Clicking growth in India

Growth in travellers and netizens is boosting the prospects of travel portals, even as new ones spring up to claim their share of the pie.

Juxtapose India's tourism growth with the growth in its online economy and you would see a clear business case for the large number of travel web portals which have sprung up.

Today, according to Ashwin Damera, CEO and co-founder of Travelguru.com, the Indian online travel business is worth $ 350-400 million and is growing 40-50 per cent year on year.

The growth is not surprising, given that the country's online population totals 25 million currently, and is projected to increase four-fold to 100 million by 2007.

However, the scope for growth is immense. While 63 per cent of the tickets are sold online in the US, online sales account for only one out of 10 tickets (9.7 per cent) in Asia Pacific, says Bruce Hanna, COO, InterGlobe Technology Quotient. The company provides solutions for the backend of the websites of many low-cost-carriers in India.

No wonder most companies are posting healthy growth rates. MakeMyTrip.com (MMT) has been growing sales at about 20 per cent month-on-month, for the last four months, selling 1,400 tickets a day on an average, according to Keyur Joshi, co-founder and COO.

Travelguru, on the other hand, is still a comparatively smaller player, selling about 500 tickets a day today, though it plans to take it up to 1,000 by the end of this year.

Most agree that online bookings in India were started by the low cost carriers. Among them, Air Deccan sells the most on the net. SpiceJet, a close competitor, sells tickets worth over Rs 2 crore a day through the website, says associate VP, marketing and planning, Sanjay Kumar.

About 70 per cent of their sales are through the website while the rest is from their call centres and airport ticket counters. In April 2006, they sold 1,80,000 tickets.

Indian Railways is also selling its tickets online. "Our website IRCTC.co.in sold 3,88,206 tickets in March 2006, up from 3,343 in August 2002 when it was launched. It saw over 100 per cent growth in 2005-06 over the previous year," says Amitabh Pandey, group general manager, IT Services, Indian Railway Catering and Tourism Corporation (IRCTC).

A thrust area, now, for most online players will be non-air bookings like hotels, car rentals and packages. Non-air bookings for Travelguru stand at about 15 per cent today but are growing.

"Though the market is small, non-air gives us double the yield compared to selling tickets," disclosed Damera. For MMT, both air and hotel segments are growing at about 20 per cent month-on-month. Their focus in 2006-07, says Joshi, will be more on non-air bookings.

The growth in the online travel business today might be phenomenal but Hanna feels that "what is going to differentiate online players is the whole experience for the customer...it has to be right and you have to get it right the first time round. Otherwise you could deter the customer from using your website for many months."