Online travel going places, but at cautious pace

Online travel is back in vogue after the late 90's dot com bust, but travel agencies are treading with caution as there is not enough room for too many players. "Online travel market in India is around 700 to 750 million dollar, of which online travel agencies (OTAs) have around 30 to 35 per cent of it. This is just tip of the iceberg," said Yatra Online Private Limited co-founder Dhruv Shringi said.

But he tempered the optimism, saying the field has become very competitive and only four to five OTAs were likely to earn profits from this business. "It will be very difficult for the new entrants." While very few travel portals like Traveljini.Com survived the 1990's crash, the last couple of years has seen more start-up OTAs entering the space.

In fact, market players today feel that the shakeout was more due to lack of penetration of credit cards, high-speed connectivity, even as they look at the OTA concept as ahead of its times. "In 1990s, the situation was much different. There was not enough money to invest in the business, venture capital backing was not available either. Besides, management team has changed, well travelled people with experience of working abroad are coming into the sector," Travelguru founder and CEO Ashwin Damera said.

This time around, OTAs are betting big on India's comfortably-off middle-class, which is estimated to grow to 400 million by 2009, with surplus income - a considerable amount of which the industry hopes would be spent on travel.


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