Increased user-base from Tier-II cities through localised content and better outreach can help increase online travel base substantially according to experts.
The online travel spend in India can witness $24 billion in incremental online travel spending by 2021, if online players break significant barriers in online booking as per a report by Google and Bain & Co, titled ‘How Does India Travel?’. The report states that platforms can benefit from this boom ‘by providing access to the underserved and by localising content’.
Out of the total online travel spending, the contribution of travellers from Tier-II+ cities was less than 5 per cent. Increasing online user-base from these cities can raise the travel spend significantly. The lack of familiarity and vernacular content on such platforms pose a challenge for travellers from these cities.
“The biggest challenges are lack of familiarity with various travel platforms, lack of adequate vernacular content and trust issues with spending considerable amounts on flights and hotels well in advance of travel,” Sriwatsan Krishnan, Partner, Bain & Company, said.
Recognising the potential, online players are looking to fill the gap by tailoring their platforms to attract more users from these markets.
Focus on content
“We have recorded an organic growth of nearly 100 per cent in traffic for FY19 . Out of this, 60 per cent of our traffic transactions are being driven from Tier-II, III and IV cities, and localised content has been a big driver of this growth,” said Rajnish Kumar, Co-founder, ixigo.
“Our focus in the coming year is to leverage video, voice and vernacular content to drive faster growth in next billion users segment through growth in train, bus, budget hotel and first-time flyers segments by continuing to build innovative experiences for travellers in India,” he said.
Online accommodation booking platforms are also looking to gain a major chunk of user-base from these cities for further growth.
Amanpreet Bajaj, Country Manager, Airbnb India, said that India was becoming a ‘centre of influence’ in global tourism and 410 million millennials were driving the consumer trends. “As per our internal data, domestic travel on Airbnb in India has increased by 78 per cent in the past one year, which further signifies the contribution of the Tier-I and Tier-II+ cities to the overall growth,” Bajaj said.
“We see a lot of traction from Tier-II and Tier-III cities in India,” said an OYO Rooms spokesperson. “ Currently, In India, we have over 10,000 leased and franchised buildings and over 2,00,000 rooms, with footprints in over 300 cities which includes majority of Tier-II and Tier-III cities. With our multi-brand strategy that offers curated experiences for all kinds of travellers, we aim to reach out to the masses and cater to guest demands. With the app being a popular platform and growing internet user base, we plan to offer multilingual support to reach out to the masses.”
Areas that need attention
Lack of online penetration in the interstate travel market is another major issue as stated in the report. “The interstate market supply is primarily offline. Effective online platforms that offer interstate travel options could take off reasonably, but providers haven’t focused on it because of lower ticket size, lack of organisation of supply, unproven business model, etc.,” Krishnan said.
“Interstate travel is dominated by trains and buses and for reserved train travel in India, only 40 per cent of tickets are being booked online, whereas for inter-state buses less than 20 per cent of the market has moved online. There is still a lot of scope to grow this market as the internet penetration levels and smartphone ownership increase in the smaller towns,” said Kumar.
As per the report, Indian travellers had spent about $94 billion on domestic and international trips. The expenses accounted for lodging, transportation and consumption during travel. Online travel platforms held 25 per cent of the travel market in 2018.
( The writer is an intern with Business Line's Mumbai Bureau)