Gone are the days when one had to make several annoying phone calls to an airline company or travel agent to get that one air ticket from Bangalore to Mumbai. Now through online travel portals, within minutes you can book your ticket on your favourite airline and hotel accommodation, all at a surprisingly low cost.

Booking travel tickets and hotels online is not only a convenient option, but an attractive choice with all the goodies that come along with it today. If you are booking tickets through an Online Travel Agent (OTA) like Cleartrip.com you might get a Motorola L6 mobile phone worth Rs 6,020 absolutely free! You can also get lucky by using the site ezeego1.com, where if you book an air ticket you might get the second one free, through their ‘Ticket pe, Ticket offer.’ Or look at the offer of MakeMyTrip: if you make hotel reservations on the MakeMyTrip.com site you can get cash back for your return train journey. Also while planning a weekend getaway on yet another site, you might land up with a deal that gives you 40 per cent cash back for well-known destinations. While surfing online travel sites you can get entangled through a plethora of holiday packages which include five star hotels, excursions like scuba diving, para-sailing, weekend treks, cruises; all available at your fingertips.

Market scenario
If OTAs are trying to entice travellers with so many freebies the reason is simple: drive traffic online and make money on volume. The Indian Travel and Tourism (T&T) industry has come a long way, adopting the latest technology of online booking; giving more choice and transparency to consumers. According to industry predictions the Indian online travel market will grow from Rs 1200 crore ($295 million) in 2005 to Rs 8000 crore ($2000 million) in 2008.

Growth factors
When an economy grows the travel industry will be the first to improve earnings. With the Indian economy booming the online travel industry is now a burgeoning segment in the travel industry. Growing consumerism among the middle class with higher disposable income and readiness to explore are some of the reasons fuelling growth in this sector.    

The industry also got a boost with the surge in internet users, creating greater awareness among customers. Online bookings offers the customer to take control of their deals, unlike the agent-assisted bookings. Similar to a combo meal in a fast-food joint, these portals also have best fares bundled with hotel bookings and other facilities in package deals.

Of course, the main reason behind the boom is the launch of low cost carriers that has made air travel a big bang activity. The ease of payments using credit cards and efficient systems help customers choose domestic flights across eight airlines, sitting in the comforts of their home. The growth of M-commerce (mobile) is also supporting the rise of the OTAs. Ashwin Damera, Founder & CEO, Travelguru feels, “The two year old online travel industry was essentially driven by airlines offering very low prices, exclusively on the internet. Online travel agents took it to the next level by letting customers compare prices between multiple airlines. This was a clear value addition for customers and has driven growth over the last two years.”

Then came innovative travel financing schemes (some time with 0 per cent EMI), offered by credit card companies, such as the 30 per cent cashback promotion with MasterCard, to further propel the growth.

Agrees Sandeep Murthy, CEO, Cleartrip.com, “The travel demand in India has been spurred by many contributing factors; sustained economic growth and heavy infrastructure investment.” 

Luring travellers
OTAs are extremely innovative in attracting customers. Indiatimes travel, for example, offers auction for its airline tickets where you can grab a deal as cheap as Rs 2,500 for a round trip — Bangalore to Mumbai. “The auction has generated a lot of action and we are seeing four times the growth,” says a spokesperson for Indiatimes Travel Portal.

Deep Kalra, Founder & CEO of MakeMyTrip.com feels that the success of online ticketing process kicked-off by Indian Railways nearly 10 years ago, has given tremendous confidence to people to go ahead and explore new ideas.
“Also binge travels are on an all-time high. Youngsters are going to Bangkok, Thailand, Malaysia, Singapore easily as cheaper air fares are available. There is growth for both domestic and international travel,” says Kalra. The OTAs along with flight bookings offers hotel reviews, ratings, maps, video clippings etc, which helps to create stickiness to the site.

Some of the other services offered are the car rentals, cruises, bus travel and in the future train travel if everything works out. For the convenience of customers OTAs are even giving search options on mobiles and SMS alerts. As soon as a person lands at the airport, for example, he gets a SMS telling him an AC car is available for the full day at Rs 900. Kalra says Makemytrip plans to offer bus travel soon and is looking for a tie-up with the Indian Railways to offer hotel booking with rail travel. Damera’s Travelguru, on the other hand is planning to build on its cruises in its itinerary. “The Indian cruise market is quite nascent, but many innovative deals are now being offered with the Star Cruises line this year. We averaged over 2500 bookings in the western and southern zone itself,” he said.

Looking ahead
Most OTAs today are seeing their business doubling every month when compared with previous year. MakeMyTrip has grown from Rs 200 crore in the year 2005-06 to Rs 550 crore in 2006-07, nearly a 175 per cent growth. By the year 2008-09 Kalra expects to double the revenue to Rs 2,000 crore.

Giving a glimpse of the future, he adds, “At least five new international airline carriers are set to enter the market in the next one year, which will further boost the services. The hotel industry is set to grow, for instance Bangalore is to add 6,000 hotel rooms and apartments by 2012; 100 per cent more than the current capacity of 2,500 rooms.” Travelguru too expects a huge growth in revenue.

Promotional offers
With competition rising each day, the OTAs are bringing out newer exciting offers to woo customers on their site. For instance MakeMyTrip has got an offer where if you are travelling by train, by booking hotel accommodation on the site, MMT will give back money for a one way journey. All the customer has to do is make the bookings and send the train ticket by email. “As a part of our advertising campaign we are piloting retail initiatives through Spencers, Subhiksha and BPCL,” reveals Kalra.

Murthy of Cleartrip says, “We currently see demand for domestic products. As a distribution strategy we will also be seriously looking at the retail channel. To start with, we have four branded kiosks at Big Bazaars in Mumbai to gauge consumer reaction for buying travel-related products and service in a hypermarket environment. We are also talking with Future Money to explore options, which would make this synergy a one stop shop for all consumers that want to book their travel plans.

While booking on Travelguru site you might stumble upon offers like book one night in Sri Lanka at a Taj Hotel and get the second night stay free. And as for Indiatimes, they have offers such as free stay on buying air tickets for Spicejet or Indigo or free gifts with all international packages.

So next time you purchase tickets online, you may get lucky with a free family trip to an exotic beach resort in Thailand or get to see the Merlion in Singapore. Surely customers are the biggest beneficiary of the competition among online travel agencies trying to rope in more and more travellers.