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The growth of broadband and mobile internet in India speculated a doom for many of these travel agents nevertheless the broadband boom and now mobile is said to have only become a blessing in disguise for many of the offline agencies who have come online. Online travel industry is still relatively nascent in India with even less that three per cent of the market share however, it is said to take another two years for this space to see double digits growth. However when it comes to individual performance every agency boasts of high growth, take for instance MakeMyTrip.com, which claims to have grown by around 88 per cent over last fiscal year, which is said to be 15-20 per cent higher than industry growth. Cleartrip eyes 60 to 70 per cent increase in 2010/11 as against 2009.

While the United States is said to be the largest online travel market in the world, India is also soon catching up with over an estimated 40 per cent of the airline tickets being sold online. This apart, many of these OTA’s are also seeing a significant increase in hotel bookings and train tickets as well. However one of the main challenges also lay in the low broadband penetration in the country.

exchange4media.com, spoke to couple of industry players to find out more on the state of online travel agencies in India, the challenges and the future trends.

Where they stand
Deep Kalra, Founder & CEO, MakeMyTrip.com, stated, “While the US market is clearly the largest online travel market in the world, the ‘offline to online shift’ has been the fastest ever in the Indian market, with over 40 per cent of all air tickets being bought online, in under three years. From $295 million in 2005, the market for online travel bookings is estimated to grow to US$ six billion by 2010 and OTAs are expected to corner around 23 per cent share of the total travel market. The focus for most players is on profitability. Discretionary travel has of course been impacted by the economic slow-down. We’ve seen that people are now taking shorter vacations and in destinations closer to country. There is also a marked reduction in long-haul destinations especially towards Europe and the Americas.”

Ashwin Damera: CEO and Co-founder, Travelguru.com noted, “Travel Portals are still less than 2-3per cent of all travel transactions in India. The industry therefore is still very nascent. We will have a better assessment only on the next 2-3 years when the industry has double digit share of bookings. However, we should see strong transaction growth in the years to come. Online travel is the fastest growing category in the e-commerce segment. The customers are realizing the benefits of using online travel portals to book their hotels through online travel portals as it is easy and saves them time. Features like Maps (locate the hotels on the map), Hotels Reviews (read customers feedback of the hotel before they book), Amenities, Video Tour etc and also offer great deals / offers, special credit card promotions and so on.”

According to Noel Swain, VP – Marketing, Cleartrip, “There have been a tremendous amount of adoption of booking travel online over the past three years and it has become more significant over the past two years, especially by low cost carriers which started using online as their key distribution networks. We’ve been around 3 years now and we have grown from booking few customers a month to now booking over 7000 tickets per day. We have also seen continuous adoption month on month over the past three years where customers use online channels to not only book airline tickets but also graduating to other products like that of international and domestic hotels and most recently railways.”

Battling the economic slowdown
Kalra explained, “By the second half of 2008, as demand from international tourists and corporate dried up, most players were facing a downturn – including suppliers (airlines and hotels) and also a lot of intermediaries. The Online travel industry was fortunate as it gained market share from the offline players. MMT grew over 100 per cent (from 2007 for the first eight months in 2008) and registered over 80 per cent growth in the period Sep-Dec 2008 thus averaging a 90 pre cent y-o-y growth.”

“The phenomenal growth is noteworthy as industry has shrunk over the last few months and most of it has come from the fact that, more customers are turning online in search of good deals, and within the online space the competition is becoming less fierce as some players are finding it harder to keep throwing advertising money to buy revenues. Since technology is our backbone, the operating costs for OTAs lend themselves to fewer wastages or components that can drive savings. So the success of OTAs would be largely dependent on increasing margins from existing products and non-air revenues going up” he added.

According to Damera, “The travel industry did get effected by the slow down, with customers hesitating to spend on their holidays. Travelguru and the hotels came out with great offer this year like 25 per cent cash back on Hotels, Travelguru had magic holiday earlier in the year which gave customers the 3rd night free on booking 2 nights. Currently there is a similar offer for hotels in Goa… In this way we were able get great offers to our customers. This indirectly saw us getting increased bookings.”

