Inadequate infrastructure an obstacle for India's online travel growth

As per McKinsey and Company India has the third largest internet user base in the world and in digital maturity India’s travel sector is ahead of other sectors.

During a recent panel discussion on online travel trends in India, held in Mumbai, Gunjan Soni, Principal at McKinsey, revealed that a large number of Indians use internet to search travel related information, but make the final purchase offline.

To change this pattern, MD of Kuoni, Rajeev Wagle, emphasizes speedier and more affordable internet access on mobile phones. He says, “Mobile internet is going to lead the way. Therefore, India needs to develop its M-Commerce potential by designing payment gateways to suit mobile phones so that consumption of travel content can turn into transactions. The government has to put together a regulatory framework for this.”

Having anticipated the reach of mobile internet, ClearTrip.com, has already created Travel apps and other online travel services providers are also waiting for M-Commerce regulations.

Chief Business Officer of MakeMyTrip.com, Mohit Gupta says “We’re working on a white paper, to submit to the RBI, on the need for stream-lining and optimizing payment gateways to catalyze the growth of eCommerce. Visa-application process is another important factor for travel. Some countries allow online Visa application, but not others; to aid customers we’re offering visa services in 30 cities across India.”

Tour agencies with walk-in outlets usually allot one adviser to an interested client, but websites of online travel services provide helpline numbers. Customers find it frustrating to to talk to different advisers during different calls. MakeMyTrip.com has had partial success in addressing this issue with its centralized query-storing system that allows them to intimate advisers about queries from their previous clients. But this too doesn’t work when s/he isn’t around.

Citing another problem, Gupta adds, “Many Indian hotels still record booking information in registers, they don't have online records and are unable to intimate us about new reservations immediately. Therefore, information about room availability on websites may differ from ground reality. To tackle this we’re making it easier for hotels to update us through text-messages.”

Purchasing tickets online has become common place in India; ClearTrip.com generates 65-70 per cent of its business from it. Hence, major airfare fluctuations are also unhealthy for the industry. Stuart Crighton, Founder and CEO of ClearTrip.com, says, “The volatility in aviation and ticket pricing makes predictability difficult, which is challenging for any business and also has a domino effect. For example in the last two or three quarters hotel occupancy is very low, because the price of tickets is very high. It is an issue for the travel industry at large.”