SERVICES: Travel portals go offline to increase their reach.
In the last five years or so that they’ve been around, travel portals have added considerable zing to the category, eating into the business of brick-and-mortar travel agencies. Travel has grown to become the largest segment (65-70 per cent, by industry estimates) of e-commerce in India today.
However, online travel accounts for only about 10 per cent of the total domestic travel market, estimated at about $20 billion, as per figures put out by PhoCusWright. Clearly, online travel companies have a long way to go. And so the wheel has come full circle, with online travel companies now venturing off-line as well.
Ezeego1.com launched its first travel shop in Mumbai recently, while others like Yatra and Makemytrip (MMT) made the move a few months ago.
“The objective is to increase distribution,” says Neelu Singh, COO, Ezeego1. Thus, Ezeego1 shops will offer payment options other than through credit card and also assist customers with foreign exchange and visa processing.
MMT opened its first walk-in retail shop in Ahmedabad about five months back and the response, says CMO Sachin Bhatia, was very impressive. “Calls at our call centre in Delhi from the Gujarat market as a whole have gone up since then. Gujarat is a local language market and people like to interact in Gujarati, which is where the shops help,” he explains.
MMT has offline retail presence in Bangalore and Ahmedabad at the moment, while Delhi, Mumbai and Kolkata will be rolled out soon. MMT has also set up manned kiosks at 35 BPCL In&Out stores, a few Spencers Hypermarkets and is in the process of setting up these kiosks at the arrivals halls in five domestic airports — Delhi, Baroda, Goa, Nagpur and Indore.
Yatra has a somewhat innovative offline model. It is present in many Reliance Web Worlds and Hughes Net Fusion outlets across the country and also has plans to tie-up with ITZ Cash Card franchise stores. According to Yatra co-founder Dhruv Shringi, “About 15 per cent of our direct marketing budget (Rs 25-30 crore) is being spent on creating an offline presence.”
Why the rush off-line? Clearly, with the growth they’ve got this far, online companies are looking to expand their reach among the large numbers who don’t have a credit card and so can’t transact online, or feel uncomfortable giving out their credit card details on the web.
As Sandeep Murthy, CEO, Cleartrip, which is also working on setting up offline shops which will be up and running by this year, says, “We want to make travel simpler and are now thinking of leveraging our technology to service a wider audience, beyond the 10 per cent.”
The flip-side of going off-line, says Murthy, is that it brings with it overheads and new risks, besides the need to tackle a whole new set of issues —where to set up shop, how much space, and so on.
For most online travel companies, tickets make up the largest chunk of sales, though Bhatia says the non-air buisness (holiday packages and hotels) is growing fast. MMT today has an 80:20 ratio of air to non-air bookings.
Ezeego1, which has an air to non-air ratio of 70:30, is bullish about selling packages online. Singh confirms that a lot of exotic international destinations have been selling very well.
This is where the Ezeego1 offline shops will come in with visa and foreign exchange services for clients who go in for these larger transactions involving international destinations. Ezeego1 plans to have 300 of these stores in the next three years. The company will go the franchisee way, but the staff will be trained by Ezeego1. |
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