Year ender 2025: Travel boomed, insurance rose, and spending got sharper

More journeys, higher covers, and clearer priorities shaped travel in 2025

The year 2025 saw a clear shift in how Indians travelled, both within the country and overseas. Travel volumes rose sharply, driven by pilgrimage tourism, festival-led homecomings, leisure breaks, and renewed international mobility. At the same time, travellers became more financially conscious, placing greater emphasis on insurance cover, advance planning, and value for money.

Travel insurance moves from optional to essential

One of the clearest trends of 2025 was the growing acceptance of travel insurance as a necessity rather than an add-on. According to data from Policybazaar.com, travel insurance policy issuance rose 15 per cent year-on-year, reflecting a more risk-aware traveller base.

 

 

Indian travellers increasingly opted for higher sum insured options.

 

A cover of USD 250,000 emerged as the preferred choice for trips across Asia, Africa, Japan and Europe, while those travelling to the US and Canada largely chose USD 500,000 policies, driven by steep overseas healthcare costs. Senior citizens accounted for 15 per cent of all insured travellers, underlining the rise of older Indians travelling more frequently. Student travel insurance remained a niche but steady segment at 1 per cent, supported by long-term education requirements. 

Individual travel policies dominated the market with a 75 per cent share, while family policies made up the remainder. Medical claims continued to account for the highest claim value, while baggage delays, loss, and trip disruptions were the most frequent incidents.

 

Meet Kapadia, head of travel insurance at Policybazaar.com, said 2025 clearly marked the year when travel insurance became integral to travel planning, with travellers prioritising preparedness as disruptions and medical risks remained real concerns.  ALSO READ | Indian travel trends: Data shows 5x flight growth, spend in 113 currencies

Domestic travel powered by small towns and pilgrimage

Domestic travel saw strong momentum, particularly from smaller towns and rural areas. RedBus data shows that 61 per cent of travellers began their journeys from small towns, while 33 per cent originated from metro cities and 6 per cent from state capitals. Passenger growth from Tier-III destinations rose 26 per cent compared to 2024, highlighting deeper travel penetration beyond large cities.

 

Pilgrimage travel emerged as the biggest driver. Travel to religious destinations grew 88 per cent year-on-year, far outpacing the 25 per cent growth in leisure travel. Routes connected to Tirupati, Shirdi, Katra, Ayodhya, Varanasi, Prayagraj, Ujjain and Puri recorded heavy demand. The Mahakumbh Mela led to a 36-fold rise in seat bookings to Prayagraj.

 

Prakash Sangam, chief executive officer at redBus, said pilgrimage travel and journeys originating from smaller towns were among the strongest growth drivers in 2025, with momentum expected to continue into next year.

How Indians Travelled on the Ground

AC buses accounted for 73 per cent of bookings, reflecting a preference for comfort on long journeys. Sleeper seats made up 50 per cent of all bookings, followed by hybrid seats at 30 per cent and seaters at 20 per cent. Sundays saw the highest occupancy, followed by Fridays and Saturdays, driven largely by weekend travel back to hometowns.

 

Women accounted for 32 per cent of passengers, while millennials formed the largest traveller group at 44 per cent. Gen Z travellers made up 33 per cent of the passenger base. The average seat price across India stood at ~964 in 2025.

Spiritual, Festival, and Spontaneous Travel

Paytm Travel data shows spiritual travel remained a key theme. Bookings to Prayagraj surged during the Kumbh Mela, while searches for Ayodhya, Varanasi and Tirupati rose sharply. Festival-led travel around Chhath Puja, Diwali and Independence Day continued to drive peaks in demand.

 

A notable behavioural trend was spontaneity. Bookings rose 15 per cent immediately after salary credits, pointing to a close link between cash flows and travel decisions. Tier-II cities such as Indore, Lucknow, Patna, Surat and Kochi saw rising inbound travel, reflecting growing aspirations beyond metros.

Global Travel and the Rise of Bleisure

International travel in 2025 increasingly centred on experience-led journeys, including wellness trips, multi-generational holidays, and celebration travel. Chris McFall, vice president - sales at Shangri-La Group, said travellers now seek authenticity, comfort, and connection, supported by AI-driven planning and personalisation.

 

Bleisure travel also gained ground, with professionals extending work trips for leisure. Longer stays and blended itineraries are expected to shape global travel behaviour well into 2026.

The Big Picture

Taken together, 2025 signals a maturing Indian traveller, more mobile, better insured, and increasingly value-conscious. From spiritual journeys to global escapes, travel this year was not just about movement, but about smarter planning and deeper experiences.