Online travel Industry in India :
—Indian
online travel revenues are currently dominated by ticket bookings, with air and
train bookings accounting for close to 90% of the segment revenues.—Online
travel penetration was estimated at around 28% in 2011, which is significant
considering the
online travel
in China accounted for just 16% of the total travel, and that the APAC average
was at 18%.— Even
several developed countries such as Italy, Spain, Japan Singapore lag India in
online travel penetration. The online travel market is currently estimated at
Rs 24,900 Crore ($5.5 billion) in 2011.
The online
travel market
is expected to
grow at a rate of 22% over the next 4 years and reach Rs 54,800 Crore ($12.2 billion) in size
by 2015.
—This assumes
a growth rate of13% for
the overall travel market and online penetration increasing to 37% (from the
current 28%).
Online Travel Agents
—In the
US, the
OTA market
is dominated by Expedia, Orbitz, Priceline and Travelocity. CTrip,
Baidu, and
eLong lead
the show in China.
—India
seems to have followed the same pattern. As on March 2010, the top-3 OTAs
commanded a
90% market share. MakemyTrip (MMYT) was the undisputed leader with
48%
market share, followed by Yatra and Cleartrip.
Traditionally,
airline OTAs have struggled in bus travel - a different target segment .
—Top
20 travel sites in India. Ticketvaala and Travelyaari are the closest
competitors in the space.
However,
there are clear opportunities for them to offer domestic packages and deals
with tier 2-3 hotels
 |
Competition From Supplier Websites
|
—Most
supplier websites find
a spot in the top 15, with Indian railways at 1, Jet Airways (India’s largest
airline)
at 8, and Indigo, Spicejet and Air India coming in at 9, 10 and 11 respectively.
—Of
the online
travel market, supplier websites commanded a 61% market share in India in2010.
Infrasructure Barriers
Payment
Cash And Collection
—
Vendor Management:
—
Taxation
—
Logistics
—Information
Security
—Multiple
gaps in the current legal and regulatory framework
—
Limited Internet access among customers and SMEs.
— Poor
telecom and infrastructure for reliable connectivity.
Future Scope
The
online penetration of train travel is around 32% and for air travel is around 50%
the online
penetration in hotels and packages is less than 5% and that in bus
travel is
less than 4% of the total market today.
—For
MakemyTrip,, net
margins on air travel have hovered around 7% for the last few years. And train ticket margins
range between 5% and 10%.
— Therefore
the OTA
market has significant headroom for growth of revenues and
profitability going forward.
Existing
OTAs
will try to strengthen their position by: Getting into
unorganized sectors (e.g. bus ticketing)
—Foreign
players
will try to gain a stronger foothold in the domestic market
—Offline
players in the Indian travel market may try to develop a stronger position
online
—Expedia
and other major global players are set to expand the OTA market.
