India travel market grows 7.6% in FY26 as online penetration tops 42%
VIDEC Consultants released its India Travel Market Opportunity Study (FY23-FY28), estimating India's travel market at ₹5,972 billion ($67.6 billion) in FY26, up 7.6% year on year — the first single-digit growth after three consecutive years of double-digit expansion. Air bore the brunt of disruptions including the India-Pakistan conflict, the Air India crash, IndiGo's scheduling crisis and the West Asia war, with domestic passenger traffic posting virtually no growth. Alternative accommodation led at 30% growth, followed by intercity bus (15%) and hotels (11%). Online penetration rose from 33% in FY20 to 42% in FY26, with OTAs commanding over 80% of the online market in every category excep…
Impact and considerations
The study quantifies how geopolitical and operational disruptions suppressed Indian air demand while non-air categories such as hotels, alternative accommodation and intercity bus kept growing. For corporate travel buyers, OTAs' expansion into non-air segments and rising online penetration signal shifting supplier opt…
Key points
- India's travel market reached ₹5,972 billion ($67.6 billion) in FY26, up 7.6% year on year, after three consecutive years of double-digit growth.
- Alternative accommodation was the fastest-growing category at 30%, followed by intercity bus (15%) and hotels (11%); air and rail weighed on overall growth.
- Online penetration rose from 33% in FY20 to 42% in FY26, with OTAs commanding over 80% of the online market in every category except rail.
- India's domestic air market is a duopoly: IndiGo carried 64% of flown passengers and the Tata Group (Air India and Air India Express) another 27%.
- Domestic passenger traffic registered virtually no growth in FY26, the first such performance since the pandemic.
- Foreign airlines account for 55% of passenger traffic from India on international routes, with the Middle East the most prominent corridor at around half of India's international air traffic.
- MakeMyTrip Group held more than half of the OTA market, with ixigo Group second and backed by a $146 million Prosus investment.
- VIDEC projects growth momentum to continue in FY27, with higher ticket prices expected to support GBV growth.
Sources and time
- Primary source
- Web in Travel
- Other sources
- 0
- First source publication
- 28 Sept 2026, 23:42
- Page published
- 30 Sept 2026, 00:09
- Last updated
- 28 Sept 2026, 23:42
- Original links
- Web in Travel：India travel market navigates disruptions, sustains growth momentum - WiT (opens in a new tab)Primary source · en · Published 28 Sept 2026, 23:42