Facets of global Online travel industry with a view to seek growth; perspective, understanding and trends
A guest Lecture was conducted on online travel industry in our campus of Sunstone Business School on 6 September, 2014. Mr. Manish Gupta, an alumnus of Sunstone Business School and One of the Senior Vice President from Rate Gain IT solutions Private Limited was invited as a guest for this event. This lecture lasted for two hours and it encompassed some essential insights from online travel industry. This article has been written to exhibit those insights which were discussed during the lecture.
Travel and tourism industry is one of the world’s largest industries, and online travel industry is its subset. Over the past few years the online travel industry is constantly being noticed for its steady and increased growth. This growth has been primarily stimulated by the augmented use of internet and diversity available in the form of devices for its use. In addition to that, factors like globally improved infrastructure, developments in the transportation and logistics area, eased visa norms and other such ingredients have provided a perfect blend for the growth of online travel industry across the globe.
Definition, structure and functioning style of global online travel business:
Online travel industry includes flight booking, hotel –booking, rental cars, Ocean trips and other activities over the web. This industry includes the well-known companies like, Orbitz worldwide, Travelocity, Expedia and Trip advisor.com. Apart from that, Make my trip.com, Yatra.com and Cleartrip.com are the big names composing the gamut of Indian online travel industry.
There are three main constituents framing the global fabric of online travel industry: Suppliers, Online traveling agents (OTAs), Aggregators.
Suppliers are the airlines, car rentals, cruise companies and hotels, which sell their services to businesses and customers. Suppliers offer these services primarily through their websites, they also route their business through online traveling agents and aggregators to market their inventories. For example: – Companies such as Click air, air dream, condor, Destia, e-dreams hotel booking etc. are suppliers.
OTA provides supplier’s pricing to the customer and fulfill online orders. For example:-companies such as Expedia, Travelocity, Orbitz worldwide, Tripadvisor.com, Ctrip.com, Yatra.com are OTAs.
Aggregators provide comparison of prices of different OTAs and suppliers; resolve travelling queries and route back the customers for purchases to OTAs. These companies typically deal in building such software that keeps track of changes and discrepancy in the service pricing of the suppliers and OTAs to its customers on a real time basis. In this arena Companies like Sidestep, Kayak, Mobbisimo, Rate Gain are the leading ones.
Major trends in global online travel business:
Growth of any industry depends on various trends and same applies for online travel business and related processes. Here, only two major trends are being considered.
Transformation in online platforms: – Over the last few years developments in the IT related products have revolutionized the online travel business. Global shift from desktops to laptops and from laptops to smart phones has made this business leveraging, momentous and growth-oriented for the distinctive entities and stake holders.
Open innovation and Co-creation through social media and other Internet channels: – Social media interfaces and internet links like Twitter, blogs, Instagram, g-mail and Facebook is like a lab of experiments for the OTAs and consumers. A number of researches have shown that Social media sites and email marketing play significant role for open innovation and co-creation of travel plans; OTAs borrow the wants of the customers through these channels and design their ideas accordingly ,so that, it could persuade customers to buy their packages. This form of online travel business is more prevalent these days because the degree of flexibility is enhanced.
Summary: – Online Travel industry business is witnessing considerable growth from both business and client side perspective. Whether it is a Supplier, OTAs, Aggregators or other avenues customers are looking for agility, mobility, flexibility, personalization – customization, price comparison and easy real time access to travel related information. Major I.T developments and web tools have made this industry more empowered to grow and sustain and effective coupling with social media would provide an edge to this industry.