Travel savings schemes, EMIs see higher off-take
Chennai: Travel industry is witnessing a spurt in the number of customers opting to travel on EMI scheme or by investing in savings plans.
Both domestic as well as outbound travel is witnessing steady growth year-on-year as the mindset of people, especially the middle class and the youth, are rapidly changing for the better. Affordability too has increased not just because of the rise in disposable incomes, but the industry too has become proactive towards making travel affordable for more number of customers.
Most of the travel service providers are currently offering travel loans repaid over equated monthly instalments. “Taking travel loans is common in 21-40 age group. It is a phase when a person possesses high travel aspirations, but is either not completely settled in terms of earning capacity or has many other financial responsibilities. Travel loans have become a viable option for the new generation,” finds Karan Anand, head, relationships, Cox and Kings.
For the past two years, Cox and Kings has seen travel enthusiasts smartly using travel loans to their benefit. This year it has witnessed a two-fold growth in the number of travellers preferring EMI option. Of the total number of travellers, 8 per cent are availing the facility this summer season.
Thomas Cook too has 8 to 10 per cent travellers utilizing the EMI and it expects this share to go up to 30 to 35 per cent in next five years. Thomas Cook has tie-up with Bajaj Finserve and Tata Capital for the EMI scheme. Apart from the large customer base of these financial institutions, youngsters who are comfortable buying consumer electronics and durables on EMI, too are increasingly opting for such schemes, said Abraham Alapatt, president and group head, marketing, service quality, value added services and innovation of Thomas Cook India.
Thomas Cook also has a travel savings product, which allows the customer to fix the price ahead of the travel, save a specific amount for 12 months and receive the 13th instalment from the company and the bank. The company as tied up with seven banks for this travel savings product.
“We launched this product in 2016 and last year more than 7,000 new customers travelled using their accumulated savings. This year, the number is expected to be more than 10,000. The demand is robust, but limited availability of airline inventory is restricting us from offering the product to larger number of customers,” said Alapatt.