Net Bookings

An year ago, when Ashwani Kohli, owner of the New Delhi-based travel and ticketing agency, Vardaan Air Travels, placed a free listing on the Internet, he was not sure how it would help. "Within a month, I started getting enquiries from all over the world," he recalls. People from Europe and the US were writing in with business queries.

It was not until the fourth month, however, that Kohli converted one of these enquiries into a business deal. But since then, there has been no looking back.

The flood of queries has now forced Kohli to put up his own web site, listing all the services his firm offers. "On an average, I get about 70 to 80 enquiries every month and at least two per cent of these result in a business deal," he says.

In the cut-throat world of the travel trade, this is a big bonus indeed. "This is a tough business. Margins are real tight and sometimes bagging a customer means beating a rival by two or three hundred rupees," says Kohli. For instance, when Standard Chartered was hunting for the best deal for its employee incentive scheme, Kohlis price of Rs 12,150 per ticket to Dubai -- packaged with a city tour, a belly dance performance and a desert safari apart from the shopping spree -- bagged him the deal. His nearest rival had quoted Rs 12,500.

So it is not surprising that Arun Varma, proprietor of Prime Travels, another travel agency in Delhi, does not complain when only one out of the 10 enquiries he receives on the Internet every day results in a business deal. "We have been on the Net for about a month now and the one per cent increase in business is welcome," he says.

Lalit Sheth, chairman and managing director of the Mumbai-based Raj Travels and Tours, feels the Net may not yet be a source of extraordinary business but "it is serving as a means of effective communication". For instance, if a hotel in Alaska wants to do business with him, says Sheth, he can just tell them to check out his website and get back for further information. "Moreover, it does PR work without any additional expenditure other than the one-time launch cost," he says. Raj Travels put up its website in November 1996 at a cost of Rs 1.6 lakh. The agency gets around 20 enquiries a day but only around 10 of them in a month materialise into business.

Most of the travel agency business on discounts that airlines give their authorised agents. These are passed on to sub-agents and a part of it finally reaches the customer. But as airlines the world over increasingly take to the Internet, customers are able to make bookings directly on the airlines web site. This means that the full discount is now passed to the customer, who prefers to bypass the travel agent completely. This squeeze is beginning to be felt even by cargo agents and freight forwarders. "Most of our customers still come through agents," says Meera Juneja, regional director, sales and operations at KLM Cargo, which has carried almost 26,000 tonne of freight this year.

Over and above the commission that these agents are assured, airlines offer additional deals on volume," she says. But with online trading, it may be possible to pass a large chunk of this discount directly to the customer. Ranbaxy and KLM are currently experimenting with an Electronic Data Interchange (EDI) system and this may be extended to other customers very soon.

It may take some time, however, before online trading and Internet-based commerce become a real threat to travel agents. In the ticketing business, for example, most of the business that trickles in over the Internet is from overseas. Internet users within the country are still a miniscule minority though Sheth is hopeful that as more and more people subscribe to the Internet, business from it will grow".

Also, a lot of web-based business is dependent on the use of credit cards. For instance, Minnie Singh, managing partner at Connections World Travel, which specialises in event management but also does a lot of ticketing business, has been getting a lot of enquiries on the Net ever since Santanu Lahiri, a US-based Indian, used her firm and later listed it on his home page. But we try to restrict our dealings with people who can pay up in India," she says. Adds Kohli, The credit card culture is far from taking off here. So there is no threat here yet." But what will happen once people get to buy directly from the airlines? Says Singh, By that time, Ill think of something else to do."

(With inputs from Papiya Pal.)

More and more travel agencies are doing business on the Internet.