Virtual competition

Expedia and Travelocity will challenge domestic players.

Our extremely popular homegrown travel portals are in for some serious competition "" this time from international bigwigs. Both Expedia and Travelocity have plans to launch in India soon.

In fact, Travelocity already has a managing director (India), Himanshu Singh, who confirmed that the portal would be launched before the end of this fiscal.

Expedia's Henrik Kjellberg, SVP, International Lodging and Destinations Services, on the other hand, confirmed that they were looking for someone to head their operations in India, but did not commit to a launch time frame.

There has been a phenomenal growth in the Indian online travel market, from $295 million in 2005 to $796 million in 2006 (a growth of 176 per cent). This is further set to go up to $1,325 in 2007 and $2,004 in 2008.

Even as both the players set out to start off on their own in India, the industry insiders speculate that as the business matures, we could see some consolidation by these large players.

While sources claim that Expedia is planning to begin with a hotels-only website, Kjellberg says that it is too early to say anything yet.

According to him, at the moment, they are only lining up people in India. "We are not in a rush and we want to do it right," he says.

Travelocity, comparatively, is at an advanced stage. The India launch is being managed by Zuji, which manages Travelocity's assets in Asia. "We plan to be in India for a long time. Ours is going to be a steady approach and we plan to bring the best in-class products and content into India," says Himanshu Singh.

The website will be customised to suit Indian needs. "We have spent a lot of money on conducting research on market trends in India," he says.

The website will also have forex and visa facilities, which are of great concern in this growing outbound market.

Another USP it plans to play on is the Travelocity Guarantee. All hotels on the site will be available real-time and will offer the best rate guarantee.

Other features of the site will include a very user-friendly interface, where one can actually compare four hotels at a time.

Also, Travelocity plans to concentrate both on the domestic as well as the fast growing outbound market in India.

"Inbound will start working by default as we will provide enriched India content to our international websites," says Singh.

He adds that bookings on the Internet are more compelling for smaller cities, where not many booking options are available "" a reason why they plan to target cities beyond the metros as well.

Indian customers, who are already spoilt for choice in the Indian market, are now in for more choices, and soon. But how many players will get accommodated in this competitive market and yet how many will eventually survive is the thing to watch out for.