Online travel agencies have been an essential part of the Indian aviation sector over the last decade and contributed significantly by becoming an aid to the flyer in more ways than one. However, just like the airlines, it’s a competitive space. Rajesh Magow, Co-Founder and CEO-India, MakeMyTrip.com shares his views with us below.
Q: With airlines having their own online booking facilities, how does a model like yours work?
A: Offering a service online goes beyond a booking interface. It means having a robust technology infrastructure that supports a large number of transactions, facilitates glitch-free payments, is agile and dynamic, but equally important, there needs to be an offline service support in place.
This is where an OTA scores over an airline booking facility besides of course the choice and convenience offered to the customer. Online portals also provide for offline assistance; one can always call customer support for any assistance during the booking process. With value-adds such as customer testimonials, reviews and images of hotels, value deals on combination products (air + hotel, air + airport drop, etc.) as well as facilitation for insurance, OTAs have certainly made booking travel much faster and convenient.
MakeMyTrip not only provides flight-search and booking facilities, but a comprehensive range of travel solutions including rail, bus and car-rentals besides hotel bookings and holiday packages. When we launched our services in India in 2005, MakeMyTrip was the only OTA to offer both full-service airlines (available through GDS to all travel agents) and low-cost airlines which we connected to through direct-feeds. This was the biggest advantage to a customer who could see all flight options on one page and select their preferred option. The travel agent on the other hand could only offer them flights available through GDS which were full-service carriers and hence more expensive. The range of options available to the customer on the airline website would decrease further compared to the OTA or the travel agent. So, the role of intermediaries like OTAs is critical in ensuring the health and growth of the online travel ecosystem. Not surprisingly, we continue to be among the most-visited travel websites in the country, far surpassing other OTAs and airline websites. According to Comscore, MakeMyTrip reached 9.29 million Monthly Unique Visitors (MUVs) in September 2013 (a YOY growth of 37%). The top five spots were taken by OTAs, followed by airline sites.
Q: Makemytrip.com was known to have started very low cost bookings for certain sectors and certain time brackets, disclosing the exact time and airline only on payment. Why has this stopped?
A: We launched this service under Opaque fares last year to incentivize customers during a period of high airfares. All our partners were invited to be a part of this promotion, and Airlines indicating willingness to participate were included in the bouquet. Opaque pricing is internationally accepted and used by airlines and hotels to sell unsold inventory at a discounted price through intermediaries. This is done to prevent sales of unsold inventory from cannibalizing full-price retail sales. The pricing and inventory is entirely controlled by the airlines and sold through the OTA distribution channel like us. We promoted discounted fares for distress-inventory of participating Airlines under the Opaque Fare model and other portals also followed suit. In response to being called upon to examine this practice, DGCA notified Airlines that customers should be able to view their flight details (carrier, fare flight-time) before making payment for their air-ticket and they should remove Opaque inventory being displayed on travel portals. Airlines stopped making these fares available to us and we did not publish Opaque fares any more. To continue passing the benefit to the customer, we launched a ‘Special Fares’ promotion that allowed customers to see all flight details before making the payment.
The Opaque and Special fares were in response to market dynamics – as India’s leading online travel agency, we strive to create innovative travel solutions for our customers and will continue to lead with such market-moving promotions.
Q: What, according to you, is the root cause of domestic airlines constantly being in loss and how does this affect your booking business?
A: There are a variety of reasons including a difficult operating environment as capacity remains constrained, leading to higher airfares. Recently the Civil Aviation Ministry has been considering proposals that include relieving airlines of the mandate to fly to non-viable routes, release funding from the Centre to subsidize airline operations, and reduce sales tax on ATF. If passed, these will certainly provide a fillip to the airline industry and catalyze sector growth. Last year, when the Indian domestic airline industry witnessed a decline of over 10% year-over-year in total domestic passenger traffic, we experienced a decline in air transactions for the first time since we began our Indian operations in 2005. While we cannot do anything about the pricing and inventory, we focus on value-adding to the customer by offering bundled products that maximize savings. Thus, despite the tough domestic air environment, we were able to sustain our market share of 11%.
