The growth comes alongside a preference for closer international destinations, with Asia-Pacific emerging as the dominant region for outbound travel.
Japan recorded the highest surge in bookings, rising 17% in 2026, making it the top destination among Indian travellers. Thailand followed with a 12% increase, while Vietnam saw a 7% rise. Singapore and Malaysia maintained steady demand, and Sri Lanka gained traction as a value-driven destination.
In contrast, travel to the UAE declined by over 70%, impacted by regional tensions and safety concerns. Long-haul travel to Europe and the US also softened due to higher airfares and airspace restrictions, pushing travellers toward shorter and more cost-efficient Asian destinations.
At the same time, insurance preferences have shifted toward higher protection levels. Travellers opting for coverage above $250,000 have doubled compared to earlier years, indicating a move away from basic policies. Rising medical costs and evacuation risks are driving this change.
Add-on covers are also seeing evolving demand patterns. Medical cover remains the most preferred at around 75%, followed by trip cancellation cover at nearly 50% and evacuation cover at about 40%. Adventure sports cover, though still niche, is gradually expanding. Demand is also rising for protection against flight delays, rerouting, and airspace disruptions.
Travel behaviour is also becoming more cautious and flexible. Cancellation requests have increased by 32%, while many travellers are delaying bookings closer to departure dates. With travel costs rising by 20–25%, travellers are opting to adjust plans rather than cancel, choosing shorter trips and nearby destinations.
Manas Kapoor, Business Head, Travel Insurance at Policybazaar.com, said Indian travellers are not reducing travel but are adapting to global uncertainties with more flexibility and stronger protection.
He noted a clear shift toward Asia-Pacific destinations and increasing reliance on insurance as a core part of travel planning rather than a formality, driven by medical inflation, evacuation risks, and geopolitical uncertainty.
