Ticket to surf

Investments are pouring into online portals for add-ons.

As visibility and business increases for online travel portals in India, investor confidence in the industry is high too. Travelguru has got a second round of capital "" $ 15 million "" from Battery Ventures and Sequoia Capital India.

Makemytrip too has been reported as getting $13 million from Helion Venture Partners, Sierra Ventures and SAIF Partners. Yatra's co-founder Dhruv Shringi says they are also evaluating funding opportunities.

A good chunk of the new funding for Travelguru will be used for setting up retail outlets in the top 10 cities across India.

"We will be spending $4-5 million to set up 30-35 retails outlets over the next 12 months," says Ashwin Damera, CEO and founder, Travelguru. These would be focused on vacations, holidays, cruises and hotels.

The 400-500 sq feet spaces will be in high-density areas where the business potential will be high. And of course, technology will play an important part in these outlets.

It will offer customised itineraries, mostly to individual travellers, and also provide all the other services that the website provides. So you could walk in to a Travelguru retail outlet and plan your entire honeymoon package with their executives there. You can actually get an experience of the destinations you plan to visit.

Though the concept sounds good as it helps in eliminating some of the problems involved in selling outbound packages through the online portal (such as insurance, visas and passports), Sandeep Murthy, CEO of Cleartrip, feels that setting up retail outlets means diluting the online travel agency model.

Currently, Cleartrip is working on developing a solution to offer dynamic, customised packages online, both domestic and international.

In fact, Damera pointed out that if there is a need for support from an outbound travel agency, they would explore the possibility of buying out an outbound company. They will set aside about $5 million for upgrading technology, office space as well as new acquisitions, if needed, over the next two years.

Their new marketing efforts will include increased presence on television as well as targetting travellers between the United States and India, both NRIs and foreign nationals.

Though Travelguru's major thrust will remain domestic since it offers both volumes and customer familiarity, as a strategic initiative the company will also explore the inbound travel market. Travelguru already has a section on its website where one can pay in hard currency.

In a year's time, the company hopes to get at least 10-15 per cent of its business from inbound travel, and later also integrate inbound flights into their system.

Others in the online travel space are also gearing up and developing new strategies to tap into the ever-increasing e-commerce market.

Currently, Yatra is spending about Rs 2-3 crore on marketing on television (for 6-8 weeks). And Cleartrip is busy adding more airlines to its website and doing promotions with Indiaplaza. Get ready for a cyber war.