Turbulence for offline travel biz

Online companies eye big gains

The tourism industry, growing at a strong double digit, may face a temporary setback as Rupee notes of Rs 500 and Rs 1,000 go out of circulation. Apart from impacting the business of offline travel agents, the move may create a temporary inconvenience for foreign visitors carrying notes of these denominations. The decision will benefit the online travel economy and impact business of the traditional travel agents who accept cash payments.

Sharat Dhall, president at online travel company Yatra is upbeat. "It is a great step to clean up the cash economy and move towards cashless system. There was always a customer who was not keen to buy from us due to his preference to make cash payments. The decision is a great opportunity for online travel agencies as we offer transparency and convenience", he said.

The move will benefit companies like Yatra, MakeMyTrip and ibibo. Currently, only 15 per cent of hotel bookings happen online and this number can rapidly move up. In airlines, almost half of the bookings take place online and this is also expected to get a push.

Since many users only wanted to make cash payments, a number of online booking channels were forced to introduce flexible payment options where the user could pay at the hotel and in cash.

FindMyStay, a start up that allows travellers to bid a tariff that is lower to standard hotel rates, had recently introduced an option to pay at the hotel. "A number of customers are not comfortable using cards to make an online payment. They prefer to pay cash. That is why many traditional travel agents still see a business," Rohit Khetrapal, co-founder said recently.