New Delhi [India], June 18 (ANI): India’s online travel agency (OTA) market is expected to grow to Rs 3,835 billion by FY28, expanding at a compound annual growth rate (CAGR) of around 13 per cent, according to a report by Motilal Oswal.
The report said this growth is significantly higher than the projected 6.1 per cent CAGR for the global OTA market, driven by strong domestic travel demand, rising digital adoption, and an underpenetrated online travel ecosystem.
The share of online travel bookings in India is expected to increase to 65 per cent by FY28 from the current 54 per cent, reflecting the growing shift toward digital platforms.
Globally, the travel and tourism industry is also witnessing strong growth and is expected to record an 8.2 per cent CAGR during CY23-27E. The report noted that global outbound departures reached a record 963 million in CY22, up 111 per cent year-on-year.
According to the report, online travel agencies are likely to gain market share faster than direct suppliers and IRCTC because they offer a wider range of inventory, easier price comparisons, bundled services, and stronger customer loyalty programmes.
“OTAs are expected to gain market share faster than direct suppliers and IRCTC as they aggregate more inventory in one place, enable easier comparison, bundle ancillaries, and offer better and stronger loyalty and retention funnels,” the report said.
The report highlighted how India’s travel booking industry has evolved over the past two decades. Between 2000 and 2010, the market was largely fragmented and dominated by offline travel agents. However, from 2010 to 2020, online travel agencies transformed the sector by improving travel discovery, aggregation, and price transparency.
During the post-pandemic period, these platforms expanded further through super-app integrations, offering users a seamless travel experience that combines bookings, payments, and local services on a single platform.
Looking ahead, the sector is entering a new phase driven by artificial intelligence.
“The OTAs are now entering an AI-driven phase, evolving into intelligent platforms that offer hyper-personalized, real-time planning, dynamic packaging, and assisted decision-making,” the report stated.
The report said successful OTA businesses depend on factors such as technology infrastructure, supplier networks, customer acquisition capabilities, automation, and the ability to offer additional services that increase revenue per user.
It also noted that mergers and acquisitions remain an important growth strategy for both global and Indian online travel companies.
“These acquisitions typically aim to strengthen technological capabilities, expand supply inventory, increase customer reach, and enable cross-selling across various travel segments,” the report added.
The report said Indian online travel companies are well placed for long-term growth, supported by rising disposable incomes, increasing travel demand, rapid digital adoption in Tier-II and Tier-III cities, and the country’s still-low online travel penetration compared with global markets. (ANI)
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