India has been witnessing a staggering travel growth rate in India. Backing the statement, we have IBEF data, where it says travel and tourism is the third largest foreign exchange earner for India. And a new trend in the travel industry is Experiential Travel. The demand for activities and local experiences has grown by 250 percent in the last four years in India. Activity Travel connects visitors with the local culture of the destination and offers adventurous and personalized experiences. People these days travel to acquire experience and therefore choose a travel plan that satiates their desire to go for such activities including trekking, rafting, wildlife, local culinary experiences, among the others.

When we talk about the travel industry, it has three major sectors. They are transportation that includes flight, trains, etc, accommodation that includes hotels and other stay facilities. Then the third segment comes as Activities & Experiences. This segment is highly fragmented and over 90 percent of operators from the activity segment are offline. To understand the activity-travel segment better, let's get a clear idea about the growth drivers of this segment:

Rise in travel

Blame it social media effects, rising disposable income or peer pressure, there is a rising trend when it comes to traveling in India. People are also exploring domestic as well as overseas destinations to match their knowledge about a certain place what they read on books, or on certain travel blogs, etc. People just have started loving travel all for a good reason. When there is a certain part of travel still dominated by religious and family outings, there is a substantial part of new age travelers coming up who are planning a trip around a certain activity. For example, one in every five men under 30 from metros plans for Leh-Ladakh bike trip, trekking or mountaineering experience in Indian Himalayas.

“Small online players can work on a partnership model to offer specific need-based services related to activity travel”

Greater Awareness

Internet penetration and affordable smartphones are two other major drivers of growing awareness about different places. Through the Internet, we get to know about the weather, food, activities of a certain place that gives you ample opportunities to churn out activity travel plans as per the budget and time.

Higher disposable income

Higher disposable income leaves the individual to try out different things in life and activity travel is one of these must-do’s. According to Trading Economics data, disposable personal income in India increased to 192817450 INR Million in 2018 from 169623970 INR Million in 2017.

Besides, with the 65 percent Indian population under 35 years of age, there is new consumerism found in India that yearns for low-asset life. Low-asset life recommends no assets associated with any individual, rather suggest living life as it comes and explores the world more to gather experience. This group of young population is earning big and spending on parameter like travel, food, reading that qualifies the life of an individual. Activity segment has also got a lot of traction from this consumer segment who are well read, well-funded and wish to add more experience in lives.

A sneak peek into the activity-travel

Despite its high growth potential, the discovery of the activity-travel segment is very tough. Primarily because, as mentioned before over 90 percent operators who are present in this space work offline. They work on excel sheets, emails and use physical dairies to feed contacts, note about clients’ expectations, manage bookings and even payments as well. Technology-enabled consumer faced e-commerce platform allow online booking by travellers based on scores of parameters. Realizing the need, suppliers or operators have also now started leveraging the online tools.

An area of concern for this activity segment is, the segment has different sub-segments including cultural, religious, sports, adventurous, among others. Now, every sub-segment has a different set of activities and needs tech-based solutions for each subsegment of activity. Moreover, feeding every minute details related to every subsegment is not feasible. Hence, the operator needs to work both offline and online to offer a hassle-free experience.

The trend of activity-travel in India

According to a survey conducted, families looking for activities in their tour has increased by around 60 percent. In that, kids-friendly activities decide 46 percent of such plans. Another trend that is boosting the growth of activity-travel in India is a corporate outing. Such outings are great for team building and connect employees well with the organization's culture and growth mission. Here also activity travel has been a major attraction for several teams choosing a certain travel plan designed with interesting activity itinerary.

There has been an increasing trend in luxury activities as well, including yacht tours, wine tours, glamping, luxury train journeys, etc. This can be attributed to the increase in disposable income among the middle class in metro cities and a jump in the affluent segment from the tier-II and tier-III cities.

Threat from Google’s Touring bird

While there is a very tiny segment of the online operator who is providing online facilities for booking activity travel and assuring other related services, there is a growing threat from technology behemoth Google. The company has come up with Touringbird.com which is a platform to book activity travel. This is a threat for small players operating in this space as the giant platform will mostly associate with only big players in this field. Hence, only reliability on Google for booking activity travel is not a safe idea any longer.

Conclusion

There is also a threat from established names like makemytrip.com, bookmytrip.com, who with their wider reach and bandwidth can withhold the growth of the small online players operating in activity-travel segment. However, as they say, every challenge leads to an opportunity. These small online players can instead work on a partnership model to offer specific need-based services related to activity travel. And there is an immense growth opportunity for such players to establish themselves as a brand, only by catering to the specific need of this space.