70% travel trade gone online; airlines marching towards 100%: ASSOCHAM

The Railways too has made a significant dent in the ticketing through internet.

July 21, 2014 8:37 IST | India Infoline News Service
Over 70% of travel trade in India has gone online and the figure will likely reach 85-90% in the next five years with maximum of internet usage being seen in airlines ticketing, luxury and mid-segment hotel bookings and the Railways with the booking agents mushrooming even in smaller cities, an ASSOCHAM study has said. 

In the case of ticketing of airlines, the internet penetration and usage has already crossed  95% with hardly anyone seen on the airlines counters or even at the counters of the travel agents, who themselves have gone online. 

The Railways too has made a significant dent in the ticketing through internet.  Though the Railways carries 13 million passengers per day, majority of them are those who commute daily to their work place mostly  through the monthly season tickets in the metro cities or within distances of 100-120 km. The ASSOCHAM study excluded such categories of daily commuters from the travel trade… 

But the size of the internet usage in the Railways can be gauged from the fact that its subsidiary IRCTC, generates about one lakh e-tickets per day while two lakh people visit its web site daily. “But as the e-governance enhances further and the Railways modernises, the level of internet penetration will increase even among the daily passengers and local commuters. At present, it is largely restricted to the express and mail trains, as indicated by our study,” ASSOCHAM Secretary General Mr D S Rawat said. 

However, it would also depend on the broadband spread in the rural areas and working of smart cards. 

While the hotel booking in the high-end and mid-segment has moved on the internet bookings, the progress is still lacking in the low segment hotels. In smaller cities, especially among the pilgrim centres, tourists still go un-booked, though the trend is changing. 

In so far as the star category hotels are concerned, the online looking is almost above 95%, while among the mid-segment, it is catching up fast…..It is somewhere in the range of 80-85% among the popular tourist destinations, especially in the big cities. 

Despite some of the portals like Redbus etc…..the travel through buses has not really gone online for booking. 

While some of the progressive road transport corporations like in Haryana are modernising, it will take time and lot more resources for the internet penetration among bus operators. One of the reasons is the sector is largely fragmented among the private operators, majority of whom operate on a small scale with fleet size as low as two three buses. On a national scale, the internet booking is less than 10% as per estimates by the study. 

The ASSOCHAM study noted that the mushrooming growth of travel websites , some of them with big budget , has contributed significantly to the online catching up with the tourists. “The trend is likely to only grow with more services on SMS, logistics supports, etc on the increase”, the study pointed out. 

The travel portals have also contributed to the increase of businesses for the mid-segment and small hotels, while on the consumer confidence scale, a lot more needs to be corrected. For instance, gaps are noticed between what is promised on the portal and what the real deal is. 

“Increased competition among these portals will lead to better services and only the ad spend will not work.  The word of mouth through the social media makes a huge difference and the trend of users’ experience sharing should only be encouraged by the likes of Facebook and Linkedin“,Rawat said. 

Besides, the consumer redressal system should be encouraged and put in place both at level of the industry organisations and associations and also by the states and centre.  In fact, the industry should itself take the lead and form self- governance models with the help of apex bodies. 

However, if there is one segment which has remained largely outside the Internet penetration – it is the foreign exchange business, “because of sensitivity of business and strict regulation”, it said. With newer technologies coming by the day, even the foreign exchange businesses of money-changing will shift fast to the online delivery models, while pre-paid limited period debit cards have been launched by leading money-changers. 

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