PUNE: THE travel boom in India has had an unexpected spin off. A large
number of Online Travel Service (OTS) portals such as xplorz.com, make-mytrip.com
and more recently cleartrip.com are making a beeline for the almost $800m Indian
online travel market. Some global players such as travelodty.com and expedia are
also targeting the Indian market aggressively. This is leading to established
travel companies clawing back their market share from portals by going online.
According to PhoCusWright Inc, the travel, tourism and hospitality research
firm, Indian travel market both offline and online together is valued at $13.5bn.
The Indian online travel market, which is estimated at $796m in 2006 is expected
to rise to $2 bn by 2008.
So, it is back to click and mortar, a hybrid
model of online and offline travel services. While International Travel House
(ITH) is planning to launch its online portal by first week of January 2007, both
Cox and Kings and SOTC are looking at joining the fray by March 2007.
"Our business has not been affected by online portals as the travel industry
is growing at a rate of dose to 20% per annum. Currently 90% of the online business
is domestic air and rail tickets only. Online is one more distribution channel
to sell travel products," said Urrshila Kerkar, CEO India, Cox and Kings.
"We had planned to go online two years back but since we ran into
a spam issue we could not launch it then. But now, the work for the portal is
done and payment gateway integration will go on till December 31. We will be able
to launch the online portal by the first week of January 2007," said Kamal
Hingorani, executive VP, ITH.
Although a lot of hotels and airlines
are directly targeting the end customers for online bookings, industry experts
think that it does not affect them as there is business for all.
"The ability to combine multi-product offering coupled with travel/ non-travel
products is a value only an online travel agent can provide. Comparison of multiple
brands of say airlines or hotels on a single window is made available through
online travel agent.
Also, with the help of a travel portal the travel
and tour operator can reach out to their existing distribution base faster and
cheaper," said Sunil Gupta, COO, SOTC.
"There are around
30 million credit card users and 40 million Internet users in the country.
Travel distribution in India is highly fragmented with 20,000 agents accounting
for over 80% of the business and online distribution mainly focussed on sale of
flight tickets. Hotel bookings account for just 10% of the business," said
Javed Akhtar, CEO, TravelPort.
This boom in the online travel has
not just got customers and industry players singing its tune, but even software
solution providers to travel industry such as Kale Consultants.
"
The travel portal is actually a one-stop-shop for leisure travellers. Lot of portals
not only offer the lowest online airfares across all travel, but also hotels and
car rentals. A portal allows consumers wider choices by bringing together content
from various sources and enables comparison shopping. It's evident that the online
travel industry is attracting new players while existing ones are certainly gearing
up their operations to meet the demand and stay ahead of the competition. |
