India's Experiential Spending Surge Fuels Fintech Travel Loans

India's consumers are increasingly prioritizing experiences over traditional savings, with travel emerging as a key focus. This significant shift in behavior is reshaping the country's financial and tourism landscapes, creating opportunities for innovative financial solutions despite a competitive market.

Experiential Spending Takes Off

India's long-held saving habits are evolving, especially among younger generations eager to fund experiences rather than delay them. Travel is a major beneficiary. Outbound international trips grew by 10.79% to 30.89 million in 2024, while domestic tourism surged 17.51% to 2,948.19 million visits. Rising incomes, better connectivity, and a growing desire for varied experiences like festivals, wellness retreats, and luxury breaks fuel this trend. Social media plays a vital role, with 50% of Indian travelers citing influencers as a key inspiration for choosing destinations.

Fintechs Offer Travel Credit

With credit card penetration in India at a low 6-7% compared to mature markets, new financial platforms see a significant opportunity. Startups like Scapia are integrating credit directly with travel bookings. They offer features such as lifetime-free credit cards with travel rewards and interest-free installment plans. Scapia reported that about 20% of its travel booking value was processed through these no-cost EMIs. Founded by Anil Goteti, Scapia secured around $194 million in post-money valuation after a $40 million Series B funding round led by Peak XV Partners in April 2025. The company posted revenue growth of 70.8% year-on-year to ₹40.4 crore in FY25 but also reported a net loss of ₹83 crore in the same period. This strategy aligns with consumers' willingness to spend, with 50% of Indians reporting increased spending on experiences.

Intense Competition and Investor Caution

The Indian travel technology sector is dynamic but fiercely competitive. While startups introduce new ideas, venture capital funding in the Travel and Hospitality Tech sector dropped by 59.34% in 2025 compared to 2024, indicating investor caution. Established online travel agencies (OTAs) like MakeMyTrip, EaseMyTrip, and Yatra operate with substantial market capitalizations but also carry high valuations. For instance, MakeMyTrip's P/E ratio was around 80-87 in April 2026, significantly up from its 5-year average. EaseMyTrip's P/E ranged from 22 to 99, and Yatra's P/E was exceptionally high or negative.

These high valuations suggest elevated market expectations, leaving little room for error for companies. Scapia's financial performance highlights some challenges: despite revenue growth, it recorded a significant net loss in FY25. This is partly due to the costs of its rewards program and the lack of traditional fees like annual charges. Revenue streams relying on interchange fees and interest from EMIs, combined with potentially high customer acquisition costs in a crowded market, raise questions about long-term profitability and cash burn. Furthermore, Scapia's dependence on Federal Bank for co-branded card issuance introduces counterparty risk; any changes in the bank's credit policies or partnership strategy could directly affect Scapia's operations.

Outlook for India's Tourism Sector

The broader Indian tourism industry is set for continued expansion. The sector contributes 7% to India's GDP and is projected to reach $38.12 billion by 2033, growing at a 6.10% CAGR from 2025 to 2033. Outbound tourism alone is expected to grow from $23.4 billion in 2026 to $68.8 billion by 2036, at an 11.4% CAGR. Experiential travel is a major driver, predicted to reach $45 billion by 2027. Analysts remain optimistic, with inbound tourism expected to surpass pre-pandemic levels by 2026. The hospitality sector maintains a 'Stable' outlook, forecasting premium hotel occupancy at 72-74% for FY2026. For fintechs in this space, the key will be balancing rapid growth with careful credit management and a clear path toward profitability in a highly competitive environment.