travel portals have found their place in the sun, they are looking for other avenues of growth, such as online hotel bookings. And the hotel industry survey conducted by the Federation of Hotels and Restaurants Association of India (FHRAI) couldn't have come at a better time. As reported recently, the results show that 77.3 per cent of branded hotels offered online reservations in 2006, up from 33.2 per cent the previous year.
The growth has been attributed to a growing class of jet-setting young travellers for whom convenience is of utmost importance. After speaking to key players in the segment, the shift makes sound strategic sense for them, too. But the going will not be easy.
Sachin Bhatia, chief marketing officer of MakeMyTrip.com, says, "We are known for our airline bookings. Now we want to showcase our hotel booking services, especially in the summer vacations season." Incidentally, MakeMyTrip will re-launch its portal soon, with better features for online hotel reservations. The portal currently offers 1,500 hotel options. Bhatia expects hotel bookings to go up by 150 per cent following the re-launch.
According to Dhruv Shringi, co-founder and executive director of Yatra.com, "Hotel bookings are an important segment for us and we expect a rise in hotel bookings over the next six months." He adds that the online deals work out better for smaller hotels because they can reach a wider customer base through the portals.
Another travel portal, Cleartrip.com, prefers to wait and watch. No major strategic moves are being made by the company, which has about 1,500 hotels on its site. The reason: limited hotel inventory.
Says Stuart Chrighton, COO of Cleartrip.com, "The air travel segment is currently not offering competitive margins. So, it is only natural to move into non-air products such as hotel bookings. However, the limited hotel inventory is a challenge, as availability runs short of demand." Chrighton expects the share of hotel bookings to reach 10 per cent in the next 18-24 months with an expected increase in capacity and number of hotels.
However, not everyone is so optimistic. While hotels are just stepping up their online efforts, it may be a while before these efforts actually translate into revenue.
According to Ashok Lalla, director of Internet marketing with the Taj Group, "There is no doubt that online hotel reservations are growing, but that only constitutes about 5 per cent of the transactions on travel portals. However, there is a growing influence of the Internet on travellers when deciding on hotels."
Apparently, travellers are doing their research online, but prefer to call up the hotel before making a booking. The challenge for travel portals now is to change that mindset and ensure that their users are comfortable booking hotel accommodation online. Their sustainability depends on it.
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