Whalesbook
High Fares and Global Risks Disrupt Travel
Soaring airfares and ongoing geopolitical tensions have changed where Indian travelers are planning their summer holidays. Non-stop flights to major European cities now cost between Rs 1.23 lakh and Rs 1.6 lakh, a potential 100% increase from normal rates. Even indirect routes are at least 50% more expensive. These higher costs, combined with uncertainty from conflicts like the one in the Gulf region, are leading many to rethink international travel plans. The Middle East, once a popular stopover and leisure spot, is seeing less interest due to safety concerns and fears of disruption.
Shift to Asia and Domestic Destinations
This mix of high prices and safety worries is speeding up a move towards more accessible and affordable international and domestic options. Southeast Asian countries such as Thailand, Malaysia, Indonesia, Vietnam, and the Philippines are becoming top choices. These destinations offer shorter flights, easier visa processes, and are generally cheaper, especially with the Indian Rupee weakening. For example, Thailand welcomed 2.48 million Indian tourists in 2025, boosted by its 60-day visa-free entry policy. Malaysia also provides a visa waiver until December 31, 2026. Talks are underway for a unified Schengen-like visa for six Southeast Asian nations, which would simplify multi-country trips for Indians. At the same time, domestic tourism is seeing a comeback, with popular regions like Kerala and Rajasthan attracting significant interest, along with growing curiosity about the Northeast.
Challenges Ahead for Travel
Despite strong demand for alternative destinations, the travel sector faces significant challenges. The Indian Rupee's drop, trading around 91.90 against the US Dollar in early March 2026, continues to increase the cost of international travel and strain budgets. The aviation industry is also dealing with nearly a 50% rise in jet fuel costs over the last year. This has led airlines to cut flight schedules and possibly raise fares, limiting flight availability on popular routes. Analysis suggests that travel demand between India and the UAE could exceed available capacity if restrictions continue, showing wider capacity issues. Domestically, occasional fuel shortages and disruptions to local transport and hotels can make travelers hesitant, slowing growth in some Indian regions.
Growth Expected as Destinations Adapt
Forecasts predict steady growth for India's outbound tourism market, expected to reach USD 68.8 billion by 2036. Southeast Asian countries are improving connections and marketing efforts to attract this growing market, seeing India as a key driver for their tourism economies. The trend towards experiential travel, supported by digital platforms and rising incomes in smaller cities, points to continued demand for both international and domestic trips. This market's expansion is supported by increasing airline capacity and more Indians wanting to travel internationally.