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Travel sites shift focus to forex & holidays
With the USP of best air fare losing ground in the online space, travel portals are increasing the range of non-air products like value holiday packages, discounted hotel deals, weekend breaks, foreign exchange and visa processing. Travel websites are aggressively promoting complete travel solutions rather than discounted air fare.
“Air tickets are being commoditized in the online space. We are becoming mere distributor where the brand of airline is a consideration and not the website. So it is more rewarding to offer better hotel rates and holiday packages,” says Deep Kalra, CEO of makemytrip.com. The website provides booking across 3,500 Indian hotels and 10-15,000 international hotels. It also offers foreign exchange and visa processing services.
Also unlike the low margins on air ticket, which is about 5% per ticket, the travel portals get 10-20% margin on the non-air products. “The online hotel booking space is still not as crowded as the air ticket. Out of the 100 flight bookings, hotel bookings account for 20% on our website. The revenue from online hotel booking is expected to rise significantly in the near future,” says Ashwin Damera, Founder CEO of Travelguru.
With the increasing gamut of non-air products, the online travel market, which is estimated to be about Rs 1,800 crore is slowly moving from the best price to best value model. Prashant Muttoo, GM of India times Travel says, “Creating the lowest price platform and providing freebies with air tickets is not a sustainable model in the long run. This will only subsidize the low margins on air tickets. So we would rather focus on adding more travel related products to create a wholesome travel
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