The winds of change are blowing but the direction they are going to take is yet to be determined and the stakeholders can have a bearing upon it depending how quickly and the manner in which they react. With these changing market dynamics a number of scenarios are likely to emerge. it is time for Online Travel Agencies (OTA) to get ready for some tough decisions.
As per latest reports Indian OTAs are under a serious threat as commissions per ticket, after falling from 10% to 5% and now moving towards 0%. Approximately 35,000 agents and sub-agents will be forced to shut shop, because of commission erosion. On the other hand travel is expected to cross USD 6 Billion by 2010. So one thing is clear, that while scope for tremendous growth exists the business model will have to change.
Another threat to the online travel agencies has come from an unexpected source that is the India Post which has evolved into a key distribution channel for ticketing. They have recently launched a scheme called Ease-Ticket, a centralized reservation system (CRS) for Air, Rail, Bus and Hotel/Car reservations. The focus is on making all forms of travel available on a single platform. This scheme is modeled on the US Posts System (<"http://www.usps.com/" target="_blank">http://www.usps.com/<) and could prove to be a lucrative and successful one considering the low broadband penetration and computer illiteracy factors in India.
Thus the challenges are many and the way forward is being shown by the industry and its players themselves. Here are some of the changes that have been and could be brought about are:
- A number of bigger players such as TravelGuru with its concept of Desiya and MakeMyTrip’s Holiday Plus are changing strategy by now positioning themselves as travel portals that provide comprehensive and across the platform bookings for flights, trains and bus journeys as well as hotels and car rentals. For example, iXiGO, one of India’s fastest growing online travel search engines, has launched a bus search tool that enables search, comparison and booking of bus tickets from multiple bus operators and bus booking sites in India. Using the tool, deals from multiple sites can be compared on a single platform. On similar lines Cleartrip has launched Rail Search recently.
- Travel 2.0 is another concept that is finding takers. This concept includes travel as well as social networking features, comparisons, travel tips and user generated content. These added features would make a travel portal a one-stop site for entertainment as well as travel planning and a blogging platform too.
- Another competitive tool added by iXiGO allows users to search comparative rates among the major players - Yatra, Cleartrip and MakeMyTrip. Users have to simply click three checkboxes while searching for the airfares on iXiGO. Cleartrip on the other hand has launched Cleartrip graphs that provide users with indicative prices across range of dates for 9 different airlines. This enables users to find the cheapest fare rates across different carriers.
- On a completely different tangent, Yatra has taken the brick and mortar franchisee route to spread its wings. Yatra has entered into a joint venture with Sify Technologies to increase the penetration of its travel related services. According to the agreement Sify retail points would offer Yatra.Com’s travel services with an integrated cash acceptance model. Consumers can book all domestic airlines tickets with instant confirmations, hotels and resorts by paying cash over the Sify counters. This kind of strategy opens up access to thousands of potential users in smaller cities and non-metros, who are still not comfortable with Internet transactions. So probably the emerging trend would suggest coexistence of online and offline versions together.
- Another oft ignored area especially in the Indian context is of pro