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.”
— 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