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Yatra Launches In US, UK; Impact Of Zero Percent Commissions

Online Travel Agent Yatra.com has launched operations in the US and UK, reports DNA. The company has adopted a B2B model in the UK, while the US model remains B2C, like in India. So, while the US site is live (here), there’s no separate site for the UK. The company is directly approaching agents in the UK, and asking them to use the site for their India bookings.

Note: Don’t go by the numbers given in the story, according to which Yatra currently has revenues of Rs. 1500 crores, and is targeting $220 million by the end of 2009-10. Rs. 1500 crores is around $340 million, so there’s obviously some mistake.

The Impact Of 0% Travel Commissions
The most significant development in the online travel business in India over the past few months has been the cut in the commissions on sale of air tickets. Commissions are expected to go down to 0% (zero percent) from October this year. Take a look at this report. India (Airlines), Jet Airways and Kingfisher have deferred this by a month to November. If implemented, this means that all travel agents will earn nothing from the airlines for ticketing. The impact:

— A further increase in ticket prices if the OTAs start charging a service fee. This may work out, since airline sites will list the same tickets without that fee, and meta search engines will also index them.
— A change in the business model – more packages will be pushed, and hotel booking will become an important source of revenue
— Decline on airline ticketing advertising – to some extent, that has already happened, and it’s had a trickle down effect on related services – agencies, ad networks and publishers. Travel and Finance were the two largest advertisers online.t

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