Travel portals cash in on hotel boom
01/09/2007|4:48:00 PM|Indiatimes
NEW DELHI: Travel portals are cashing in on the booming demand for hotel rooms. There has been a surge in hotel booking on travel portals in the past 12 months. About a year ago, 90% of the business for travel portals came from air ticket sales.

While the number of air ticket bookings have gone up, the travel portals have seen a significant growth in hotel booking on their sites. Hotel bookings on travel portals is up from 10% of total transactions to 25% in the last 12 months.

To meet the increasing demand for rooms, travel portals are adding more hotel rooms to their live inventory by tying up with hotels. For instance, will be adding around 50-60 domestic hotels every month to its existing inventory of 1,000 domestic hotels.
Also by the first quarter of 2007, the portal will be adding around 15,000 international properties by entering into tie-ups with hotel chains like Hilton, Radisson and Le Meridien.

Travel portals have witnessed an increase in the number of hotel bookings vis-a-vis airline tickets, though majority of transactions are still for airline tickets. Of the total of 10,000 transactions that registers in any given week, 25% were for hotels in 2006 as compared to 10% in 2005.

Travelguru, an online travel portal, registers around 2,000 transactions daily. In January last year, 90% of transactions registered on the portal were for airline tickets and only 10% for hotel room bookings. Hotel room bookings now contribute to around 25% of transactions.

“Hotels is the fastest growing segment for online travel portals. As the market is fragmented, by offering attractive price and variety the websites are trying to capture the market,” says Ashwin Damera, CEO, Travelguru. Travelguru has tied up with 2,500 domestic hotels and 70,000 international properties such as Oberoi’s, Leela and Starwood. It will be soon tying up with the Taj Group of hotels as well. which currently caters to the domestic market only, has 1,200 hotels in its inventory. While 3,000 room nights were booked on the website in October, the number rose to 5,000 in November. “We are looking at increasing our hotel inventory as the demand is increasing. We also have a rating plan for hotels in the pipeline,” says Dhruv Shringi, co-founder,

Hotels are also getting substantial business from the travel portals. Sarovar hotels has a tie-up with various websites such as, travelguru, and Around 20-25 rooms every day at its properties are booked via travel portals.

“The share of travel portals is almost doubling each year. We have pre-purchase deals with these websites which enables customers to get hotel rooms at a competitive price,” says Pradeep Kalra, vice president, sales and marketing, Sarovar Hotels. Sarovar hotels has brands such as Park Plaza and Sarovar Premiere in the deluxe category, Park Inn and Sarovar Portico in mid market category and Hometel in budget category.

Majority of online bookings for hotels are for the mid market segment and budget category as against deluxe category. “Mid market and budget hotels are a natural fit for travel portals just like low cost carriers,” says Mr Kalra.

“Future of the travel portals will be driven by hotels and infrastructure,” says Prashant Muttoo, general manager, travel e-commerce, Online travel industry is a $800-million industry in India, that is, about 14% of the entire travel industry.