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, makemytrip.com
and more recently cleartrip.com are making a beeline for the almost US $ 800 million
Indian online travel market.
Some global players such as travelocity.com
and expedia are also targeting Indian market aggresively. 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 US $ 13.5 billion. The Indian online travel market, which is estimated
at $ 796 million in 2006 is expected to rise to $ 2 billion 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 close
to 20 per cent per annum. Currently 90 per cent 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
targetting 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 per cent
of the business and online distribution mainly focussed on sale of flight tickets.
Hotel bookings account for just 10 per cent of the business," said Javed
Akhtar, CEO, Travel Port.
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 travelers. 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. For a firm like ours more online portals means greater business
opportunity," said Rajnish Kapur, executive VP, practice and market development,
Kale Consultants. |
