Weak Rupee Disguises Solid Growth in India's Travel Market

Despite facing a myriad of challenges from within and outside the travel industry, India remains among the fastest growing travel markets in the Asia Pacific region, according to a new PhoCusWright report. Although the country's slowing economy, depreciating rupee, and ailing airline industry burden the travel market, gross bookings will march ahead by double digits through 2015, when they will reach US$28.8 billion.

"The weakness of the rupee and overall economic sluggishness in the Indian economy have definitely taken a toll," says Chetan Kapoor, PhoCusWright's research analyst, Asia Pacific. "But while the Indian travel market appeared flat in dollar terms in 2012, nearly all travel segments saw double-digit increases in local currency terms, and most will maintain strong growth through 2015."

Online travel in India continues to outpace the total travel market, with online gross bookings projected to reach $12.5 billion in 2015, up 80% over 2012. While air and rail make up the vast majority of India's online travel market, the country's fragmented hotel landscape poses the biggest opportunity. Online lodging bookings will rise more than 30% annually over the next several years as OTAs push to expand their offerings beyond air.