Hotel chains seek bigger share of online bookings

Share of online hotel bookings in the country is estimated to have more than doubled to 15% in 2015, from 6% in 2014

Top hotel chains are waking up to the competition from online travel portals as more travellers move to online booking.

Online travel agencies or OTAs like MakeMyTrip and Yatra usually charge a 10-12 per cent commission from hotels on every accommodation booked.

“We want more online bookings to come through our own channels, where the cost is lower. We are spending money to ramp up the associated technologies. Pricing is never a challenge. We guarantee the best price if one books directly with us,” said Chinmai Sharma, chief revenue officer at Taj Hotels.

The 113-year Taj Hotels (pictured), run by Indian Hotels, recently launched its own mobile booking website. The firm is also working on introducing an app.

The hotel chain with revenues of Rs 2,000 crore in 2014-15 receives approximately 25 per cent of its bookings online. The bulk of that is routed through OTAs.

Kapil Chopra, president at the Oberoi Group of Hotels, said the company would make direct bookings attractive through privilege points and complimentary wi-fi. “Our direct online booking is growing faster and we are now working to roll out an app as well,” he said.

The share of online hotel bookings in the country is estimated to have more than doubled to 15 per cent in 2015 from a mere six per cent in 2014. Experts see this growing to 40-50 per cent in three years.

Two leading domestic online travel portals, MakeMyTrip and Ibibo, have raised a sizeable $430 million ($250 million by Ibibo and $180 million by MakeMyTrip) in the last quarter. The lion’s share of the money will be spent on strengthening technology.

These companies also offer steep discounts, a regular feature in the online travel space. At the same time, investments are taking place in improving the mobile platform and apps to offer greater convenience.

“Since hotel rooms are a perishable commodity with a seasonality element, OTAs become important. However, the most efficient in terms of bottom line is our own channel,” said Raj Rana, chief executive officer (South Asia) at Carlson Rezidor, which operates hotels under brands like Radisson and Park Plaza.

“Since the market is fragmented, you need a platform for customers with various options,” said Dhruv Shringi, co-founder and chief executive officer at online travel portal Yatra.