Offline travel companies mull ‘clicks-and-bricks’ model

Firms are already experimenting through their own sites with negligible business; but adoption of an omni-channel hybrid model is expected to emerge with time

Despite luring factors such as easier customer acquisition, profitability is still an issue online

Mumbai, October 7

Online travel marketplace GoFro has been busy convincing offline travel companies to list on its site. It has already got Mumbai-based offline travel company DPauls on board, and is now in talks with bigger players such as Thomas Cook and Cox & Kings to sell their packages through its site.

With seed funding from MakeMyTrip, GoFro believes its technology-led travel platform can entice more offline players to use its services.

“We are in conversation with offline travel companies such as Cox & Kings and Thomas Cook as they are interested in selling their packages on our site since we have the power to personalise packages with our technology,” says Amitabh Misra, founder and CEO, GoFro, and former Chief Technology Officer at Snapdeal.

Profitability vs technology

But profitability is still an issue with most online companies which includes the biggest player in this space — Make My Trip; so going online may take a while for the brick-and-mortar players despite luring factors such as easier customer acquisition and technology.

The two biggest offline players are already experimenting through their own sites with negligible business; but adoption of an omni-channel hybrid model is expected to emerge with time.

“Profitability potential is not obvious in the online space, observes Rakshit Desai, Managing Director, FCM Travel Solutions, the Indian arm of Australia-headquartered Flight Centre Travel Group.

“At the same time, online helps in customer acquisition and in generating traffic and conversions. Despite being an offline player, we are constantly thinking about going online, and conversations are on regarding it. Meta search engines are getting customers on their sites and most offline players will evolve and decide upon a hybrid model with time.” Big offline travel agencies such as Thomas Cook is ready to invest, and is already adopting a clicks-and-bricks omni-channel strategy, assigning 50 per cent of its marketing budget to develop and inves in its digital properties and a one-stop shop portal — thomascook.in, with e-business contributing 11 per cent of the company’s total revenues.

But others like Cox & Kings are still not sure about the viability of the online space.

Complex dynamic packaging

Peter Kerkar, Director, Cox & Kings, observes: “The online players do not make money, while I am in the business of making money. The rate of failure of start-ups is high; I do not see any value in them. There is nothing that they can do that we cannot do. There is no destination or type of travel that we do not cover. The Indian market is ready for technology, but there is no travel company which can do complex dynamic packaging through the net. If any start-up can demonstrate that capability, we may consider it.”

For Cox & Kings, which has also invested behind another portal — Ezeego.com — apart from its own, about 4-5 per cent of bookings come through the net. “People should use the online sites for price comparisons to understand the product, but ultimately the safety and expertise lies with the offline companies,” added Kerkar.



Published on October 07, 2016

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