Travel agencies unfazed by online competition

Even as travel websites in India report robust growth figures, travel agencies seem unfazed by the success of their online counterparts.

India's travel and tourism market is presently valued around $50 billion. Of this, the online travel market makes up only around $1 billion. Thomas Cook, one of the biggest agencies in the country, handled nearly a million customers last year.

Company spokesperson Sachin Rampal said agencies offer a larger bouquet of services than the websites presently do.

"Internet penetration is still quite low in India. Moreover, people like to interact personally with agents while planning holidays," he adds.

Further, he added, agencies like Thomas Cook offer several other services such as foreign exchange, visa, travel insurance and hotel bookings which many websites don't. The company reported a turnover of Rs 255 crore for the 14-month period-ending December 2006.

Nandita da Cunha, manager, KPMG Advisory Services, believes that the growing demand for travel bookings from tier-II cities and the paucity of Internet access in these places is working to the advantage of the travel agencies.

"One still needs to interact with an agent for customised travel and complex itineraries," she added.

According to a recent research by KPMG, travel portals are also looking to set up offline presence in non-metros to reach out to those who do not transact online, either due to a lack of access or for security reasons.

Websites, of course, claim that the travel market in India is large enough for everyone.

Travelguru.com founder and CEO Ashwin Damera said, "The travel pie is growing and there is space for everyone. We have diversified beyond bookings, and have developed a large hotel network across the country and are offering international holidays as well."

But agencies aren't resting on their laurels. SOTC, the outbound travel division of Kuoni Travel Group India, plans to introduce a travel portal, which will provide a comprehensive range of services.

SOTC and Kuoni Holidays COO Sunil Gupta said, "As the travel industry is moving towards online services rapidly, we would like to keep up with the changes sweeping across the industry."

However, the confidence evinced by big agencies is not shared by the smaller ones, especially those surviving merely on ticket bookings.

A local tour operator (who did not wished to be named) said, "Many of our earlier customers now book tickets online, and even make bulk bookings. They come to us only for holiday packages. But sometimes, only to ask about rates and sightseeing tips."