This surge coincides with a preference for nearby international locations, with the Asia-Pacific region becoming the leading area for outbound travel.
Japan experienced the largest increase in bookings, up 17% in 2026, making it the most popular destination for Indian travellers. Thailand saw a 12% rise, while Vietnam’s bookings grew by 7%. Both Singapore and Malaysia showed stable demand, and Sri Lanka emerged as an appealing value-oriented option.
Conversely, travel to the UAE dropped by over 70% due to regional tensions and safety issues. Long-haul trips to Europe and the US also declined, influenced by rising airfare costs and airspace limitations, steering travellers towards shorter, more affordable Asian locales.
Simultaneously, there has been a shift in insurance preferences toward higher coverage levels. The number of travellers opting for policies exceeding $250,000 has doubled from previous years, reflecting a departure from basic insurance plans. Increasing medical expenses and evacuation concerns are driving this trend.
Demand for add-on covers is also evolving. Medical coverage is still the most sought after, at approximately 75%, followed by trip cancellation coverage at nearly 50% and evacuation coverage at about 40%. Although adventure sports insurance remains niche, its popularity is gradually increasing. Additionally, there is a rising interest in protection for flight delays, rerouting issues, and airspace disruptions.
Travel behaviour is becoming more cautious and adaptable. Cancellation requests have surged by 32%, and many travellers are postponing bookings until closer to their departure date. With travel costs climbing by 20-25%, individuals are more inclined to modify their plans instead of cancelling, opting for shorter getaways and nearby destinations.
Manas Kapoor, Business Head of Travel Insurance at Policybazaar.com, stated that Indian travellers are not cutting back on travel; rather, they are adjusting to global uncertainties with greater flexibility and enhanced protection.
He emphasized a noticeable trend towards Asia-Pacific destinations and the increasing incorporation of insurance as a fundamental aspect of travel planning, rather than merely a formality, driven by medical inflation, evacuation risks, and geopolitical instability.
