Published: 26 Nov 2008: Travelocity is about to complete its first year of operations in India. Significantly, contrary to the approach of some of the domestic OTAs in India, Travelocity is solely focused on a pure online model, operating with wafer thin fixed cost structures (with team comprising eight employees as of date).
From product mix perspective, after starting with a hotels only site, the company has expanded its offerings gradually.
"Subsequently post taking to market our full suite of travel products in January this year, we were the first to focus on international flights and have had great successes in building that category online. Recently, we have been focusing on pushing our dynamic packaging solution, and launched an exclusive weekend packages promotion online with Singapore Tourism Board. These initiatives have ensured development of the online category beyond domestic flights," said Travelocity India´s MD Himanshu Singh.
"We have worked on building a strong foundation for a long term business in India. Our local content aggregation efforts have seen great success, our B2C business has grown very well across all product categories with a healthy outbound vs domestic mix. We are witnessing high double digit growths month on month, and September was a record month in terms of sales. Our approach has been to build business steadily with a close eye on the bottom line and adopting a high ROI driven approach to marketing spends," said Singh.
From the industry´s perspective, last year around the same time, the issue of for how long all OTAs would sustain their run especially in the `dog-eat-dog´ game was talked about.
For his part, Singh believes that consolidation will happen.
"And the current economic scenario may well be a major factor in that," he said.
With the changing business environment (commission issue between airlines and agents in India) and how it is going to impact the OTA business in near future, Singh said, "I can´t speak for others but we do work in zero commission regimes in some parts of the world. So we are familiar with the situation. It is difficult to predict how the industry will react, especially in the current scenario. As far as Travelocity is concerned we are not totally dependent on just domestic air bookings. Our product offerings include international air and international hotel that has been our mainstay since our launch last December. In addition, we offer domestic air, domestic hotel and dynamic packaging, the last being a unique offering for Indian consumers."
"The other strategy we have is to extend our revenue streams on the B2B front. We built a good footprint in the white labeling play and have are also launching our branded affiliate programme that will make Travelocity inventory immediately available to travel agents in smaller towns and cities," he said.
