The Indian OTA Nose Dive – Where Is The Value Beyond The Ticket?

We had recently taken a look at the state of affairs in the Online Travel scene and concluded that a slowdown was eminent. Recently there was a lot of heart burn and more on the fact that major airlines like Jet, Kingfisher and Air India had pulled the plug on agent commissions of 5% and the same was reacted to by the OTA’s by way of pulling down the respective airlines listings. So major portals like Yatra, Cleartrip and a few others were not showing flights by Jet and others.

During all this chaos iXiGo which is a travel search engine which directly links to the airlines site was happily claiming that people could still use ixigo to search and then directly book their tickets from Jet sites.

Now finally the word is out that Jet has taken a decision to part with a measly 3% as agents commission ( which is larger than earlier 5% – Read this post to know how) for Jet Airways and not Jet Lite. Kingfisher is still to take a decision on this as of now.

Now the question that comes to my mind is.. Where is the value beyond the ticket when it comes to OTA’s? If you look closely most Airline sites now have booking engines which are pretty robust and when there are search services like iXiGo which search these same airlines which helps you compare the prices and then go on to the airline site to book then why would anyone use an OTA?

I think the answer lies in providing value beyond the ticket.. First steps are already taken in this directions by diverification into different kinds of travel like rail, hotel, bus etc. The other step that needs to be taken is that of travel planning which is a major issue I see with most travel site. If their value is going remain that of a booking engine only then the user will soon move to sophisticated search tools like ixigo and zoomtra which give you the cheapest prices across all airlines and then land you to the airline site or I will just pick up my phone and call my travel agent to do the needful and not care about the commission he charges as its the price I pay for personalized services.

Cleartrip had recently launched a product by the name of cleartrip for business and we had speculated that a Saas model for the same could be a money spinner as corporates have a lot of travel planning and if a product like that could cut costs then might as well charge for it. A freemium model so as to say. But again a longterm revenue opportunity for cleartrip. Yatra had launched Raahi sometime back and makemytrip has oktatabyebye but I haven’t heard much on both lately though I really feel content could be a big play in the travel space and another alternative way to differentiate oneself.

All in all OTA’s need to think better and think fast if they need to survive this downturn and come up trumps. As its not only the airlines they need to worry about but search engines like ixigo and zoomtra as well which seem to be eating their share of travel bookings.

6 Responses to “The Indian OTA Nose Dive – Where Is The Value Beyond The Ticket?”

  1. Sharon Dev
    December 8, 2008 at 9:37 pm #

    Well guess OTAs need to innovate more ; am happy that cleartrip.com has brought out a website for corporates though how much it adds to their business is to be seen ; guess they need to provide instant and last minute reservations of hotels as asiatravel.com does

  2. December 8, 2008 at 11:59 pm #

    Although in the current recession peopel switch to OTA for better price but the pschycology made people keep money in the pocket

  3. December 9, 2008 at 11:57 am #

    @TechLang: I think they are becoming smarter with their money rather than keeping it in their pockets

  4. December 10, 2008 at 6:24 pm #

    Rajiv–Your comment on “a measly 3% as agents commission” is a bit sensationalist and misguided, so I wanted to provide some perspective on how airline fares and commission work so that we have a more informed viewpoint and audience.

    We’ve posted more details to our blog:
    http://blog.cleartrip.com/journal/2008/12/10/when-3-is-more-than-5.html

  5. December 10, 2008 at 10:16 pm #

    @Hrush: Thanks for your comment hrush. We stand corrected on this one. I guess the devil lies in the details and reading between the lines if more important. Will keep us watchful next time around. Thanks so much!

  6. Raj
    January 18, 2009 at 1:24 pm #

    Dear Rajiv,

    Could you let us know how many search engines like ixigo.com and zoomtra are there or in pipeline.

    Because eventually, these TSE (travel search engines) will be powering / offering their saas products to upcoming OTAs thereby minting revenues.

    some insight efforts will definetly bring interesting facts.

    Looking for your reponse

Leave a Comment


+ six = 10