Updated below
In an interesting twist of fate, Online Travel Agent TravelGuru has outsourced its entire Flight booking section to meta search Ixigo.com. This effectively means that the core of TravelGuru business is now an acquisition that they had made last year – hotel booking site Desiya.com. TravelGuru had raised, in all, $25 million in investment from Sequoia Capital and Battery Ventures, and is a part of Times of India’s Private Treaties portfolio. TravelGuru had reportedly acquired Desiya for around Rs. 100 crores, around $25 Million at the time.
Difference In Approach to Zero Percent Commissions
This deal with Ixigo also highlights two different approaches to the unfolding situation in the travel industry, around Zero percent commissions. At one end, you have other OTAs like Cleartrip who have included booking fees, and at the other, you TravelGuru which has tied up with a meta searches like Ixigo, for a revenue share. Zoomtra, from the Smile Interactive Group, is another meta search.
Aloke Bajpai, CEO of Ixigo, told MediaNama that they will be sharing revenue with TravelGuru on flight bookings and advertisements. Ixigo showcases ads on the search results page and also receives incentives from Advertisers – they are not a travel agent, but received performance based incentives from airlines, from their marketing budget. Bajpai feels that agents will become more expensive than airline travel sites going forward.
Update: TravelGuru appears to have taken offence to the suggestion that they’re naught but Desiya. A response:
“Travelguru believes in offering the best prices to our customers. Given a zero commission scenario for flights we had a choice – either mark up fares or go the metasearch way. We have an unwavering commitment to low fares and hence felt our customers’ interest is best served by not marking up fares. Hence, the decision to work with Ixigo.
We would also like to clarify that we have several lines of business – B2C domestic hotels & holidays, B2C international holidays, corporate travel and retail. Desiya is our B2B arm and an important contributor to the Travelguru business, but clearly not the only contributor as your report suggests.”
Related:
– Ixigo Powers NDTVtravels.com; Aloke Bajpai On Monetization & OTA Relationships
– Cleartrip Launches Train Booking; Service Fee; 10-20% Topline Contribution
– Yatra Launches In US, UK; Impact Of Zero Percent Commissions
This website uses IntenseDebate comments, but they are not currently loaded because either your browser doesn't support JavaScript, or they didn't load fast enough.
5 Comments until now.
Actually, they might well be shooting themselves in the foot. Or maybe they don’t understand where their future lies.
Dynamic packaging is the fastest growing part of online travel today. Packaging happens when technology allows customers to book different travel components through a *single* search and booking path. For instance, one search to book flights and hotels in a single go.
Having killed their flights business implies that they’ve killed their technology in that area. This will only come back to bite them in the future and should go down in India’s Internet history as one of the most shortsighted moves ever made.
Dynamic Packaging hasnt really taken off even in mature markets.
As for India, packages account for less than 0.5% of total travel related transactions.
Hope looking too far into the future doesn’t affect ur present.. Ask CITI….
Think it as one of the smartest moves ever by transferring an inherently loss making business into a profitable one.
As posted by reality check, the numbers are surprisingly true and there’s a clear disconnect between Online Hotel and Flight bookers.
Regarding packages, people still prefer their regular Brick and Mortar agents.
Let’s see who has the last laugh in the Indian OTA space.. They’ll be the one around after an year and half. Any predictions Nostradamus???
Flights booking commission have waffer thin margins, is a high volume business. The money is in booking room nights and customised holiday packages
[...] mentioned earlier about how OTAs are dealing with this situation differently – while Cleartrip had started charging a booking fee, Travelguru outsourced its search to Meta [...]