Online travel agent Cleartrip has added pay@hotel feature that will allow its users to make payments at the hotel rather than doing it online. The company wrote in a blog post that users are often dissuaded from making bookings online for hotels in India because of the lack of branded chain hotels. Due to this, users don’t know what the actual experience at the hotel will be like and the company wants to change this mindset with this offering.
The company states that the service will be available for over 200,000 hotels in 40,000 cities around the world at launch. It covers most five star hotels, but Taj hotels are not part of it yet from what we have seen. Hotels that are part of the new offering have a pay@hotel badge next to their name in the search results and it is also possible to filter results based on it. When you make a pay@hotel booking, Cleartrip will call you a few days in advance and confirm the booking with you, at which point you can cancel it without paying cancellation fee. The company had redesigned its hotel booking section earlier this year to improve load times and UI.
The feature reminds one of the cash on delivery feature that helped e-commerce companies get more people to buy online. It needs to be seen what percentage of its users start using this feature and the effect it’ll have on hotels. It is not clear how Cleartrip will make a commission from the booking if the user makes payment offline either. Will Cleartrip get a referral fee now on?
Hrush Bhatt, Co-Founder, and Director, Product and Strategy, at Cleartrip told Medianama last year that margin on hotels is roughly doubly of airline tickets and added that the company is the second biggest player in hotel booking market after MakeMyTrip. The company had also launched a last minute hotel booking service, Quickeys in mid-2012.
It needs to be noted that MakeMyTrip’s hotels and packages business grew significantly in the last quarter, registering a 43.4% YoY increase in net revenues to $7.08 million for the quarter, up from $4.9 million in the same quarter last year. Net revenue margins increased to 12.9% from 12.5% a year ago. MakeMyTrip attributed this increase to the growth of its international hotel bookings facilitated by its acquisition of Hotel Travel Group in November 2012.
Also read: Why cash is still king in India