Travel and tourism is one of most promising and mature industry segments in
India. Today, it is the second highest foreign exchange earner for India, and
the government has given travel and tourism organizations export house status.
The buoyancy in the Indian tourism industry can be attributed to several
factors.
Firstly, the tremendous growth in the Indian economy has resulted in more
disposable income in the hands of the middle class. Secondly, India's status as
an IT hub has been attracting more business travel, and thirdly, the aggressive
advertising campaign, "Incredible India" by the tourism ministry has played a
major role in changing the image of India, making it a viable hot tourist
destination.
Growth Prospects
Within the Asia Pacific region, India surpassed the regional average in
terms of growth in foreign tourist arrivals (FTA) and foreign exchange earnings
(FEE). While arrivals grew at 14.3 percent, receipts from tourism increased at
24.3 percent in 2007. In absolute terms, 5.08 million foreign tourists visited
India and spent $10.73 billion in 2007. The share of tourism to India's GDP and
employment for 2008 have been projected at 6.36 percent and 10.17 percent
respectively, increasing from 5.83 percent of the GDP and 8.27 percent of total
employment in 2002-03. According to the World Travel and Tourism Council's (WTTC)
2007 economic research on India, total tourist demand is expected to grow by 7.9
percent per year in real terms between 2008 and 2017.
According to Dhiren Savla, CIO, Kuoni Travels, today a majority of the
domestic travel demand goes through the unorganized sector, and mom-and-pop
shops. Over the last few years, with the entry barrier coming down and the
online channel playing a major role in the fulfilment of delivery, more and more
players are entering the market. Also, the players who are not typically in the
tourism segment, such as airlines and hotels, have also started tour operating
packages.
Adopting IT
Growing impressively, the online travel industry in India is estimated to be
worth $6 billion by 2010. The travel boom, emergence of low-cost carriers,
proliferation of the Internet and the growing acceptance of e-commerce over the
last few years, are key factors that have contributed to the emergence of this
sector as a formidable force in the overall travel industry. As the industry
leader, MakeMyTrip has pioneered technological advances in this sector and is
constantly innovating using its website interface. From being the first online
travel portal to providing real-time hotel bookings in India, access to the
website, payment through mobile phones, and now a first-of-its-kind search
matrix that enables effective hotel search, it has employed technology to
enhance customer experience using the website. "We value-add to the user's
experience using Web 2.0. For example, we have illustrated the hotels section
with comprehensive staff-undertaken hotel reviews. Further, it includes mapping
of hotel locations with reference to the city center, and major local
attractions," says Deep Kalra, CEO, MakeMyTrip.com.
This year MakeMyTrip.com offered India's first comprehensive travel product
on the mobile. This allows customers to search, book, pay and fly through
transactions and PNR solely on the mobile phone. "We have a tie-up with Paymate
and Airtel to offer m-commerce since over a year now," says Kalra.
The popularity of IRCTC, the official ticketing website of the Indian
Railways, is another example of the success of online travel booking websites.
IRCTC almost dominates 80-85 percent of the total railway ticket booking in the
online space.
Following a similar model, a new player in the industry Redbus.in has tapped
into the unstructured bus travel industry to provide online bus ticketing across
India. Witnessing the growing success of the online transaction mode, most
conventional travel agencies such as Cox & Kings, Kuoni Travels, and Raj Travels
are also exploring innovations in the online space through the Web 2.0
interface.
Cox & Kings works with Oracle Financials for its accounting application and
has deployed SAGE CRM across the network. "We also have in place a real time
booking engine for all our products and packages which is integrated with all
the point of sale locations-branches, agents, franchisees, direct clients,
corporates," says Viral Gandhi, CIO,
While the large players have partnered with reputed IT vendors for developing
applications, the comparatively smaller players and late entrants like Redbus.in
have gone the open source and SaaS way to optimize costs. "Redbus is in the
process of deploying a Sugared CRM, which works well with our entire open source
strategy. We are also planning to explore the custom built SaaS applications,"
says Phaninder Sama, CEO, Redbus.
Raj Travels too that has gone entirely adopted Saas for developing its
internal applications and has outsourced most of its IT operations in contrast
to its competitors.
BPO Booster
Over the last few years, the travel and tourism segment has been one of the
biggest contributors to the growth to the BPO industry. While some of the big
players in the travel industry have outsourced their contact center functions to
BPOs, others have built captive BPOs to provide last mile service to their
customers.
Kuoni has a large BPO arm named VFS, which deals in visa processing work
across forty-five countries. While Raj Travels has a twenty-five people captive
BPO close to its head office in Mumbai, Redbus has put in place a distributed
BPO set-up across six cities to deal with the local nature of its operations.
With the introduction of newer travel concepts such as space travel and high
net worth; individuals willing to shell-out a premium for special frill
services; and the discovery of virgin travel destinations, the industry has been
driving the demand for technological solutions that can make their business more
scalable and robust.
The travel and tourism industry has come a long way in terms of selling the
ultimate consumer experience. In an industry where innovation is short-lived, it
will be interesting to see how the players further leverage on technology to
create brand loyalty and establish a repeat customer base.
Priya Kekre
priyak@cybermedia.co.in