Clear Skies Ahead: Travel Industry Cruises Past Turbulence As It Enters 2026

A brief wobble in sentiment after the IndiGo crisis hasn't grounded year-end holiday plans. From global tourism boards and cruise lines to hotels and premium villa stays, operators are reporting demand well above last year’s base. Mainstream platforms are clocking an approximate 15–25% year-on-year growth in December bookings.

Despite airline disruptions, geopolitical tensions and climate-related turbulence through the year, data across platforms, tourism boards and operators suggests Indian travel demand has gained momentum.

An EY Report on Indian Tourism in 2025 showed that 57% of travel service providers reported higher bookings compared to 2022 levels. The report also highlighted a growing divergence across city tiers: travellers from tier-I and tier-II cities increasingly prefer international destinations, while those from tier-III cities remain more domestically focused.

Cleartrip’s Unpacked 2025 report, based on internal booking and search data, showed Gen Z travel bookings surging 650% in 2025. This cohort favours year-round travel, multiple destinations and mobile-first planning, with 66% of all bookings made via smartphones.

Internationally, Vietnam emerged as the breakout destination, recording a 133% jump in traffic, while Dubai, Kuala Lumpur and Bangkok ranked high for spontaneous trips. Domestically, Varanasi and the Andaman Islands saw 20% growth, while Uttar Pradesh emerged as the most visited state, with stay searches for Prayagraj tripling and Bareilly quadrupling.

According to a report by Mordor Intelligence, India’s online travel market is valued at $23.1 billion in 2025 and is projected to grow to $33.9 billion by 2030, implying a 7.76% compound annual growth rate.

This expansion is being driven by smartphone adoption, digital payment penetration, a strong domestic aviation network and the steady migration of consumers from offline agents to online platforms. Online travel agencies, facing intense competition, are doubling down on loyalty programmes, dynamic pricing and vernacular user interfaces to capture demand beyond metros.

At a macro level, tourism has become a heavyweight in India’s economic engine in recent years. The 2025 EY Tourism Report has also stated that the direct contribution of travel and tourism to India’s GDP stood at $23,100 crore in 2023, placing India second in the Asia-Pacific region for tourism GDP contribution.

The country’s global competitiveness has also improved steadily. India ranked 39th on the World Economic Forum’s Travel and Tourism Development Index 2024, up sharply from 54th in 2021.

The Economic Times also reported Nattachit Oonsiam, director at the Tourism Authority of Thailand’s Mumbai office, saying India is expected to send around 24.8 lakh travellers to Thailand by the end of 2025, potentially the highest figure recorded so far.

As per data from Thailand Tourism, the country welcomed over 23.4 lakh Indian travellers between January 1 and December 15 this year, a 17% increase year-on-year, driven by improved air connectivity and repeat leisure travel.

Indian tour operators are also reporting similar growth. As per the same report, Cox & Kings & SOTC Travel have said that travel platforms are seeing 15–25% growth compared to the same period last year. Domestic leisure and alternative accommodation have benefited from this shift as well. ET also reported StayVista, Lohono Stays, Isprava Group reporting a 25% jump in bookings as compared to the previous year, with Alibag, Karjat, Lonavala and Khandala among the preferred spots.

The first half of December proved turbulent for IndiGo, one of India's largest domestic and international airline carriers, as it grappled with a severe operational crisis. Nearly 5,000 flights were scrapped within just 10 days, following on from persistent delays and close to 900 cancellations in November.

In a desperate bid to restore schedules, IndiGo urged pilots to cut short sick leave and even dangled 1.5x daily allowance for those cancelling privilege leave. The crisis was compounded by winter schedule tweaks, minor technical snags, adverse weather, and congestion across aviation systems.

As India enters 2026, the contours of its travel economy are becoming clearer. Travel is no longer treated as a discretionary splurge but as a core lifestyle expense — planned digitally, and increasingly centered on experience rather than distance.

For operators and policymakers alike, the challenge ahead will be less about demand creation and more about infrastructure, capacity and sustainability keeping pace with an Indian traveller who expects the system to keep up with their rapidly expanding horizons.