By Chandran Iyer
India’s tourism industry — long stitched to tradition, word-of-mouth and local travel agents — is sprinting into a future defined by screens, data and immediacy. From booking a hill-station homestay on a phone at midnight, to stepping into a 360° virtual tour of a temple from thousands of miles away, digital tools are changing how Indians travel, where they go, and how destinations sell themselves. The shift is not incremental: it’s structural — reshaping distribution, marketing, customer experience and even the socio-economic footprint of travel across the country.
A market transformed — and still growing fast
Two big numbers make the scale of the opportunity plain. Domestic tourist visits in India reached roughly 2.5 billion visits in 2023, underlining the sheer size of the home market and the centrality of domestic travel to India’s tourism ecosystem.
On the distribution and commerce side, the online travel market has become a multi-billion-dollar arena. Recent market studies estimate the India online travel market to be tens of billions of dollars and growing at a high single-digit to double-digit CAGR as bookings, travel planning and ancillary services move increasingly online — driven by smartphone penetration, affordable mobile data and digital payments.
Those two facts together — massive domestic footfall plus a migrating, mobile-first booking economy — explain why digitalization is not simply a marketing add-on. It is the backbone for the next decade of tourism growth.
Online travel agencies (OTAs), meta-search engines and app-based platforms have democratised access to inventory: rail and airline seats, hotel rooms, homestays, guides, adventure operators and even micro-experiences can be discovered, compared and booked instantly. The convenience of flexible cancellation, payment options (including UPI and wallet integrations) and real-time user reviews has shifted meaningful market share from traditional offline channels to digital ones. Recent market reports attribute this shift to rising smartphone use and data affordability.
Platforms such as Instagram, YouTube and short-form video apps have become discovery engines for travel. A striking image, a local food reel, or an influencer’s weekend itinerary can create overnight demand for a remote hamlet or a boutique hotel. Academic studies and industry reports show social media’s outsized role in shaping travel decisions — especially among millennials and Gen-Z — because these channels provide social proof, itineraries and practical tips in digestible formats.
Digital experiences expand what tourism can offer. Virtual reality (VR) and 360° tours let potential travellers “sample” a monument, trek or festival before committing. Augmented reality (AR) overlays contextual history on a monument through a phone camera; QR codes at sites unlock multilingual content, maps and accessibility information. Local governments and tourism departments are now rolling out QR-based portals and virtual tours at heritage and pilgrimage sites to boost engagement and inclusion. These tools are valuable both as promotional devices and as accessibility enhancers.
The central “Incredible India” digital hub and related government initiatives have been revamped as content-rich platforms that offer itineraries, thematic travel experiences and virtual access to cultural assets. These platforms aim to standardise reliable information and channel demand toward smaller, less-known destinations through curated campaigns (e.g., “Dekho Apna Desh”-style pushes). They also reduce friction for international travelers by consolidating practical travel information in one place.
Digitization empowers micro-entrepreneurs — homestay owners, local guides, cottage-industry artisans — by connecting them to larger demand pools. Listings platforms, instant payments and simple onboarding enable especially rural and remote hosts to monetise local assets with low upfront costs. The result: more localized economic benefits and increased incentives to preserve, package and promote cultural and natural assets.
The domestic tourism ripple: inclusion, seasonality and sustainability
Domestic tourism is India’s backbone, and digital tools influence its dynamics in several constructive ways.First, digital discovery flattens the popularity curve. Travelers who once defaulted to Goa, Jaipur or Manali are now exposed to lesser-known experiences — wildlife corridors, tribal festivals, agro-tourism and spiritual circuits — via targeted social campaigns and long-tail content. Government and private digital campaigns explicitly push these “second-tier” and “third-tier” destinations to spread tourist flows, reduce overtourism in hotspots, and create year-round livelihoods across regions.
Second, domestic travellers — often price sensitive and time-constrained — value frictionless experiences: app-based bookings, instant refunds, GPS navigation, local digital payment acceptance and mobile customer support. These conveniences make short-break travel and micro-trips (weekend getaways, city breaks) more common, benefiting local transport, F&B and experience providers.
Third, digitalization raises both opportunity and risk for sustainability. While broader distribution of visitors eases pressure on a few hotspots, easy discovery can accelerate degradation if unregulated. This has pushed some state authorities and NGOs to pair digital promotion with responsible tourism messaging, visitor caps and QR-based interpretive content that educates visitors about ecological and cultural sensitivities.
Shift in Travel Booking Patterns Among Indian Travellers
Atul Upadhyay, Executive Director at Pride Hotels Group, observes a remarkable transformation in how Indian travellers plan and book their trips. Driven by technology, lifestyle changes, and digital adoption, today’s travellers are more informed, experimental, and experience-oriented than ever before.
“In recent years, we’ve witnessed a profound shift in how Indian travellers discover, evaluate, and book stays,” says Upadhyay. “A decade ago, it was all about ‘search–compare–book’ on traditional OTA platforms. Now, travellers expect personalised recommendations, conversational discovery, vernacular ease, and frictionless, mobile-first experiences.”
He attributes this change largely to the rise of AI-powered tools that not only respond to filters like location or price but also proactively suggest stays, experiences, and itineraries based on user preferences, past behaviour, and local context. “Travellers now expect a hotel’s digital presence to already ‘know’ them—whether they prefer boutique stays, wellness options, or family-friendly environments. If the experience doesn’t feel tailored, they move on instantly,” he explains.