The trends to watch out for
Kalra said, “Focus area for us will be to drive bundled and accommodation products online as well as also increase contribution from retail channel. We are looking towards launching online car rentals and airport transfers soon. It is a natural attach to our various other products such as air and holiday products. We are also offering bundled products like flights-plus-hotels to incentivize booking for nascent categories like hotels. I see online hotel buying as the big high for OTAs as also new products like Buses and Railways moving online. Also for MMT, Retail is a priority with our 20 branches we believe that packages will sell via retail and call centre.”

He further said, “Domestic Travel bookings on MakeMyTrip domestic have seen a growth of 127% in FY08 – during the current year we expect strong growth to continue at over 100%. Domestic tourism is a key thrust area as well as packages to SE Asia and Europe. The big growth however will occur in the outbound travel segment – more Indians now prefer to travel overseas and with domestic airfares rationalised after the zero-rupee ticket days, we expect domestic travellers to convert into international holidays. Also we intend to continue our dominance of the OTA market by continuing to grow strongly in the air, hotel and packages business. The share of the hotels and packages revenue mix is much healthier. With our non-air business picking up significantly we are on track towards our targets.”

Damera said, “We are expecting a healthy growth next year. We have seen the economy pick up and consumer confidence growing. This has led consumer to start spending on a holidays. In general the mood in up beat and we will see growth in hotel booking in the next year too. There is increasing focus on profitability and non-air products. Some people are experimenting with trains, buses etc. Also the role of web 2.0 media is being felt and we have to give more importance to the Twitters and facebooks of the world.”

Swain observed, “Customers are graduating from buying purely air tickets to other products online as well and this is one trend that will continue to grow. We will also see new products making a mark specifically products like domestic hotels and international flights and domestic rails too which I believe has a tremendous potential as a product.”

One of the challenges, according to industry players, is getting more Indians to buy their traveling accommodation needs and bundled products online. This apart, another big challenge, as the industry sees it, is to make flight-based OTAs more profitable, especially if airline commissions change and Internet penetration in India goes up. And while the online travel agencies are still at a nascent stage in India, industry honchos are very optimistic on the road ahead, particularly as Internet penetration increases.

Travel portals gear up as better days return

With business and leisure travel picking up once again, travel portals are going all out to woo consumers with new discounted packages and an increased focus on making the digital medium more user-friendly. A few are also looking at setting up a brick-and-mortar presence to assist high-budget travellers looking for more credit before booking online.

Travel portals like makemytrip.com , yatra.com , cleartrip.com and travelocity.com say tariffs are at their lowest right now — be it at hotels, railways or airlines.

Post October, however, prices are again expected to start picking up due to the overall recovery in the economy as well as the festive season round the corner.

Keyur Joshi, co-founder and COO of makemytrip.com , says: “Because of the higher volumes we handle online, cost per transaction is substantially low for us and therefore it is possible for online travel agencies like ourselves to pass on the price competitive benefits to consumers. We book around 10,000 tickets per day. Compare this with 400-500 ticket bookings per day handled by offline, brick-and-mortar agencies.” The company has seen a year-on-year (YoY) growth of 60-70 per cent in revenues, while online visitors have grown 25-30 per cent.

“Hotel and airline companies are ready to give a sweet deal if it is a bundled offer and in larger volumes. So, while a Delhi to Calcutta flight and a hotel booked separately would cost Rs 12,000 per person, a bundled offer would cost Rs 10,000 or so, if booked online,” adds Joshi.

Going forward, makemytrip.com is working on introducing weekend getaway packages for online booking. These would also take care of local taxis and guides at the tour destinations. “This is a big initiative since it would include overseas destinations as well,” Joshi said. Ashish Kishore, head of hotel and retail business at Yatra.com, said, “We handle volumes of Rs 10 crore per month and this is growing at 25 per cent per annum.”

