Online invasion

Traditional players are breaking into the dotcom bastion in an attempt to double profits.

The lure of profits from exclusive online portals seems to be gripping small and big travel agencies alike. Though online travel agencies account for less than 5 per cent of the market currently, they are expected to double their share by 2008.

At the moment, a few traditional tour operators are thanking online travel agencies such as makemytrip.com and travelguru.com for exploring the Indian online travel market and providing them a chance to gain the "second movers advantage", as Urrshila Kerkar, CEO (India), Cox & Kings put it.

Kerkar feels it is time that travel agencies and tour operators functioning from the traditional brick-and-mortar structures adopt the online model as an additional distribution channel and revenue stream.

"It is imperative to adopt a joint online and offline model to succeed in India," she says, adding that the brand equity of a traditional player counts in the end.

Cox & Kings is agressively promoting its portal www.ezeego1.com, which is to be launched next month. Travel House too is investing

Rs 1 crore in upgrading its website into an online portal which will be operational in 2007.

The idea, they claim, is be different from what the already established online players are doing in the market. Sunirmol Ghosh, managing director, Indo Asia Tours, which is investing Rs 10 crore in developing and marketing www.indiaholidaymall.com, says their portal will offer customised packages which can be booked with or without human interface.

He expects to get business worth at least Rs 50 crore in three years and break even in 18 months after its launch by the end of this fiscal year.

Another advantage for traditional players who are going online is that they can reach out to their existing distribution base faster and cheaper. Sixty per cent of the business on Sahara Global's portal will be from B2B while the rest will be from B2C transactions.

"This gives us a chance to cut down on our distribution costs as well as attain economies of scale in our business," says Ashish Kumar, COO, Sahara Global, which has offices in 120 cities in India. The company also plans to offer incentives to their parabanking executives at 1,707 locations across India to sell holidays through the website.

"Through the website, a customer can book any product and use the option of paying through cash or other means at any of our outlets in India," explains Kumar.

Stic Travels, too, is working on its travel portal which will be launched in a month, at a cost of Rs 30 lakh. The portal, says Arun Khanna, head, strategic initiatives, will offer real-time hotel bookings and air tickets, both international and domestic. Car rental though will only be domestic.

They are trying to integrate a special module for cruise bookings. The company will also sell packages online, but with the help of a call centre. "Most people try and get their packages customised, for which human intervention is a must," he explains.

An interesting feature of the portal will be its dynamic online maps, he stresses, which will be updated monthly. Khanna is targetting about Rs 10-12 crore of business through the website by the end of March 2008. Now it's upto the exclusive online companies to get more innovative.