Upadhyay further notes that search behaviour has evolved from simple queries like “Mumbai 4-star hotel” to more intent-rich ones such as “kid-friendly beachfront stay near Mumbai airport” or “eco-luxury weekend getaway from Pune.” This, he says, reflects the growing trend of vernacular and hyper-local searches, especially across Tier 2 and Tier 3 cities.
“Today’s traveller is mobile-first, AI-powered, and experience-driven,” he concludes. “They seek seamless booking journeys with instant availability, easy UPI or wallet payments, and last-minute flexibility—all within a few taps on their smartphone.”
Growing divide within the tourism sector
P.P. Khanna, former President of the Association of Domestic Tour Operators of India (ADTOI), observes a growing divide within the tourism sector — between operators who have embraced online booking technology and those who continue to rely on traditional methods. He notes that while digital adoption has brought efficiency, transparency, and a wider customer reach for tech-savvy operators, a large segment of small and medium tour operators still struggle to keep pace. Their reluctance to invest in digital tools, often due to limited resources or lack of technical know-how, has widened the gap, making it harder for them to compete in an increasingly digital marketplace.
He said “ Technology has undoubtedly revolutionized the tourism sector, especially by scaling up the booking business for online tour operators. Digital platforms have made travel planning faster, more transparent, and more convenient for customers. However, on the flip side, the industry is increasingly losing the personal touch that once defined the travel experience. The warmth of customized guidance and human interaction — a hallmark of traditional travel agencies — is gradually being replaced by algorithms and automated systems. This shift often leaves travelers feeling like just another number in a digital queue rather than valued guests on a curated journey.
Khanna said “ . Nearly 70 percent of India’s tour operators fall under the small-scale category, 20 percent are medium-sized, and only about 10 percent are large players. While the larger companies have fully embraced modern technologies — from AI-driven booking systems to data analytics and CRM tools — smaller and medium operators remain hesitant to invest in these solutions. Their reluctance stems from factors such as limited financial resources, lack of digital literacy, and fear of technological complexity.
Business models and revenue levers: where money flows
Digital tools create new monetisation channels: dynamic pricing, subscription travel services, experiential packages, digital advertising, affiliate commerce (local crafts and F&B delivered or pre-ordered), and data-driven ancillary sales (e.g., curated insurance, last-mile transport). For hoteliers and tour operators, direct booking channels via branded apps reduce OTA commission leakage and allow personalization — which translates to higher lifetime value.
Fintech integrations (instant refunds, micro-loans for home stays, embedded insurance) and loyalty ecosystems also increase average order value. Combined, these levers represent an attractive growth path for entrepreneurs, especially those who can combine digital reach with hyperlocal operational quality.
Challenges — and the policy levers that matter
Digitalization is not an automatic win. Several challenges persist:
- Digital divide: Not all hosts and regions are equally equipped to participate. Training, low-bandwidth content and affordable onboarding are needed to make digital gains inclusive.
• Data trust and customer protection: As bookings and payments move online, platforms and regulators must safeguard consumer rights, clear refund rules and data privacy.
• Overtourism vs. livelihoods: Promoting lesser-known destinations must be accompanied by capacity planning and environmental safeguards.
• Quality assurance: Online listings must match on-ground reality; misuse of user reviews and fake listings erodes trust.
Policy levers to address these issues include digital training for small suppliers, partnerships with local governments to create standards and grievance redressal, investments in low-cost connectivity for last-mile regions and a coordinated approach to sustainable capacity planning.
Case studies and on-the-ground signals
Small but telling pilots show the direction. City tourism departments are installing QR code portals with multilingual audio and maps to make heritage sites more accessible while collecting anonymised analytics on visitor flows. VR pilots and curated virtual experiences — whether for temple circuits or ecological reserves — are being used both to promote and to relieve physical sites by offering virtual alternatives. These initiatives underscore a broader point: digitalization is as much about enriching the visitor experience as it is about shifting demand patterns.
The human factor: skill, storytelling and authenticity
Technology amplifies what people value: authentic experiences and good storytelling. Ultimately, the winners will be entities that combine technology with strong local narratives and consistent service delivery. Training tourism entrepreneurs in digital literacy, content creation, guest handling and basic hygiene standards will be as important as platform listing. Investments in storytelling — high-quality photography, short-form video and regional language content — pay outsized dividends in discovery.
What media and marketers must do differently
For brands and destination marketers, the playbook now requires three pillars: platform-native content (short, snackable, shareable), micro-targeted paid campaigns that move beyond metros and into smaller Indian towns, and community-led engagement that turns guests into ambassadors. Measurement — tracking conversion across discovery, booking and post-trip advocacy — should be the default, not optional.
Outlook: an industry primed for creative disruption
India’s tourism industry sits at an inflection point. With domestic demand already massive and mobile adoption surging, digitalization is the leverage that can turn latent interest into real trips, and small local assets into sustainable livelihoods — provided the growth is managed.
For entrepreneurs, the opportunity is to build digital-native services that deliver consistently at local scale. For policymakers, the task is to ensure inclusion, protection and sustainability. For destinations, the challenge is to use digital tools to tell better stories while managing carrying capacity.
If these three stakeholders align — platforms, policymakers and place managers — Indian tourism can move from a seasonally intense, hotspot-focused model to a distributed, inclusive and resilient industry that rewards both travellers and communities.
