizing this massive opportunity, several players including new and established players were, now, focusing on bringing quality budget accommodation online across the country.
With the availability of this new inventory online, the report mentions that Internet users in the country are lapping up the budget hotels online – which is evident in the growth of Google search queries. Branded budget hotel queries in India are growing at 179 percent year-on-year in comparison to just 36 percent year-on-year growth in generic budget hotel queries, whereas the overall queries for ‘accommodations’ as a whole are growing at 37 percent year-on-year.
Speaking about the trends in the travel industry, Vikas Agnihotri, Director Sales, Google India, said, “Newer players in the segment have energized the travel vertical by unlocking a brand new inventory online. They have been quick to capitalize on the online demand with aggressive advertising spends in building their brands, which is leading to overall category growth for the Industry. We expect this segment to continue to see massive growth with leisure travel expected to pick up in the coming summer holiday season.”
Further analysis of budget hotels category reveals strong preference for distinct brand queries i.e. users are going online looking for branded budget hotel chains. Budget hotel queries already account for 35% of total accommodation queries and a large share of 47 percent of search queries are for the brands providing budget hotel inventory online.
In terms of top destinations searched for accommodation during March to June 2015, Maharashtra, Tamil Nadu, Karnataka, Goa, Rajasthan, Himachal Pradesh, Kerala and Delhi-NCR have been the most searched destinations. Majority of these States captured business or work related travelers, indicating that leisure destinations will be the next growth driver for branded budget hotel category as today out of the top 50 domestic destination searched, only 30 percent of destinations represent leisure travel.
With the growing demand for branded budget hotel, players are investing in creating a distinct brand positioning as budget hotel providers are likely to see faster growth compared to generic travel aggregators. As per industry estimates, the inventory in the budget hotel space is expected to grow further with both new and existing players expected to bring up to 10,000 new rooms online this year.
In terms of outbound data compiled basis Google search queries Between January to September 2015 brings out some interesting trends. 25 percent of search queries were for International air ticket which was growing at 43 percent year-on-year. Meanwhile, 18 percent of search queries were for international accommodation, growing at 25 percent year-on-year. In terms of destinations, UAE, the USA and Thailand have been the most searched international destinations with a healthy growth rate of over 35 percent year-on-year.
Search queries also revealed that the Indian travelers had taken a liking to niche travel destinations, with Seychelles, Hungary, Czech Republic and Russia topping the list of fastest growing destinations in the top fifty searched international countries during January-September 2015.
In terms of packages, honeymoon and romantic packages were fastest growing packages for holiday bookings growing at over 42 percent year-on-year, followed by vacation packages growing at 35 percent year-on-year. Adventure package segment, albeit a small segment, was showing healthy growth with search queries growing over 22 percent year-on-year.