Geopolitics is reshaping India’s travel market this summer, with the conflict in West Asia disrupting flight routes, prompting a measurable shift away from traditional hubs such as Europe and the UAE towards Southeast Asia and domestic destinations. While Europe remains a ‘high-intent destination’, bookings have softened under the weight of higher costs and longer travel times. Ravi Gosain, president of the Indian Association of Tour Operators (IATO), said Europe queries for summer travel have dropped by 25-30% in recent weeks due to the US-Iran conflict and rising airfares.
Airfares on some routes have surged sharply as airlines reroute flights or rely on limited direct capacity. According to Rikant Pittie, chief executive of EaseMyTrip, fares on routes such as Delhi-London and Mumbai-Paris have more than doubled year-on-year, creating what he describes as a ‘k-shaped’ demand curve. “Luxury and high-frequency business travelers are proceeding via expensive direct carriers or alternative hubs like Istanbul, while price-sensitive leisure travelers are increasingly pivoting toward Southeast Asia,” Pittie said.
Hub Disruptions
The disruption is not limited to Europe as a destination. Industry estimates suggest that as much as 35% of India’s outbound travellers typically route through or visit the UAE, a share now under pressure. “Roughly 35% of outbound travellers were visiting UAE that’s been hit and this traffic has been diverted to countries like Vietnam, Malaysia, Bali (Indonesia), Thailand and Sri Lanka,” said Rajiv Mehra, general secretary of the Federation of Associations in Indian Tourism & Hospitality (FAITH).
“There is definitely a sense of hesitation when it comes to West Asia,” Gosain of IATO said. “Some travellers are either postponing plans or choosing alternate destinations.” He added that the response has been cautious rather than panicked, with travellers shortening decision timelines and seeking greater flexibility.
At the same time, the shift in demand has buoyed short-haul international markets. Southeast Asia and nearby destinations have seen a marked uptick in bookings and search activity, rising by roughly 15-25% in recent weeks, according to EaseMyTrip. Data from ixigo indicate even sharper increases in certain corridors, with Vietnam recording a 130% year-on-year rise in bookings, followed by Nepal at 88% and Sri Lanka at 68%.
The Philippines has emerged as an outlier. “The real standout, however, has been the Philippines, which has seen an incredible 3x increase in bookings,” said Pallavi Saxena, chief marketing and revenue officer, Cleartrip. Saxena described a broader behavioural shift. “There is a tangible sense of caution among Indian travellers. While the desire to take a holiday remains strong, the uncertainty has led to a clear pattern of reconsidering rather than outright cancellation of travel,” she said.
Domestic tourism is also benefiting from this reallocation of demand. EaseMyTrip estimates that bookings to destinations such as Kashmir, Himachal Pradesh, Uttarakhand and Kerala have risen by 15-20%.
Premium Domestic Rebound
Mehra of FAITH noted that some of the diverted outbound demand has flowed into premium domestic circuits. “Some has been diverted to domestic sector with demand going up for packages for Kashmir and Kerala, destinations which are considered first rate but expensive,” he said.
Cleartrip’s data suggest even sharper spikes in niche domestic destinations. Jaisalmer has recorded a 300% increase in bookings, while cities across the northeast, including Shillong, Itanagar and Guwahati, are seeing double-digit growth.
Rising airfares remain a central concern across both international and domestic travel. EaseMyTrip estimates that domestic fares are up 5-10%, while short-haul international fares have increased by 20-30%.
Operators have responded by partially passing on costs while adjusting margins to remain competitive. “In most cases, it is very difficult for tour operators to absorb these increases fully,” Gosain said. “So, we are seeing a partial pass-through of costs, while operators are trying to remain competitive by adjusting margins and offering flexible packages.”
There are, however, some mitigating factors. Mehra pointed out that moderating hotel tariffs have offset part of the airfare increase, limiting the overall impact on package prices. “Hotel tariffs which were sky high, have moderated a bit so offsetting the impact of rise in airfares,” he said.
Inbound tourism to India remains subdued, affected both by connectivity challenges and structural issues. Long-haul travellers from the US and Europe, who often rely on West Asian transit hubs, face higher costs and longer travel times. “This can influence travel time, cost, and convenience, which are critical factors for inbound tourists,” Gosain said.
Mehra was more blunt about the domestic policy environment. “Inbound is really passive, not much happening as we are doing almost nothing to draw in tourists from abroad to India. The budget for promoting the country abroad has been cut to Rs 3.5 crore, which tells the story,” he said.
Despite the disruptions, industry executives emphasise that overall travel demand has not collapsed but is instead being redistributed. “Travel has not stopped, but it has become more dynamic and responsive,” Gosain said.