eyefortravel - Travel Distribution India '06

‘Customers in India are very price sensitive’

Ashwin Damera CEO, Travelguru

Ashwin Damera, CEO, Travelguru, tells Reema Sisodia that the Indian market is evolving and the future of online travel is bright, but only for some

What is the future of travel distribution in India?

The future of travel distribution can be viewed from three perspectives: the customer's viewpoint, the agent's viewpoint and the supplier's viewpoint. From the customer's viewpoint the answer is simple. There will definitely be a transition from the offline to the online especially for domestic airline bookings. But within that, the shift will also be from the airline portals to the intermediaries. For example in the USA, till the year 1995 everything was offline. It was only after that the Internet boom for airline bookings took place and within ten years time frame the shift happened, with 50 per cent bookings offline and 50 per cent online. Within that 30 per cent is the share of intermediaries and 20 per cent of the airlines.

From the agent's viewpoint, today if you look at their revenue, 80 per cent comes from flight bookings. Hence, with time agents will have to analyse their business model keeping in view the current scenario. Probably they need to go in for what I call `Destructive Construction.' Specialisation is the way forward for them and they also need to invest in providing more value add-on services to retain their clients. While the suppliers on their part will always look at reducing the cost of distribution.

What according to you is the future of online travel in India?

Bright for sure, but I would like to say bright for some. For example in China today the top three travel portals control 80 per cent of the online market. Today those with strong financial backing will be the ones who will survive in the race. This market will only grow further, but will follow the simple policy of `survival of the fittest.'

How does India differ from other markets?

In India we are in a different phase of the evolution cycle. Customers in India are very price sensitive; hence they would always go for the best deal. Credit card penetration is slow but it will take place. On the other hand in India we still need to work on changing mindsets. Today an Indian client will go online and search but at the same time also like to hear a human voice on the other end, hence they may do the transaction online but will also call to check if things are fine. But in general the transition is happening and the future for online travel is most definitely bright.