Guest lecture on the Online Travel landscape

Today's(November 16, 2013) lecture by Mr Harkirat Singh was one of the most enlightening and enriching experience I had after coming to IMT. The one hour was packed with information about the travel industry which he has gained after graduating from IMT in 2008. His style of narration added to the overall fun in the learning experience. Mr Harkirat was working in Infosys when he got an opportunity to join Makemytrip.com, which in 2008 was still not a publicly listed company. His love and passion for the travel industry made him grab the opportunity with both hands. He left that job after 2.5 years to start on his own and he co-founded WeAreHolidays which provides holiday packages.

Mr Harkirat talked about the difficulties which Makemytrip had faced in the early days and how they had survived over the years. Many of the companies which started with it were not able to survive. Makemytrip however were smarter. During the tough times in the early 2000's they went to the US and started working as an offline travel agent (OTA) where they operated call-centres and offline booking. This enabled them to earn revenues and survive the tough times. Then the market for air travel in India opened up when the LCC's (Low Cost carriers) came into the picture. It opened up a new stream of opportunity for the travel companies. The airline companies sold their inventory (seats) to these travel companies and in turn they charged a fee. The airlines in turn transferred their headache of filling up seats to someone else. All this while the focus has been on the air travel because of the fact that IRCTC had taken up the rail market and it was almost impossible to break their monopoly.

The next opportunity which was seen by Makemytrip.com was in the Hotels segment. But it was an extremely difficult thing to do, primarily because of two reasons

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1. The ecosystem is not supportive. The whole industry is so fragmented that aggregating the information would be a herculean task

2. The consumer behaviour would require some time to adjust to booking hotels online

But slowly and steadily, these companies have able to tame the beast.Now with companies like Redbus.in, tapping into the bus booking market was the next big thing. Again, it was a very tough task at hand. The bus travel market, especially in the northern part of India was very unorganised and not a very lucrative option for the companies. But in the southern part it is better organised and was worth a try. Initially they went to the offline travel agents and asked for a share of the seats which they the company would try to sell. But they were not entertained.  The offline agents followed a manual and tedious way to maintain the inventory and it required a whole lot of coordination from multiple parties. The agents then compromised for a very small portion, probably 4 or 5 seats. And once they were successfully able to sell it, the number of seats was increased and slowly the whole seats of the bus were given to the travel company. The market is now growing.

The next opportunity lies in the cab segment which companies like Makemytrip have already tapped into. The level of fragmentation is much higher and hence much more difficult. But as the online travel companies have found their ways in other segments, this one isn't going to be much different.

Mr Harkirat's session was very insightful and his passion was clearly evident in his session. I thank Nilanjan Sir for this wonderful session. 

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Thanks and Regards,

Vaisakh Krishnan

12DM-155

EBUS Section B