The company has 12 ‘holiday lounges’ in India currently and is planning to set up more. “Holiday lounges are important for high-end vacation travellers who spend more than Rs 1 lakh per trip. They want to touch and feel before making bookings online. In the last one year we have set up 12 holiday lounges for high-end international travellers. Overall, we see 10-12,000 customers per annum of which 5,000 customers are high-end travellers,” said Kishore.

Cleartrip.com, on its part, has seen a growth of 30 per cent in online traffic with 4.5 lakh visitors on its website everyday. Noel Swain, vice- president of marketing, Cleartrip.com, says: “July to August, which is traditionally considered the lean period for hotel business, has seen a 30-40 per cent growth in travellers during these months this year compared to last year same period.

“We are planning to add more features and search engines on our website to help visitors plan trips better as well as make packages more price competitive. We will install a search engine to return the lowest fares for a specific period. Also, we are working on adding various offers for the next festive season in terms of discounted packages. Right now airfares are 30 per cent lower than corresponding period in the previous year, but may increase by 10 per cent from September. So this is the best time to plan trips,” Swain adds.

Himanshu Singh, managing director of Travelocity.com, says the company has started offering users a 50 per cent discount on the basic airfare for any airline. Also, it has launched a Rs 1,000 cash back offer on booking at any of our 60,000 listed hotels in the world — 1,000 of which are in India. “We are planning to improve the search engines on our website and add new features to offer multi-stop functionalities. For instance, a user flying to New York would have the option to stop in London for two days. The same multi-stop functionalities would be available for domestic destinations also,” Singh says.

Tata Sons Gets Ownership Of MakeMyTrip’s OKTATABYEBYE Domain

MakeMyTrip is going to appeal against the order,
CEO Deep Kalra has told MediaNama, adding that ”Ta ta is a generic that everyone understands.”
Strangely enough, there is no appeals process at WIPO, so MakeMyTrip will file an appeal in India to stay the transfer of the domain name.
Original Story: Strange though it may appear, it looks like MakeMyTrip will have to bid ta ta adieu to its travel community brand OKTATABYEBYE.com: Tata Sons, one of India’s largest business conglomerates, has been given ownership of the domain OKTATABYEBYE.com by the

WIPO Arbitration and Mediation Center.

The decision in favor of Tata Sons was taken by a sole panelist: Indian lawyer Pavan Duggal.

Tata’s Complaint

Tata Sons had contended that the domain name oktatabyebye.com included the word TATA, and infringed on the registered trademark: that there is a scope of confusion in the minds of consumers. They beleive that the registrant has no rights or legitimate interest in the domain name since it hasn’t been licensed to or granted permission by Tata Sons, and the company in question is commonly known as MakeMyTrip, not OkTataByeBye.

MakeMyTrip’s Response

MakeMyTrip responded saying that oktatabyebye.com, their online travel community is
different from its ticketing and services,  and allows users to create travel blogs,
recommendations, reviews etc; more importantly, the domain is representative of the colloquial “OK Ta Ta Bye Bye”, which represents travel, journey and related activities, referring to the generic word “Ta Ta”. Hence it doesn’t infringe on the trademark.

The Verdict

According to the filing, Duggal visited OKTATABYEBYE, and noticed that the monetization of the community, through hotel bookings and advertisements was from MakeMyTrip; he has observed that The purpose of utilizing the domain name oktatabyebye.com appears purely to funnel Internet traffic and thereby bring it to the website “www.makemytrip.com” for commercial gain.

After citing other rulings of cases, particularly those related to Nokia, where registered trademarks were transferred to the complainants, the panel ordered
that the domain name be transferred to the Complainant – Tata Sons.

Our Take

Ta Ta is colloquial for farewell, and I don’t think MakeMyTrip intended to use the
registered trademark of the TATA group in the OKTATABYEBYE. Secondly, there’s nothing wrong with trying to monetize a travel community via an affiliated business like MakeMyTrip: given Duggals experience with the Internet domain, he should know that. Would he fault Google for monetizing Blogger with Google Adsense? I disagree with the verdict and find it strange that the Tata Sons should even try to get this domain back. Wonder if they’ll ask singer Tata Young to change her name next.

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