Info-tech

‘Growing internet penetration, digital payment are unblocking a huge potential in Tier-II/ III markets’

Rajesh Kurup Mumbai | Updated on August 08, 2018 Published on August 08, 2018

RITU MEHROTRA, Country Manager, India

Booking.com, which had officially opened a local office in the country in 2012 following the earlier listing of The Metropolitan Hotel & Spa, New Delhi, now has about 47,750 properties in the country. The Nasdaq-listed travel aggregator, which started with just 4 employees, now employs 70. The Amsterdam-headquartered company is betting big on the rising smartphone penetration and emerging e-commerce to drive its business in the country. In a tête-à-tête with BusinessLine,Booking.com’s Country Manager, India Ritu Mehrotra says East India is growing well from the tourism-travel point of view. Excerpts:

How is the Indian online travel market faring and what are Booking.com’s plans for that?

The Indian travel market, which is at the centre of the global spend and is growing at about 30 per cent year-on-year, is at about $12 billion as per the latest statistics. Within that, I think online travel space would be about 20-25 per cent, which is also growing at a similar rate. Overall, online is growing at a fast pace.

We are a meaningful player today in the market. Booking.com has grown at about 68 per cent in 2017-18 in terms of supply. So, if you look at the total number of supply that we have, we are much better than our competitor. The global online travel industry stands at about $1 trillion.

Internet penetration is still low across Tier-II and -III cities in India. How do you plan to overcome this hurdle?

India is an important market for us, not only in Asia, but globally as it has seen the biggest growth in Asia-Pacific for us in the last year in terms of supply, outpacing China. I think internet penetration is growing, with the smartphone penetration in India being at 415 million now. With this, there is a rapid upsurge in the usage of digital payment in Tier-II & III markets, unlocking a huge opportunity provided by the e-commerce-ready users to drive online hotel penetration.

Until recently, most customers in Tier-II and Tier-III cities in India preferred booking hotels and accommodations through offline means, which is changing swiftly as we move ahead.

East India now features high on your chart, with Booking.com opening an office in Kolkata, What’s driving tourists to that part of the country?

East India is growing very well for us as from the tourism-travel point of view, it was relatively untouched. The North-East is a promising destination and we see a lot of potential for growth, both in terms of new properties and customers seeking new travel experiences. The Kolkata office will also be responsible for managing our business in Nepal, Bangladesh and Bhutan, which are increasingly becoming popular destinations for the Indian travellers. The challenge, traditionally, has been the low-internet penetration and bandwidth, and roads and infrastructure needing upgrades. Having said that, the demand has actually gone up in places like Gangtok and Darjeeling.

We will continue to bring not only luxury accommodation, but also accommodation for the experience-seeking travellers. Kolkata is growing as one of the top destinations for Booking.com, even though the big part of our business comes from Kerala, the Golden Triangle and Ahmedabad.

How difficult is India as a market compared with geographies such as Europe and the US?

It’s easier to penetrate across most of the Western world as supply is easy and property managers already have an understanding of internet connectivity and penetration. So in India, especially when people opt for leisure travel, they like to travel with families. So how do we integrate that such as child policy, a more-friendly approach as people will travel in groups. So those were some tweaks that actually needed in a market such as India.

For the travel industry, transportation is also emerging as a big business. What are your plans on that front?

One step at a time. So right now, we started our home supply last year. Now our intention is to accumulate that and make sure that we have enough supply by the time demand comes in.

We will be introducing experiences, we’re still experimenting. Today we do have car rentals and even flight bookings.

Are you looking at inorganic growth in India?

To date, our growth has been organic in India, if something comes along the way, we would be happy to look at it.

Published on August 08, 2018
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