Indians in Tier-II cites bring 'faster growth' for travel industry: Report

Indians' budget for holidays has increased by 20-50% as spending power grows and connectivity improves, it says

Indians living in Tier-II cities are bringing faster growth for the travel industry by exploring domestic and international destinations, said a report on Wednesday, crediting growing discretionary spending and better connectivity for the trend.

 

Indians’ budget for holidays has increased by 20-50 per cent more compared to previous years, said Thomas Cook India and its subsidiary SOTC Travel in a joint report.

 

“When we look at demand, whether through website visits or in-store footfalls, Tier-II cities are showing faster growth compared to tier I cities,” S D Nandakumar, president and country head, holidays and corporate tours, SOTC Travel, told ‘Business Standard’. “While volumes (of travellers) are still higher in Tier-I cities, the growth rate in Tier-II is significantly faster. This applies not just to domestic travel but also to international destinations.”

 

Smaller markets have had “remarkable growth” in the last five to ten years, said Abraham Alapatt, president and group head for marketing, service quality, value added services and innovation at Thomas Cook India and SOTC Travel. 

 

“People (travellers) now want a better holiday than last year or compared to their last holidays. Overall, the average spending by travellers has increased by four per cent in 2025 (summer season) on a year-on-year basis,” Alapatt said.

 

Nandakumar and Alapatt noted that summer travel, particularly for leisure and B2C (business to consumers), continues to be a large part of travel business but not as dominant as it was 10 years ago.

 

 “...10 years back, the travel schedule used to have one big jump in summer and one slightly smaller jump in the Diwali-New Year period. Now, since most travellers (about 85 per cent) have increased their frequency of travel throughout the year, with a combination of long and short vacations, travel has become a year-round phenomenon. The dependence of the two-month period of summer has reduced slowly but steadily,” said Nandakumar.

 

Movies once shaped people’s decision to travel and discover new destinations. Now, 60 per cent of travellers gain inspiration from social media and OTT content, making the two platforms a key holiday driver for summer travel this year, said the report.

 

“…the emerging travel segments for this summer were mother-daughter and cousin-sibling segments, senior female solo travellers, and GenS or empty nesters,” said Alapatt.

 

 

While solo travelling has become popular among Indians, 90 per cent of them still prefer to travel with a company. Among travel trends, 45 per cent of respondents told the survey they prefer cruise holidays, 35 per cent driving vacations, and 20 per cent prefer scenic train journeys.

 

This summer, Kashmir, Himachal Pradesh, Uttarakhand, the Northeast, Rajasthan, Kerala, Andaman and Nicobar Islands and Lakshadweep were among the top domestic locations for travellers. Internationally, Europe, led by Switzerland and France, South East Asia, Dubai, Japan, Bhutan, and South Korea were among the major destinations among Indian travellers.

 

The report called 'India Holiday Report 2025' is based on a digital survey comprising 2,500 respondents and conducted over a month.