Are you hooked on online travel? asks IAMAI

Caught between coping with relentless growth and the search for higher margins, the online travel industry is driving down the Internet highway at breakneck speed.

But with growth come issues: If online hotel reservations are the next big thing, will hotel chains play ball? Which other modes of travel should the top sites bet on now? How does one quickly build an efficient and secure customer back end service? What can be done, in this age of Web 2.0, to increase engagement with the customer?

To help throw light on the strategic issues the industry faces, the Internet and Mobile Association of India (IAMAI), in association with agencyfaqs!, is organising a day-long seminar, ‘Online Travel: Are You Hooked?’, later this week in Delhi.

Are you hooked? Of course, we are. Online travel in India is expected to double by 2008, reaching a value of $2 billion. Some 65 per cent of the online travel market will then be controlled by websites that facilitate travel and accommodation bookings, such as MakeMyTrip.com, Yatra.com and Travelguru.com

Hospitality is definitely one of the key areas that will figure in the discussion. The online travel industry is already reaching the next level after low cost carriers (LCCs) democratised air travel. The focus now is on accommodation. Though online hotel bookings constituted only 3 per cent of capacity in 2006, hotel capacity is expected to double by 2012.

Devyani Nagpal, chief marketing officer at Travelguru, says, “It’s not just hotels, it’s accommodation we are looking at. We are adding boutique hotels, budget hotels and other functional hotels – what we call ‘hidden jewels’ on our portal.” Travelguru has about 3,500 Indian hotels on board and 72,000 international ones through its global network.

However, online hotel bookings are not done in real time on most portals. That is, users do not get to know of room availability immediately. “Just like LCCs were the growth catalysts for online travel a few years ago, budget hotels and online travel agents will catalyse growth in the future,” says Himanshu Singh, managing director at Travelocity, who is also speaking at the seminar.

Other modes of travel are on the horizon, too, but not for the next two years. Indian Railways, for one, has launched a tourism website for its tour packages. Road travel is still unorganised in India, but car rentals are another value added service the sites are looking at. According to Applied Travel Intelligence, online car rentals and bus reservations will be an $80 million business by 2008.

Retaining and engaging a customer is another important aspect of the discussion, considering the growing competition in the space. As a way of differentiating themselves, travel portals are adding a number of social elements. Especially for hotel bookings, reviews come handy. Make My Trip recently revamped its travel community website, Oktatabyebye. Travelocity has an international community site called IgoUgo, which it will soon introduce in India. Yatra.com has Raahi.

Deep Kalra of MakeMyTrip says, “Travel 2.0 is the buzzword here. Content, both developed by users and by portals, will help customers make better travel plans.”

Another issue that the seminar aims to address is educating users on the safety of online transactions. Singh of Travelocity says, “We have a robust risk and fraud management system in place. In fact, online transactions are safer than offline ones. All we need is to build awareness among customers.”

To be held on May 18 in New Delhi, the IAMAI and agencyfaqs! seminar will see speakers from major travel portals like Aswin Damera of Travelguru and Deep Kalra of MakeMyTrip. The hotel chains will be represented by Rahul Pandit of Lemon Tree and Suresh Kumar of Fortune Park Hotels. Online advertising and search will get a platform, too, with Mahesh Murthy of Pinstorm and V Ramani of Connecturf slated to speak.

© 2007 agencyfaqs!