Cleartrip, an online travel portal has done a tie-up with Go Air to offer tickets as low as Rs.599 during lean season. This has made other LCC’s to do tie-ups with online travel agents (OTA’s) to offer their tickets at a price similar to Go Air offer.
Spice Jet, Simplify Deccan & Indigo all are looking forward to do tie-ups with other OTA’s like MakeMyTrip & Yatra.
Indigo is offering fares for a limited period for a discount of Rs.200 on all their tickets. Simplify Deccan has approached Yatra for a tie-up to offer return airfares at throw away prices and Spice Jet has approached MakeMyTrip for same.
With this competition, no doubt customers are going to get all benefit but travel industry will not gain anything. Profit margins are thin on the air travel and with low fares, they will not anything good in the kitty of airlines and OTA’s. They will only be able to attract those customers who are only looking for cheaper deals on the net and are not loyal to any particular airline or OTA website, so there is a customer acquisition but there is no customer retention.
I hope OTA’s & LCC make profits
Online Travel in India bleeding in competition
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Rajat, What you have said is very true and it goes beyond that.
Even though the online travel market in India is just a few years old, at the same time it leaves much to be desired. Most of the travel portals have no differentiation with respect to each other – all of them sell the same products in very similar ways (acquiring customers by offering free tickets/hotel stays).
There is no significant differentiation either in terms of product/content or business model. Even usability of these portals leaves much to be desired (except Cleartrip, to some extent).
Online travel portals are online for namesake... much of the business happens by calling a call centre number. With the opening up of retail stores by big OTA's we are seeing the reemergence of the old travel agent in a swanky new avatar...
Do these thing help the industry in any way and do they help retain customers - the answer i am afraid is NO. Although, discounting has helped open up the market but at the same time lack of usibality and compelling features has enabled dependency on 1800 numbers...
Consumers will want better very soon... and OTA's better deliver. Otherwise, we are on our way to consolidation and a flat growth in years to come
Cheers!
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