The NextBigWhat For OTAs? Ecommerce Acquisition (Or Die Irrelevant)


The NextBigWhat For OTAs? Ecommerce Acquisition (Or Die Irrelevant)

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.

Makemytrip Share Price
Makemytrip Share Price

The Case Of Irrelevancy?

Most of the OTAs are on the verge of turning irrelevant.

Here is how:

  1. 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.
  2. 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.

Comment (1)

  1. Amit

    to an extent its not true as they also understand the market very well being in business for long hence, are matured enough to market/make the product and sell it. having said that, every OTA is making money on tickets – I can say this confidentially since I’m also a travel agent and knows ins and outs of travel vertical. With regards to online, yes I do agree that has gone crazy for these OTA’s but when it comes to offline, they do make profits. the suggestion to them would be focus on customer service and they win the game again!

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