Expedia casts its web wide on Indian travel segment

Expedia, the largest international online travel portal in terms of revenue, has adopted a three-pronged strategy to get counted among the top five companies in India.

Since it launched its India operations two years back, Expedia has focused on building back-end and inbound travellers, but is now shifting gears. In order to get a bigger share of the pie, the company has plans to position itself in the outbound and domestic travel market. It will spend Rs 25 crore this year to step up its marketing initiatives.

In the online travel segment, Expedia is going to take on market leaders MakeMyTrip, Cleartrip, Yatra, Travel Guru, Travelocity, Travelchacha and Arzoo.com. Experts say, Expedia is poised to climb up to the fourth position in the list within a year.

Expedia has tied up with Clear Trip for its back-end services. “We want to have access to the best inventory which Clear Trip provides us in the domestic flights segment. We are going to continue with them,” said Daniel Lynn, managing director and vice president, Expedia (Asia Pacific). The company is also in talks with domestic carriers for getting a share of their inventory.

The company, which is known to have the largest inventory in the world (over 1,30,000 hotels and 430 airlines), is chalking out an extensive expansion strategy for its network in India. Expedia has tapped the smaller agents segment through the Travel Agents Federation of India (TAFI), providing them access to its inventory and thereby expanding its own reach in the domestic market. It has partnered with MSN and hindustantimes.com to form Expedia.co.in.

Expedia does not charge its customer for booking, but gets its commission from airlines and hotels. This move, experts says, gives Expedia the edge to take on the established players in the Indian market.

Besides customising its strategy for the Indian market, the company is looking at various tie-ups to expand its distribution channels from browsing to booking. Besides offering the usual internet platform, Expedia has partnered with Nokia to create an avenue for mobile browsing.

“Given the low internet penetration here, mobile is a very important medium for us. Nowhere else in the world have we partnered Nokia,” said Lynn. The travel company is also entering into a partnership with transport provider Red Bus to further enhance its network in India.

“There is a large enough market for everyone out there although margins are low in ticketing. Hence, a travel portal like Expedia can bank upon other products like hotels and packages to boost its business here,” said P Srinivas leader, travel, hospitality & tourism, Deloitte India.

Expedia is however concerned about fairplay as online giant Google is acquiring the ITA software (travel industry software). “Google has always been part of the eco system. Our concern is that it should let the travel market remain unbiased and not drive the customer to a particular market in an unfair way,” Lynn said.