India’s travel technology sector is entering a new phase of growth driven by artificial intelligence, increasing digital adoption, rising travel demand and expanding online penetration, according to a report by Motilal Oswal Financial Services, titled ‘Entering the AI Orbit!’.The report highlights the transformation of the travel ecosystem from a fragmented, agent-led offline model to digitally enabled Online Travel Agencies (OTAs), and now towards AI-powered travel platforms capable of delivering hyper-personalised recommendations, dynamic packaging, real-time planning and assisted decision-making.The Indian OTA market is expected to expand from Rs 2.1 trillion in FY23 to Rs 3.8 trillion by FY28, reflecting a CAGR of nearly 13 per cent. Online travel penetration is projected to increase to 65 per cent from the current 54 per cent, supported by favourable demographics, rising disposable incomes, improved transportation infrastructure, growing digital adoption and changing consumer preferences towards experiences.The report notes that India’s travel market remains underpenetrated compared with global benchmarks, creating a substantial opportunity for online travel platforms. Increasing adoption of 4G and 5G services, expanding internet access in smaller cities, and the growing preference for online booking channels are expected to further accelerate industry growth.Travel demand is also being supported by changing consumer behavior, including rising interest in spiritual tourism, concerts, sporting events and premium travel experiences. Improved connectivity and infrastructure development across Tier-II and Tier-III cities are broadening access to travel services and creating new growth opportunities for industry participants.Furthermore, the report highlights that technology and AI are becoming key differentiators in the sector. Travel platforms are increasingly leveraging artificial intelligence, machine learning, automation, and data analytics to enhance customer experiences through personalized recommendations, dynamic pricing, chatbot-led support and automated itinerary planning.The report identifies several long-term growth drivers for the sector, including the continued shift from offline to online bookings, asset-light and scalable business models, increasing corporate travel digitization, ancillary revenue opportunities and growing demand from emerging cities.The report also points to the industry’s fragmented nature, which continues to create opportunities for consolidation and market-share gains by organized players with strong technology platforms and extensive supplier networks.It concludes that Indian travel technology companies are well-positioned to benefit from structural growth in domestic and international travel, increasing digital adoption, and the ongoing evolution of travel platforms into intelligent, AI-enabled ecosystems.