A recent Google India-BCG report has projected the overall Indian travel market to reach $48 Bn by 2020 at a CAGR of 11%-11.5%. In May 2016, this number had been predicted at $40 Bn, as per an IBEF report. According to IBEF, the online travel market alone is expected to account for around 40%-50% of the total transactions by 2020.
Prior to this, a 2014 report by research firm Aranca estimated the online travel market in India at $9.1 Bn which included – air travel ($5.1 Bn), rail travel ($3.1 Bn) and hotels (0.8 Bn). These numbers have now increased multifold.
Key Predictions: Indian Online Travel Market 2020
- Air travel will reach $30 Bn by 2020 growing at 15%. It continues to be the dominating category. It will be closely followed by hotels ($13 Bn) and railways ($5 Bn).
- With the increase in smartphone penetration and digital payments usage, India’s online hotel market will grow to $4 Bn with 31% penetration at a CAGR of 25%.
- By 2020, one in three hotel rooms will be booked online – a clear indicator of the growing importance of digital in travel research, planning, and booking.
Speaking about the key findings of the report, Vikas Agnihotri, Industry Director, Google India said, “There are several actionable insights for domestic online travel players including the role of mobile and the level of curation and personalisation that Indian travellers are looking for.”
In general, a typical journey of an individual traveller encompasses the working together of many industries. From getting tickets to booking hotels, consulting travel agents to hiring tour guides and transportation services – the inherent scope has always been immense. With the addition of the term ‘online’ here, the one factor that has been added is – convenience.The Google India-BCG report titled, ‘Demystifying the Indian Online Traveler’ is based on this decision-making journey of the Indian traveller.
It identifies the various touch points during travel, based on the online and offline behaviour of the travellers. An eight-week study was conducted during November 2016 to January 2017, to analyse the online and offline behaviours of 256 intending travellers. The online behaviour was captured via a passive meter-tracking app (GfK Leotrace (TM)) installed in the smartphones of 18-45-year-old respondents. These respondents were travelling for domestic leisure/ business travel in a two-month period. The respondents were Android users spread across three cities – Delhi, Hyderabad, and Ahmedabad. They were regular Internet users who had booked at least one flight in the past one year, online. The offline behaviour was captured through bi-weekly diaries and a face-to-face interview towards the end of the tracking period.
The Google India-BCG Report: A Traveller’s Perspective
The Google India and BCG report show that, for a majority of Indian consumers, a vacation is a well-thought through the event. Planning for which begins several weeks in advance. On average, travel consumers spend 49 minutes spread over 46 days, visiting as many as 17 different online touchpoints to plan, research, and make a booking.
These touchpoints majorly include online travel aggregators aka OTAs (64% reach), search engines (33% reach), and maps (26% reach). 76% gain inspiration to travel from family and friends and word-of-mouth form an important input when it comes to travel bookings. Also, reviews and ratings from other users are the single most important criteria to select a certain booking channel.
However, each online session lasts less than three minutes due to the ubiquity of mobile. As stated in the report,“Through their journey, Indian travellers tend to flip back and forth across different online destinations, checking availability and comparing prices across different providers and connectivity.” Finally, the research finds that consumers use a mix of online and offline sources of information during their booking journeys. However, only 12% of the consumers prefer to use offline sources for research. 57% of the consumers believe that online channels give them better deals, while 41% find it more convenient to book online.
Online Travel Market In India: Current Status
The growth in the Indian online travel space has been fuelled by many key drivers. These include the increase in household incomes, rise in ecommerce and smartphone penetration, and the Government’s attempts to ease out on-arrival visa policies in other countries etc.
However, with increased competition, high cash burn rate, and reduced margins, the companies in this sector have now been divided into two segments. Traditional players which majorly started with an online ticketing service and then bloomed into different verticals.
www.TransHimalaya.in is known as the change makers in the Indian online travel, moving the sector to another level of maturity.
A New Breed Of Players Have Emerged In Online Travel
The second category is a new breed of players focussing on one unique niche such as hotel booking, weekend trips, long trip planners, last minute hotel bookings, adventure trips planners, etc. Also, along with them is the thriving transportation industry which majorly includes cab services.
The second category includes startups like www.TransHimalaya.in providing long holiday vacations and custom trekking plan in Himalayas of Nepal & India.
Talking about the opportunities for the online travel players, Abheek Singhi, Senior Partner and Asia Pacific Head of Consumer Practice, BCG said, “Travel is a high investment – both monetary and emotional – category. Technology has led to the democratisation of travel through better information and price discovery – and shall lead to 11%-11.5% growth in years ahead. The question is “ how to address the 17 different touchpoints of three minutes each over 49 days! The imperative thing for players is to use technology and advanced analytics capability to understand individual micro journeys and offer personalised and curated travel solutions.”
-- www.TransHimalaya.in
source: https://inc42.com/buzz/google-india-bcg-indian-online-travel-2020/
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