Travel companies rely on offbeat destinations, tech adoption to beat slowdown

Forum Gandhi | | Updated on: Aug 21, 2019

Despite the lack of policy boost, industry players are hoping for a revival soon


Online travel company Easemytrip is focusing on promoting offbeat locations these days as a way to beat the overall slowdown in the travel and tourism industry.

“At present, we are focusing on promoting offbeat locations that are equally beautiful but lesser-known and less crowded. We are also coming up with various offers and discounts to entice more travellers to go on holidays,” said Nishant Pitti, CEO, and Founder of EaseMyTrip.

On the other hand, Cleartrip is betting on technology to get more travellers. Balu Ramachandran, Senior Vice President, Cleartrip said that the aim is to enable consumers to make smarter choices by offering wider options, a filter for arriving at the best fare versus duration decision, and enhanced multi-city search to help make travel simple.

For Yatra, penetrating deeper into the tier 2/3 markets opened up newer avenues. “ has products and offerings specific to customer needs which have widened the base of holidaymakers,” said Sharat Dhall, COO(B2C), Yatra Online.

Hit by one of the worst short-term slowdowns in the travel and tourism industry, players seem to be tapping on tech-pivoted solutions, diversifying business geographically and offering smaller, customised products.

Towards the end of 2018 and 2019, the travel and tourism sector in India has been influenced by various macro factors domestically and internationally. With the grounding of Jet Airways and Boeing 737 Max along with the temporary closure of the airspace in Pakistan, the travel industry in India witnessed a negative fallout that played as a major catalyst for this slowdown.

According to industry players, economic slowdown and rupee fluctuations are also some of the key factors for the prolonged slowdown.

“We all know that trade war hurts tourism the most leading to a decrease in flight bookings. As a result, political tensions accelerate and tourists avoid taking trips,” said Pitti of EaseMyTrip.

Growth in air travel

Pricing has also gone up significantly with last-minute fares increasing by over 40 per cent on a Month on Month basis in many sectors. “The number of air travellers in India registered a year-on-year increase of 2.62 per cent between January and May 2019, growing from 571.58 lakh to 586.54 lakh. This growth rate was a steep climb down from the 15-20 per cent growth rates that the sector witnessed over many previous quarters,” said Ramachandran.

However, according to MakeMyTrip, capacity allocation to airline operators in recent months has helped rationalize fares and shown an uptick in the bookings in the recent past.

“We noticed that travellers tweaked their plans with many choosing cheaper yet, exotic east-bound international destinations. Also, as the summer travel season coincided with marquee global sports events such as ICC World Cup and Wimbledon, there was an increase in the number of bookings to London, Manchester, and Birmingham,” said a spokesperson at MakeMyTrip. To combat the slowdown, MakeMyTrip found its niche by providing experiences on their platform that allows domestic and in-city customers to book unique hyperlocal leisure activities.

To cater to the cost-conscious traveller, Yatra has recently introduced a ‘Flexi Stay’ feature which allows customers to book mid-budget and premium hotels with anytime check-in / check-out while only paying for the time they use the room.

MakeMyTrip has introduced a new category - Weekend Getaways, that allows customers to plan cost-effective short holidays. According to a spokesperson, “the new category addresses an emerging trend amongst Indians of making the most out of long weekends by getting out of home cities and indulging in new experiences while travelling to new places.”

Hope on revival

According to the spokespeople of EaseMyTrip and MakeMyTrip, the current government’s move in the Union budget of development of 17 iconic tourism sites into a world-class tourism destination and investing ₹ 100 lakh crore over the next five years for infrastructure development could trigger a revival.

Industry players like Cleartrip and Yatra have high hopes from the recent decision to hike Foreign Direct Investment in the aviation sector. They believe it will attract increased interest in the Indian aviation space by enabling controlling stake for foreign carriers. This, according to them, should add momentum to the Air India privatization process which is crucial for the sector.

However, industry expert, Pavithra Ponniah, Vice President, ICRA, believes that “Budget 2019-20 has not provided an impetus to the domestic tourism industry. Plans for the development of tourist circuits and sites have been announced in previous budgets also but the implementation and impact on tourism have been limited. "

According to MakeMyTrip’s spokesperson, in the Budget 2019-20, “there was no specific mention of fund allocation for UDAN, the regional connectivity scheme which is disappointing given it needs special attention to boost domestic travel which has seen some headwinds over the last few months.”

Despite the lack of policy boost, industry players are hoping for a revival soon, although it may not return to the growth rate witnessed before the collapse of Jet Airways.

Published on August 20, 2019
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