Recap 2008: Online Travel

The year 2008 can be termed as the year of online travel as this space has seen immense traction all throughout the year. Whether it was launching of discounted travel, expansions, acquisitions, investments, aggregation or even shut down the online travel space has seen it all during this year. It would be an understatement to say that 2008 was an eventful year for online travel. The main players in this space are makemytrip, cleartrip, yatra, travelguru, ixigo and zoomtra and international entrants like expedia and travelocity.

cleartrip-yatra-travelguru-makemytrip

Lets have a look at the sequence of events for the online travel space:

The online travel year started with the news of Railways opening their API. The travel space by 2007 year end has already started seeing some signs of consolidation with Travelguru acquiring desiya. Then by year start 2008 the API news of Indian railways prompted players like makemytrip and cleartrip to launch products around railway search and booking and even railway booking through mobiles. Around the same time we at WATBlog questioned the power and potential of travel 2.0.

While the race for actually having rail ticketing was on another vertical bus ticketing was booming in the early part of 2008 and standalone players like Redbus and ticketvala were booking bus tickets like never before. Besides for bus booking the hotel booking vertical also has started taking shape and some players like travelguru had started focussing on this vertical while sidelining flights. There were also new entrants into the hotel booking space like Lomanika.  While OTA’s continued to diversify, reposition and add multiple travel modes to their kitty an aggregator of travel booking in iXiGo.com known as a travel search engine announced its seed investment from a singapore based VC firm.

This wasn’t the only funding deal.. Soon Cleartrip announced the biggest ever funding deal in the Online travel space a whopping 18.5 Million $ and by their own admission they stated that they had raised more money than required. All this money was being justified by travel players by quoting futuristic market size of 6 billion dollars by 2010.

Given this optimism about the online travel market it was evident that there would be entry into the Indian market by International players and so it happened when Expedia one of the worlds largest OTA’s entered the Indian market. The OTA also created tie ups, won awards and looked at going offline while the shift continued towards aggregators.

The first half of 2008 was probably a dream run for the OTA’s but the second half brought the news of layoffs and also of dwindling margins on ticketing which forced them to look at alternative sources of revenue.

By the september end the ticketing revenue via flights had started to dwindle with high oil prices playing spoil sport as a well as the slowdown sinking in globally by october. This led to further diversification in products and services as wel as going offline from OTA’s and the rise of aggregators who were providing cheapest ticket info and quietly eliminating the value that OTA’s provide which frankly was little outside of a ticket. Travel aggregators like Kayak entered the market and even Zoomtra look at expanding by going international and adding value added features through tie ups.

As the year was coming to a close iXiGo came to the forefront with multiple deals and tie ups like the one with NDTV and a big one with Travelguru. Even Cleartrip looked at diversification by powering Hotel search and rail booking on IRCTC site with their API. Cleartrip also launched a corporate travel planning product to try and look at revenues and value beyond ticketing. There was also new launches in the hotel comparison space in hotelly and the repositioning of focus by Thomascook on domestic B2B market by year end. International players like travelocity also launched in India during the year and by year end they were planning a major ad spend on online advertising. So if International players were spending money there were players that ran out of money as well and the year end brought the shutters down on a travel deal aggregator tripmela which went on sale on ebay.

All in all to summarize the year belonged to aggregators like iXiGo and OTA’s that diverisified and diversified fast into verticals like hotels, rail and bus travel. Also by the end of the year travel planning and travel related content came into focus as well and all of this indicated that in 2009 the value beyond the ticket will define the success of travel players in the online space.

3 Responses to “Recap 2008: Online Travel”

  1. December 31, 2008 at 6:49 pm #

    Ixigo rocks :)

  2. January 2, 2009 at 11:44 am #

    @ Awesome Recap of Indian Travel Industry.Thanks a lot for aggregating all events in a single post.

  3. G10
    January 11, 2009 at 10:29 am #

    I would like to question about integrating all search results into one ? I am actually a budding developer and would like to try this out. Normally i look out on all these sites and compare prices and then i compare deals (credit cards, cashback etc) and then make a decision. I would like to ask like is there any obligation, legally, if i make a webpage where user enters his travel plan and the tool searches all these sites and then display offers consolidated on one page ?
    Pls do reply :)

Leave a Comment


+ five = 9