Online Travel Industry – India

Online Travel Industry – India
August 2010

Executive Summary

Market Drivers & Challenges
Trends
Competition

Online travel market valued at INR a bn in 20--; Expected to reach INR b bn by 20-Online airline ticket booking share is more than p % Online Travel Agency (OTA) is the most sort after segment by the private equity players with huge investments in the past two years

Drivers:

Challenges:

SAMPLE – Proliferation of internet
– Growth in low-cost carriers – Rising income – Secure payment mechanisms – Indian Railways online portal

– Low margins & high operating costs – Poor internet and credit card penetration – Lack of technical awareness and reliability on
online transactions

– Rise of Medical Tourism

Online railway bookings becoming the preferred segment in online travel

Emergence of corporate travel packages

OTAs looking for offline counters leveraging on their brand value

Emerging travel information portals backed by OTAs

Religious travel is becoming a hot segment in online travel

Rising international travel

OTA’s serving as a preferred search tool for checking fares and ticket availability

Online travel industry will see consolidation in the coming years owing to stiff competition

OTA

GDS

Meta search engine

• Makemytrip • Yatra • Cleartrip

• Amadeus • Galelio • Abacus

• IXIGO • Ezeego1 • Zoomtra

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•Market Overview •Business Model •Drivers & Challenges •Trends •Competition •PE Investments •Key Developments

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Online travel is a fast emerging business segment attracting enormous investments private equity players

Overview

Market Size & Growth

• Online travel market in India valued at INR x1 bn in

INR bn

20-- 300

SAMPLE • Online travel contributes p % of all e-commerce activities globally
• Total travel market was INR c tr in 20-- and India accounted for only INR d bn
• Globally, it is expected to grow m-n % year-on-year while in India it is growing at j %

Online Market Share by Channel

20--

20--

250 200 150 x1 100
50 0 20--
Online Travel
%

Y% x3
x2

20--

20--

Penetration

T1% T2%
T3%

S2 S1%

Supplier Website Traditional Travel Agents (Via Suppliers) Online Travel Agents

S3%

25

20

15

u4

10

u3

u2

5

u1

0

20--

20--

20--

20--

Source:

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x4
20-u5
20-4

Drivers & Challenges – Summary

Drivers
Proliferation of Internet Rising income Indian Railways Online Portal Growth in Low-Cost Carriers Secure Payment Mechanisms Rise of Medical Tourism

Challenges
Low Margins & High Operating Costs Poor Internet and Credit Card Penetration
Limited inventories and awareness

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Trends - Summary

Online railway bookings is becoming the preferred segment in online travel Emergence of corporate travel packages

Key Trends `

OTAs looking for offline counters leveraging on their brand value Rising international travel Religious travel is becoming a hot segment in online travel

Emerging travel information portals backed by OTAs

OTAs serving as a preferred search tool for checking fares and ticket availability

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Online travel industry is over crowded with many new entrants in the market

Overview

OTA Market Share India (20--)

• Online travel market is the most crowded arena in the

Company 1

E-commerce segment with many new players

M4%

Company 2

SAMPLE • IXIGO, Ezeego1 and Zoomtra are the leading meta search engines in online travel • With the existing competition online travel space is
expected to see consolidation • Added to that airline companies like SpiceJet, IndiGo
and KingFisher in India are coming up with their own portal Rang7, which will affect OTA’s
GDS Market Share

M3% M2%

M1%

Company 3 Company 4

Average Unique Site Visitors Per Month

G4% G3%
G1% G2%

Company 5 Company 6 Company 7 Company 8

Number in mn

4

a1

3

a2

2

a3

a4

1

0 Company 1 Company 2 Company 3 Company 4

Source:

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OTA Players in the Market (1/4)

Company Snapshot: Company 1

Corporate Information

Business Highlights

Headquarters City A, Country B

• Started Company Franchisee Associate Program (AFAP) to expand its business in Feb 20--

Founded

20--

• Also launched fully automated and robust mechanism for its Preferred Sales Agents

Bookings

Flight, Hotels, Bus, Cars, Holidays

• It is the only Indian travel portal to have its

SAMPLE Key People

Mr. C

Company Snapshot: Company 2
Corporate Information
Headquarters City P

headquarters in the United States. It’s a 99% subsidiary of its US company - Navin Communication Inc. based in Silicon Valley, California
Business Highlights
• F % revenues generated through airline tickets

• Revenue for 20—to 20--: Gross sales of INR j mn per

Founded

20--

day

Bookings

Flight, Railways, Hotels

• Daily visits/hits on the site: Currently around i mn daily visits with unique visits being k

Key People

Mr. Y

• Daily bookings: Around v air bookings + s Hotel room nights daily

Source:

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Thank you for the attention
The Online Travel report is a part of Research on India’s Tourism Industry Series. For more detailed information or customized research requirements please contact:

Gagan Uppal
Phone: +91 96191 00122 E-Mail: [email protected]

Gaurav Kumar
Phone: +91 98303 09715 E-Mail: [email protected]

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