Indian OTAs under serious threat – Is consolidation in the air?
Indian OTAs are under a serious threat as commission per ticket, after falling from 10% to 5% is now heading towards 0% (starting October)!
More on Indian OTA Industry:
- 2,860 International Air Transport Association (IATA) affiliated agents in India and roughly around 40,000 sub IATA agents purchase tickets from IATA affiliated agents
- 90% of booking is done via the agents.
- Around 35,000 agents and sub-agents will be forced to shut shop, because of commission erosion.
Declining Travel Industry
- Domestic air travel has registered a steep fall of about 40% during the last one year
- Passenger demand growth fell to 3.8%,
- Passenger load factors too dropped to 77.6% [ET]
Essentially, OTAs like ClearTrip, Yatra etc are focusing on positioning themselves as a travel portal – a planner of sorts which works across train/bus journey/hotel booking as well.
Similarly, travel search players too are moving beyond the airfare search and are offering a comprehensive offering across flight + train + bus and hotels.
The model, to me will evolve (there is an interesting startup working on hedging concept), and the bigger chunk will lie in travel packages – but I believe consolidation is in the air (now that US based portals, like kayak/Travelocity too have entered the market and haven’t seen any big successes– so will lookout for inorganic growth).
What’s your opinion?
» Coverage of Indian Online Travel Industry
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