Rebuffed by airlines, portals turn to buses

The downturn in the aviation sector has affected the margins of online travel portals. From October, agents will earn no commission on air ticket bookings. To maintain profitability, travel portals are now offering online bus bookings.

iXiGO, one of India’s fastest growing online travel search engines, today announced the launch of its bus search tool. The tool enables search, comparison and booking of bus tickets from multiple bus operators and bus booking sites in India. Using the tool, deals from multiple sites can be compared on a single platform.

iXiGO has partnered Ticketvala, redBus and TicketGoose online bus booking sites to offer this facility.

Aloke Bajpai, founder and CEO, iXiGO, says: “There is huge potential in online bus booking. We will work with our partners to search for a wider base of bus operators and offer Indian consumers a more comprehensive and usable bus ticket search engine.”

Online bus booking started in India around 18 months ago. It is estimated to be a 15,000-crore market and is growing at 20 per cent a month. Currently, bus booking is less than 0.01 per cent of the total online travel booking segment.

Haranath Lokanadham, CEO, Ticketvala, says that Ticketvala has done 2 million transactions since July 2007.

Yatra and Zoomtra also have online bus booking on the cards. Online Bus booking will compensate for the loss of earnings from air bookings. On an average, portals charge 10-20 per cent commission on ticket value from bus operators. On an airline booking, it is below 5 per cent.

Vikas Jawa, director, Zoomtra, says: “All travel portals always had their eyes on the bus market, but it has been rather unorganised. A few players are doing the hard work by consolidating the industry. This makes it easier for online players. The volumes in this business are high. It is essential for online travel players to have a broad range of product offerings to maintain profitability and buses have been one obvious extension in this range.”

Travel portals penetrate 12-14 per cent of the total travel market in India, which is expected to increase to 20-30 per cent by 2010.

The market potential of online bus booking is promising as the business-to-consumer market is still being created, unlike the online air ticketing industry. There is a huge mass of bus travellers who do not have access to the internet. To truly tap into the market, a solid business-to-business strategy is essential.