New Delhi, May 12 -- The US-Iran war has crimped energy supplies, raised fuel prices, threatens to spike India's import bill and thus strain its foreign exchange reserves. It was in this context that Prime Minister Narendra Modi appealed to citizens on Sunday to cut fuel use, avoid unnecessary overseas travel and explore domestic destinations instead.

For some affluent Indian travellers, that shift is already underway-India's premium domestic destinations are seeing stronger demand, higher occupancies and rising room tariffs this summer.

A Delhi-based family of nine abandoned their usual summer plan of a European holiday as business class tickets surged past Rs.5 lakh a seat on some key routes, nearly double the typical fares. Moreover,...