Once upon a time OTAs like Makemytrip, Cleartrip were considered very hot – they were the only online transacting site in India’s digital world.
And now ? Well, take a look at Makemytrip’s share price over the last one year.
The Case Of Irrelevancy?
Most of the OTAs are on the verge of turning irrelevant.
Here is how:
- Airlines are driving transactions on their site / app. The flight booking market is anyways dead for OTAs.
Most of the flight companies are catching up when it comes to app download numbers and with clever marketing tactics like “get free food if you book from app”, expect the gap to close in the next 6 months.
- Hotel booking : There are niche offerings that are working out quite well for travelers. Plus, OTAs have very little clue about hotel business – most of them are still an ‘outsider’ to the industry (i.e very little stake / respect from the industry).
OTAs have failed to create an experience and while some of them are still trying, they do know internally that it’s a lost battle.
Like ecommerce, ticket booking is just another utility category (no matter how great your UI/UX is) and while ecommerce companies smartly came up with glorified metrics like GMV (which has also helped them raise a lot of money and launch new categories), flight/hotel ticketing companies are seen as ‘margin’ players.
Future for OTAs?
Die being irrelevant or get lapped by an ecommerce company, which wants to add more GMVs (and users) to its kitty.
Investors: your call.