Cleartrip is seeing sustained festive booking momentum even as airfares have jumped by 20% over the last year. While the broader industry saw a 6% dip in domestic traffic during August due to capacity issues, the company is shifting its strategy to focus more on holiday packages to reduce dependence on air travel bookings.
Indian travelers continue to book trips for the upcoming festive season, shrugging off the 20% increase in airfares recorded over the past year. Despite higher ticket prices, the booking momentum for Dussehra and Diwali periods remains steady, suggesting that consumers are maintaining their travel plans for the festive months.
Industry-wide, however, the sector has faced hurdles. Domestic travel saw a 6% decline in traffic during August. This drop was largely attributed to capacity constraints across the airline industry, which have been influenced by rising fuel costs and currency fluctuations. As carriers adjust their routes to manage these costs, travelers are increasingly looking toward international options, particularly in Southeast Asia, with countries like Vietnam, Indonesia, Thailand, and the Philippines attracting significant attention as alternatives to traditional routes.
Cleartrip, which is part of the Flipkart ecosystem, is now actively adjusting its business model to reduce its reliance on air ticket sales. Currently, air travel bookings make up more than 80% of the company's total business. To create a more balanced revenue stream, the company is pushing to expand its non-air segments, which include hotels, holiday packages, trains, and bus services.
The company has set an internal goal to increase the contribution of these non-air categories to 25% of its total business by December 2027. This shift is significant because non-air travel products often offer different margin profiles compared to the highly competitive and price-sensitive air ticketing segment. To support this, the firm is leveraging artificial intelligence to personalize holiday planning and curation. This technological approach is intended to help the company capture a larger share of the leisure market, which remains highly fragmented with many local and regional competitors.
While this strategic pivot is designed to lower dependency on a single revenue source, the company's success will depend on its ability to scale these new services effectively. Market observers should track whether the company can hit these revenue targets and how well these bundled holiday packages perform against established competitors in the travel space. The ability to maintain booking volumes while successfully upselling these non-air products will be the key factor to watch as the company works toward its 2027 goal.