On February 12, the big daddy of online travel, Expedia, with gross bookings of $25 billion globally in 2010, will be doing a splashy brand launch in India. Surprisingly, the campaign, on which the company is spending Rs 25 crore, comes two years after Expedia's entry into India. Dan Lynn, Managing Director and Vice-President, Expedia Asia-Pacific, explains the last two years were spent building the inbound business to India, and it's only now “we have set ourselves the objective of getting into the top five online travel sites in India”.

But Expedia has its work cut out as online travel is a fiercely competitive marketplace in India. Over a dozen players are fighting for a pie of the $5.7-billion industry size that online travel has become. Already the online business is  22 per cent of the total travel industry size of $19 billion. Not surprisingly, the top players are scrambling to build mindshare.

Take Cleartrip, said to be No.3 in the online travel market in India, which just last month launched its “Every Trip has a Purpose” campaign with television commercials that tell 80 personal stories of travellers – a clear attempt at customer engagement. According to CEO Stuart Crighton, Cleartrip, which has been around since 2006, has launched this campaign now not only to reinforce the portal's appeal to existing customers but to go out and acquire a whole new set of customers.

Action at the top

Make My Trip and Yatra.com, No.1 and No. 2 respectively in this segment, have not been idle either. Both are aggressively promoting themselves as one-stop travel solutions. Make My Trip, which claims to have over 48 per cent share of the online travel market in India, had a fairytale IPO opening on the Nasdaq last year.

According to Amit Somani, chief products officer, the portal will be utilising some of the money for acquisitions. “It's one of the reasons we went public. We are open to any and all categories for acquisitions – new business, international expansions, technology …,” he says.

As for Yatra, it has visibly been moving its brand positioning from being known as a domestic ticketing brand to a one-stop travel solution brand. “We are trying everything to ensure that the Yatra customer comes to us for different products – not just for domestic ticketing,” says Pratik Mazumdar, head of marketing and strategic relations, Yatra.com. He describes how Yatra has started an aggressive loyalty programme to ensure that existing customers stay with the portal and is at the same time trying to acquire new customers by ramping up offline presence and through print and digital campaigns.

The numbers show that the online travel circuit is already going places. According to international online travel research agency PhocusWright's report of September 2010, by 2012, nearly one-third of the travel industry's gross bookings are expected to be completely online. According to Expedia's Dan Lynn, in 2012, the online figure would have climbed to $7.3 billion in an overall market size of $22 billion.

The fact that the segment has achieved such numbers despite India having a poor Internet penetration of just 7 per cent is what is enthusing the online travel players. Estimates are that 34 per cent of air tickets and 14 per cent of train tickets booked in India are sold online. And, despite the clutter, the various players insist that the online market is still underpenetrated. Crighton, for instance, says that in terms of absolute numbers, the Indian online market is huge and at an early stage of growth still, and there is sizeable opportunity. This explains the branding battle being played out now. Even offline biggies such as Cox & Kings realise that the Net is the place to be on and are investing in the medium – Cox & Kings' online portal is ezeego1.com – in a bid to get to the front of the pack.

Brand Differentiation

So, given the clutter, how are the players differentiating themselves? Expedia's Dan Lynn says it will ram home the global scale advantage - its campaign created by Lowe Lintas, which will be primarily outdoor and online with heavy use of billboards and activation units in airports, stresses it is the big daddy of them all. “With 160,000 people booking hotels with us daily, offices in 85 countries, and a choice of more than 130,000 hotels, we have the reassurance of scale,” he says.

Currently, Lynn admits that Expedia, which was started by Microsoft before being spun off, is way down in the pecking order of online travel sites in India. But he points out that when they came in, “we didn't have the right products for India.” Now, he believes the site has finally got the products that will appeal to India and also is a much faster site.

Other special hooks, he says, will be the heavily discounted inventory – Expedia does not charge any booking fee either. And while this is how it will cater to the price-sensitive Indian market, it's not going to fight the battle on price alone.

According to Lynn, after an intensive survey of the Indian online consumer, Expedia segmented the Indian consumer in three slots – the recreational traveller who tends to buy readymade packages and keeps doing repeat journeys to Thailand or Goa (making up about 30 per cent of the online market), the experimental traveller (60 per cent of the online market and mostly from metro cities) and the experiential traveller (just 5-10 per cent of the market), who tends to do completely offbeat stuff. Lynn says Expedia is firmly focused on the experimental traveller.

Both Make My Trip and Yatra, on the other hand, are wooing all segments, whichexplains their aggressive offline growth. Yatra's Mazumdar points out how the portal has set up over 40 Yatra lounges in 20-odd cities to overcome customer hesitancy in online transaction as well as woo the high-ticket, high-margin product consumer, who typically would shop with a Thomas Cook or Cox & Kings and buy a Europe package for over Rs 1 lakh.

Says Mazumdar, “In 2011, the focus will be on making customers aware of Yatra's international bookings.” (Incidentally, Cox and Kings and Make My Trip are fighting a legal battle over alleged trademark violations by the latter in coming up with deceptively similar URLs to ezeego1.com.)

Make My Trip, meanwhile, has 30 retail stores for the same reasons. It has also been busy sewing up every segment in travel, be it mobile apps – just last week it launched a native application on Blackberry - bus tickets, B2B agents, the high-end customer or the offline shopper. “We want to be present at every customer touch-point,” says Somani.

On the branding front, Somani says although the decade-old Make My Trip is an established brand with four million unique visitors every month, it will not be sitting on its laurels. From jingles to virals on YouTube, presence on Twitter, Facebook, and so on, it has been driving home its brand value propositions. “We are spreading the message that we are a responsible traveller, promoting green travel. We are the only ones that let you offset your carbon footprint,” says Somani. The site calls for donations which will be given to an NGO working for afforestation in Rajasthan.

ClearTrip's Crighton, meanwhile, harps on the portal's brand value proposition of keeping things uncluttered, reflected in its simple user interface. “We were clear we will not take advertising on site. This is to ensure that bookings are done faster. So we do things like that,” he says.

Going the mobile route

Even as Internet penetration is forecast to touch 250 million in 2012 from the current 80 million (this includes wireless devices as well), it's the mobile space that all the online travel players are most excited about. With 3G coming in and the explosion in mobile penetration, a lot of monetisation can happen through this route, is the feeling. So, Expedia has integrated with Nokia's Ovi Store as well as launching an iPhone-optimised application through Mobiata, the world's leading developer for iPhone solutions, Make My Trip has its Blackberry application and Cleartrip has a dedicated mobile site. Yatra's Mazumdar says their mobile application is under development.

Cleartrip's Crighton predicts that going forward the mobile will be the significant differentiator for the online travel companies. “Our mobile site launched four weeks ago is doing very well. Once 3G comes in, you will see further acceleration,” he says.

The battle for the online travel space is clearly getting fierce … watch this space to see how the journey pans out.

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