Behind the New Focus on Indian Regional Markets – India Report

Skift Take

India has a handful of major gateway cities that get all the attention. But increasingly, travel companies are targeting the up-and-coming regional markets.

Bulbul Dhawan

Earlier this month, Thomas Cook India’s company – SOTC Travel – unveiled a series of 6 regional film campaigns around travel. The campaign was launched to mark its 75th anniversary and to reinforce the company’s focus on regional markets in India. 

“India is not a single market. There are multiple markets within India,” said SD Nandakumar, SOTC Travel’s President and Country Head, Leisure Travel and MICE. “Most of our leading products cater to the pan-India segment, but we have seen that the regional markets need a lot of differentiated products.”

Nandakumar told Skift that the idea behind the film campaigns was to connect with customers in these markets in a way that caters to their unique needs. “We do not believe that products catering to these markets are niche at all. I think these are all part of our mainstream offerings,” he said.

Aspirational Travelers: The regional markets are probably more aspirational when it comes to travel than the metro cities, he said. “People really want to travel and explore. India has moved away from the four gateway cities and it’s time for us to recognize that.”

With many countries offering visa on arrival and visa-free access to Indians, it is becoming easier to travel. “So people from smaller towns find it much easier to travel internationally without either having to worry about visa processes or needing to travel through a main gateway city,” he explained. 

He also spoke about the increase in disposable income. “The disposable income in Tier-2 and Tier-3 cities is growing and so, the bucket list does not include traveling to Indian metro cities, as was true a few years ago. Now, they want to go to international destinations like the Middle East for their first holidays. Social media also played a key role in rising demand for travel in these markets.” 

Talking about travel credit cards and their use to get better deals, he said that a vast majority of people in smaller cities in India are traveling for the joy of it. “They are not traveling to say that they saved some money using hacks,” he explained.  

These markets are also moving towards premiumization. He noted that Indians tend to spend a lot on travel, not only on travel arrangements, but also on the clothes that they wear on these trips, what they eat, and how they eat.

“The cost of travel has gone up compared to pre-pandemic levels, but that is not stopping anybody because the rate of growth of income is higher than the growth rate of airfares and other expenses.” 

Virgin Atlantic Launches Another London-Mumbai Direct Flight

Virgin Atlantic has launched its second daily direct flight between London Heathrow and Mumbai. With this, the airline’s capacity on the route will double. The new service is being operated on the Airbus A350-1000 aircraft, the airline said. 

Virgin Atlantic plans to operate around 1 million seats in India next year. India is the airline’s largest growth market after the U.S., it said in a statement. Hence, India is important to the carrier’s global strategy. 

“India presents a tremendous opportunity for us, thanks to its dynamic and rapidly growing economy. Mumbai is an essential market for Virgin Atlantic, and we’ve witnessed significant demand for premium travel experiences on this route,” Virgin Atlantic’s India Country Manager Shivani Singh Deo said.

Hilton Signs Hilton Garden Inn in Bengaluru

Hilton has signed a hotel in Bengaluru’s Whitefield area. The 223-key Hilton Garden Inn, Bengaluru, Whitefield will open in 2025. With this, Hilton’s portfolio in Bengaluru includes seven operational hotels and 10 others in the developmental pipeline. 

The hotel chain has four distinct brands in Bengaluru: Conrad, Hilton, DoubleTree by Hilton, and Hilton Garden Inn. Bengaluru is the tech city of India and the demand for hotel rooms is set to increase in the city. 

In an earlier conversation with Skift, JLL India managing director for hotels and hospitality group Jaideep Dang had said that there is an increase in demand for office spaces in Bengaluru as a lot of companies are placed in the city.

“The main reason driving the hotel sector in Bengaluru is the business demand. It maintained the number one position in the July to September quarter in terms of office leasing activity. These leases are generally for 9 years, indicating that more people are going to work in this city for the next 9 years. This is a clear indicator that as a business city, Bengaluru has strong demand,” he said.

Russia Could Allow Visa-Free Travel to Indians Next Year

The first group of Indians could travel to Moscow visa-free starting next year, a report by Economic Times said. The report cited Evgeny Kozlov, chairman of the Moscow City Tourism Committee as saying that agreement is under development currently and it is expected to significantly increase the number of tourists from India to the Russian capital. 

In the first six months of 2024, 28,500 travelers from India visited Moscow, 50% more than the figure for the same period last year. Kozlov added that in 2023, India was a leader in the source market for Moscow among non-CIS countries. India is one of the priority markets for the city. 

Star Air Launches Kolhapur-Ahmedabad Flights

Star Air has launched new direct flights between Kolhapur and Ahmedabad starting Monday. The Bengaluru-based airline commenced operations in 2019 and currently has a network spanning 21 destinations. 

Star Air is focusing on network expansion and cargo business to become profitable in the current fiscal year. It was started with the aim of connecting smaller and underserved regional areas of India with major hubs. It will also be expanding its operations to the upcoming Navi Mumbai and Jewar airports. 

Sarovar Hotels Opens Cloud9 Sarovar Premiere in Goa

Sarovar Hotels has announced the opening of Cloud9 Sarovar Premiere, Palolem Goa, to target leisure and business travelers. The 160-key hotel is the hotel chain’s seventh property in the coastal state. 

Speaking to Skift earlier this year, Sarovar Hotels managing director Ajay Bakaya had said that the company aims to have 125 operational hotels by the end of 2024, a target that it has already achieved now. The next aim is to take this number to 150 by 2025-end. “These are conservative numbers. I want to ensure that we open hotels smoothly and properly rather than in a rush,” Bakaya had said, as the company was looking at a pipeline of about 70 hotels.