Backgrounder | Hemant Jain: What makes online travel so sought after?

24 Aug,2012

By Hemant Jain

 

Back in the good’ol days, setting out on a vacation with family was not less than a whirlwind! Not only the options were scant but also the hassles of lack of hotels and commutation modes made it less alluring. But the phenomenon of tourism since 1950 has been remarkable in terms of growth, spread and diversification. The international tourist arrivals since then have grown from mere 25 million to reach 940 million in 2010. The fast growth and spread has not only resulted the globalization of people’s movements as never before but has also contributed in creating a vibrant industry and opportunities for millions of people. Little wonder that almost 20 million people are employed in India’s tourism industry.

 

So what are the factors that have triggered the era of consumerism in the travel industry?

Advent of Low Cost airline- Earlier air travel was considered to burn a hole in a traveller’s pocket. But with the emergence of low cost airline in India in 2003, air travel, which was just a dream for a traveller with minimum resources, turned in to a possibility. This also opened up gates for many private players who offered better services to the consumers at competitive prices. This was one of the major revolution from a consumer’s point of view because it all together explored a new avenue of travel besides roads and railways.

 

Increase in travel agencies: The Indian market was introduced to the concept of planning and booking travels in early 2000. The travel industry had not achieved momentum yet but there were surely some signs of hope. IRCTC (Indian Railway Catering and Tourism Corporation) had proven to be a success and had demonstrated that Indians were warming up to booking online and ready to pay a premium for convenience. There were a couple of websites that offered air tickets but none could comprehensively claim to cater to travel needs across categories. But Innovation and differentiation are key drivers of growth today. While OTAs have gone beyond online travel to provide end-to-end travel and holiday planning solutions, innovation is the need of the hour. Cross selling of products is on the rise. Again OTAs have to engage with customers and listen to what they have to say. There is a need to make inroads into the customers’ life, without being intrusive and understand their needs better.

 

Promotion by Government: The government’s ‘Incredible India campaign’ for boosting India’s image as a global destination has promoted tourism in a big way. It has promoted the destinations in India and abroad in countries like UK, Canada, Singapore, Malaysia, Russia, Australia and New Zealand. This concerted effort has not only attracted a consumer’s attention at destination in India like Leh, Kerala and Sikkim et al but also towards international destinations. Today, the top International destinations are UK, Pataya, Singapore. Moreover the involvement of state government in projecting their state as a favourable tourist destination has also escalated the inbound tourism. States like Gujarat, Rajasthan, Kashmir and Chhattisgarh et al spends millions on their marketing and advertising efforts in a year.

 

Boom in Online Travel Industry: Initially online travel was marked by several challenges. Low Internet penetration was the major one. Another challenge was habit. The habit of buying an air ticket was through a travel agent and booking a hotel room was always through calling the hotel directly or by showing up. So it was a habit change that OTAs were dealing with and changing a habit obviously takes a long time. Also, there was limited confidence on online transactions. But eventually, online travel industry grew impressively. The travel boom, emergence of low cost carriers, proliferation of Internet and the growing acceptance of e-commerce, are key factors that have contributed to the emergence of this sector. The online travel industry is certainly marked for growth in coming years. The best is yet to come for the sector with broadband penetration just starting to take off. India is all set to become among the top three online travel markets in the world over the next decade.

 

Increase in the No. of Woman Traveller: A study by Nielsen in 2011 tags women as the key decision makers for around 85% of all consumer purchases including everything from autos to health care and this includes the selection of preferred holiday destination also.  The study also highlighted that around 91% of the female booked trips with their friends and only meagre 8% travelled with their families. Also, shopping as an activity is widely preferred by woman enabling them to travel at far-flung areas.

 

Change in Travel accessories: It is believed that the travel accessories (be it suitcase, briefcase, bags or pouches et al) a person carries during his travel says a lot about his personality. Gone are the days of bulky, ugly suitcases that threw a major challenge to passengers in terms of its handling. Today on consumers demand there is a host of lightweight travel accessories in different sizes, shapes and colours available to choose from. While female travellers can pick from the range of unusual colour palette in luggage including pink, purple and yellow, the males on the other hand can look out for cleaner and organised travel gear. There’s also a lot of innovation happening on other travel accessories in general beyond luggage. Like a travel Toothbrush that is a toothbrush and toothpaste rolled into one making a minute but simple travel accessory.

 

Spurt of technological gadgets: Ever wondered what was it like to travel before the age of technology precisely gadgets like cell phones, laptops, e-Books, Music Players? Quite unimaginable, huh! Earlier books were the only tool that was used to pass away the time during long and tedious journey hours. And on top of it, a letter was the only medium to communicate to your near and dear ones about your safety arrival on a foreign land. But today, thanks to technological advancement there is a pool of gadgets that one carries during his travel. Gadgets like cell phones, laptops are not only a great mode of communication but are also used professionally. Besides gadgets like music players, e-books, cameras and all are a great source of entertainment for a person on a trip.

 

The Social Media Influence: The social media plays a big role in travel. Earlier consumers use to book through travel agents. Now people use travel sites Cleartrip.com, makemytrip.com among many others. Sites like Facebook, Twitter are big influencers for travel. People post comments on travel sites, research on Google about place they visiting. Travelling in groups has been promoted in big way by websites like Thomas Cook. Even when people visit the destination, Google maps play a big role. Even the Internet on mobiles play a big role and people don’t get stuck in midway. Seeing other friends posting pictures on Facebook influences travellers. Travel blogs play a big role in making the decision where to go for a holiday.

 

New avenues of travel options: This is an emerging sector with consumers moving towards more advanced forms of travel options including a helicopter, yatch or a cruise. Although the primary reason for its access remains cost but with the increasing purchasing power of the consumer’s the newer forms of travelling are gaining momentum in a big way.

 

Undoubtedly there has been a magnum of changes in the travel industry over the past few years, but there is more to look forward.  According to a travel research firm, Indian travel industry is expected to grow by13% to $23 billion by next year. And by the year 2014, Indian tourism industry will contribute atleast US$16.3 billion.  The $4 billion online business is also expected to grow faster, at 28% to touch $7 billion. Now there are number of factors that can augment this phenomenal growth in coming times. Mobile penetration has increased considerable in the past few years and people are accessing the internet through their phones. Exploiting the mobile platform hence becomes very essential and going forward we can expect an influx of applications for mobiles. Application like Zomato.com, Yatra.com have already paved a way for the increased use of mobile platform for consumers to plan their leisure activities. Be it a dine out with family or planning a vacation abroad, the online travel industry is certainly marked for growth in coming years, especially through mobile platform. The best is yet to come for the sector with broadband penetration just starting to take off.

 

India is all set to become among the top three online travel markets in the world over the next decade. By 2015, it’s estimated that shoppers from around the world will spend about $119 billion on goods and services bought via mobile phones, according to a study by ABI Research. Also identification of new growth sector like medical tourism is pivotal as the number of medical tourist arrival within few years is expected to cross two millions mark. So pack your bags and set out for your dream destination as the travel industry is witnessing a change that has never happened before and in a good way!

 

Hemant Jain is Senior Vice President & Head – Domestic Business @ Hungama Mobile

 

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