30 Minute Interview

'The hybrid phenomenon is quite unique to India'

Going into its third year in India, the annual event Travel Distribution Summit India 2008 to be held from November 26-28 is back in Mumbai. Simon Carkeek, executive director for Eyefortravel, speaks about the sessions and the insights they will present. By Hazel Jain

You have packed two days with a lot of sessions this year. Is that a sign of the Indian market maturing?

Yes I think it would be fair to say that. There are certainly a growing number of issues and challenges facing travel companies as they grow their businesses. As well as needing to know how to market and distribute their products online, travel providers also need to understand how their pricing and revenue management should evolve.

Can you give us a gist of the report EyeforTravel has compiled of the Indian OTA market in the last year?

Whilst the report does include information on the Indian OTAs, it is actually a lot broader in scope than that. The report is a detailed account of the current state of travel distribution and marketing in India. It puts the online travel market in the context of the overall travel market in India, as well as looking at the changing distribution patterns in different sectors of the industry, including hotels, airlines and tour operators. The report also includes results of our Indian consumer surveys with detailed analysis about who is buying travel in India, how they are buying it and how this is likely to change over the next 12 months.

More and more OTAs in India are evolving to a hybrid model. Is this the case globally?

Actually no. This phenomenon is quite unique to India. Whilst OTAs in other markets have dabbled in the offline space, they for the most part have remained resolutely online in their focus. Only a year ago some of the leading OTAs in India were talking a 'pure-play' online game. This has changed in recent months and it will be interesting to see how these hybrid models play out in the market. Having an offline presence is a lot more costly so these players will need to be ramping up their revenues and their margins to cover these additional costs.

Are OTAs in India now shifting focus from being pure airline ticketing agents to selling hotels and tour packages?

Yes absolutely. Tour packages are a much more complex products than airline tickets. As for hotel sales, I think there is a huge amount to play for in this space. Online hotel sales in India still represent a small percentage of the market and most properties are not represented on the major OTAs, or even online. The challenge (and opportunity) over the next 12 months will be to consolidate hotel distribution online and enable the booking of a much wider choice of properties. Whoever can do this the best and the fastest will, in my view, be in a strong position.

Can you sum up the future of OTAs in India in one sentence?

The successful Indian OTA will grow its online revenues more quickly than its offline revenues, maintain a low cost base, sell high margin products (offline at first but increasingly online) and maintain good relationships with the suppliers on which its business depends.