Why travel and hospitality tech firms are cautiously optimistic amid Omicron wave
After seeing an upswing in travel and hotel bookings during the end of year, the Online Travel Aggregators (OTA) and hospitality sector has seen a significant dip in both domestic and international travel due to the third wave of pandemic.
Reservations for international travel have dropped drastically, with industry players estimating the plunge to be close to 60 percent while domestic travellers have rescheduled plans, leading to a 30 percent decline in bookings.
However, industry players are optimistic of recovery going ahead in 2022.
“Since the emergence of Omicron in India, we have witnessed a drop of around 15 percent in domestic flight bookings. International travel has been affected owing to restrictions being implemented across the globe. Despite this new surge, the travel sentiment remains strong and this can be evidenced by the fact that many travellers are now planning to partake in revenge and leisure travel,” Rikant Pittie, Co-Founder of OTA, told YourStory.
Tough times for hospitality
The hospitality sector has seen a sharp decline in bookings, as nearly 90 percent of bookings made by foreign travellers were cancelled – this was after bookings started trickling in by November to mid-December 2021.
“Domestic travel also witnessed cancellations at the beginning of December – upwards of 20 percent. This has mainly happened in the leisure travel segment,” said Aditya Sanghi, Co-Founder and CEO of cloud-based hotel management software provider.
He added, “As per our hotel partners, around 30 to 40 percent of their guests have asked to cancel/reschedule their January bookings. In terms of business, January is going to be a difficult time.”
B2B travel tech platform, which helps travel agents manage their online businesses, also reported nearly 20 percent cancellations in bookings.
“Domestic travel is down from the second week of January by 30 to 40 percent while international travel is down nearly 50 to 60 percent,” said Arun Bagaria, Co-Founder at TravClan. He added that new hotel bookings fell by nearly 30 percent in the month of January.
The silver lining
Despite the temporary slowdown, most of these players expect a stronger rebound, especially in leisure travel and due to extended work-from-home policies.
Ankita Sheth, Co-Founder of holiday homes brand, told YourStory that the period of bookings has increased from three days to an average of seven to eight days in the current wave due to acceptance of WFH.
“December saw a 20 percent increase in bookings over the previous month. The vast majority of our villas have already been sold. There were only a few cancellations (less than 2 percent). Approximately 10 to 12 percent of January visitors have rescheduled their trips for February,” she said.
Rikant of EaseMyTrip, said travel inquiries related to hills and other locations have gone up by 40 percent. “Due to safety concerns, we are also expecting a rise in demand for unique, unexplored destinations, short weekend getaways, and road trips to nearby tourist destinations,” he said, adding that people were spending more on travel to take once-in-a-lifetime trips.
The overall industry sentiment is optimistic as Omicron has slowed growth but hasn’t caused a dip in business.
“Both international and homegrown chain hotel brands will expand their portfolio through acquisitions and the sector will see a rise in demand for hospitality technology solutions,” said Aditya of Hotelogix.