Q: Quite a few online travel portals like yours started as booking agencies and now have gone on to offer a variety of services like international tours and hotel stays. How has the response been and how much of a value add are these add-on services?
A: While air tickets continue to form a bulk of our revenue-mix but through concerted efforts in the Hotels and Holidays category we are slowly shifting the needle towards non-air products. We have invested in enriching the customer’s online hotel holiday research and purchase experience and we are witnessing results of the same in terms of increased engagement and transactions. Our transactions for hotels and packages have improved by 65.6% YOY in FY13. Hotels and Holidays (reported as HP Hotels and packages) has been a strategic focus area for us this year. we strengthened our portfolio of Hotel offerings in the South-East Asia region through two key acquisitions last year – Hotel Travel Group and the ITC Group in Thailand. Developing and growing the Hotels Packages business is our top strategic focus. We achieved Revenue less service cost growth of 58.2% year-on-year in Q2 14. This has been a result of our all-around efforts in making improvements in every lever of the business. From a Hotel customer’s online experience standpoint, we have improved the speed of the shopping experience by reducing data entry where ever possible. On the mobile front, we are enhancing the hotel booking experience by adding ‘Instabook’, a fast and painless payments feature that was launched for our flights business several quarters ago. Additionally, we are also utilizing the GPS coordinates from mobile devices to provide smarter and more targeted hotel deals notifications. These smart improvements, along with our on-going efforts to educate customers about the benefits of mobile bookings, should further increase conversion rates on mobile. Lastly, we are expanding our target hotels audience beyond India with continued investments in HotelTravel.com, while offering our Indian customers the most choice in both domestic and international hotels in our market. On the Holiday packages front, in addition to the good demand for our usual seasonally relevant destinations like the Andaman Islands, Singapore and Thailand, we are seeing encouraging growth in destinations like Australia, New Zealand and Africa, as air connectivity from India improves to those locations
When we did our IPO (initial public offering) three years ago, about 85 per cent of our revenue came from air ticketing. Now, it is 68 per cent and by the next two years, we target achieving a revenue mix of 50-50. It’s a tougher business to begin with, but is better in the long run as the margins are high and number of suppliers are more. We have an inventory of 80,000 hotel rooms, a majority of them abroad. We have been reporting 60-65 per cent growth in the hotel business for the last three years.
Q: With the growth of apps, do you plan to cash in and go a step beyond?
A: With a share of the travel market extending to more than 50% of all online sales, we will continue to roll out new services built with a ‘mobile-first’ approach. Our aim is to cater to consumer needs across platforms and channels and we strongly believe that the future of eCommerce is on ‘mobile’. Therefore, over the last couple of years, we strengthened focus on the mobile channel as a growth driver. As a result of our early focus and investments, we became the first Indian OTA to launch an iPhone app, and showcase a comprehensive set of mobile solutions ranging from a WAP and touch mobile site as well as mobile apps for Android, Windows and Blackberry. Our iPhone and Android apps have received top billings and ratings, and we are close to hitting 2 million app downloads. To cater to feature-phone users without a data connection, we built an assortment of travel solutions available on SMS such as flight search, as well as India’s first SMS-based Bus-ticket booking service. This enables feature/entry-level phone users to harness the power of ‘mobile’ by booking bus-tickets through an SMS.
Today, 20% of site-traffic is contributed by mobile apps. Our travel-booking apps not only enable customers to search and book flights, hotels and bus on the move but also value-added services such as booking-cancellation, tracking the status of refunds, sending e-tickets and vouchers, checking flight status and looking for alternate arrangements in case of last minute delays. It also provides geo-targeted search results, allowing users to easily find dining options that are near their current location, and provide attractive last minute deals for same day hotel bookings. The information is delivered through an intuitive and interactive interface.
Read more on Aviation
"Offering a service online goes beyond a booking interface"
Không có nhận xét nào:
Đăng nhận xét