Online travel booking sector

MARKETING OF GROUP 2
SERVICES- F

ISHAN GOEL- 180201115 ASHISH BANSAL-180201061

SANCHAY TYAGI- 180201137 TANAY BANSAL- 180201048
ANISHA KANDOI- 180201106 MANISH GOYAL- 180201123
1. INTRODUCTION
Brief history of the Indian Tourism and Hospitality
sector
• A national policy on tourism
was announced in 2002,
• The National Tourism Policy focusing on developing a
was announced in 1982
• The government formulated
1990-2000 robust infrastructure
• Online travel portals & low- 2015 onwards
a comprehensive plan in cost carrier airlines gave a
1988 to promote tourism boost to domestic tourism
.

• The government has undertaken various

• Various states in India marketing initiatives to attract tourists
declared tourism as an • E – tourist visa launched and 1.697 million
industry tourists arrived in India in 2017 through this

Pre 1990 • The government stressed on

privatepublic partnership in
the sector
2000-05
facility.
• Travel and Tourism sector accounted for 8 per
cent of total employment opportunities in India
in 2017.
• Government policies give a • In November 2018, India attained third
fillip to the hotel industry position in world tourism sector after China and
. US.
NATURE AND SCOPE OF STUDY

The complete study revolves around the online travel sector, which was chosen by the group.
The study tells about the nature of the sector, present scenario and various factors significant
for the industry, various drivers of the industry and what could be the future prospects for the
major players. This was mainly based on the secondary data collected through different
sources.

The scope of the study includes understanding the working of the OTA industry, the growth of
the sector and the working of various existing business models in the industry.
2. ENVIRONMENT SCAN
PEST ANALYSIS

Political
1. India has a stable democratic government. This ensures stability for the tourism
industry.
2. The centre has a specific ministry of tourism whose prime purpose is to device plans
and strategies for the welfare of Indian tourism industry.
3. India as a nation is divided into various smaller state and every state has its own
tourism department. These departments often fight with each other in ensuring higher
tourist inflow into their respective states. Though this competitiveness ensures efficiency
in the individual states but is detrimental for overall tourism as a whole. Since India is a
diverse nation with every state having something to offer along with competition what is
really essential is proper coordination between various states.
Economic
1. India is among the fastest growing economies of the world. In the last decade its GDP
has grown with almost 7% per annum. A higher economic growth ensures rise in annual
income hence increase in domestic tourism.
2. A higher economic growth also ensures increase, in investments in the infrastructure,
promotional expenditures, construction of newer tourist avenues, beautification of cities
and towns etc. These ensure a boost to the tourism industry.
3. High growth results in higher number of business visits.
Social- Cultural
1. India a diverse nation with end numbers of different languages, cultures, traditions, cuisines; make it
an ideal destination of cultural tourism. The depth of diversity can be concluded from the fact that India
has more than 22 constitutional languages and 1600 dialects.
2. Indian culture has always emphasized on respecting and entertaining their guests very well. The
Sanskrit Shloka “ATHITHI DEVO BAHVAH” (guest is god) is the essence of Indian tradition. This
warmth and love for their guests has always been appreciated by tourists in general and foreign ones in
particular.
3. India has a vibrant and rich history of cultures that can also attract many culture lovers and scholars
for further studies and exploration.
4. Due to 200 years of British rule English is an integral part of Indian education system. Most of the
people at India can communicate in and understand English. This gives an added advantage to India in
comparison to its neighbouring counterparts in attracting foreign tourist.
Technological
1. At present Information Technology plays a very important role in tour planning and its
implementation. Starting from searching the tourist spots to booking hotels and transportation to
transferring money everywhere web based platforms are used. In the Indian context there are
plenty of such web based portals such as makemytrip.com, yatra.com etc. India being an IT
superpower is capable enough for future development of such avenues in a very cost efficient and
technologically superior way.
2. In spite of India being an IT superpower the overall home pc penetration is still low at just 26%.
This disassociates a very large chunk of domestic users from using such web based portals.
3. For the success of tourism it is essential that a country must be equipped with state of the art
transportation facilities. It must have very efficient transportation system that can help in
transporting both large volume of people and goods in a very cost effective, fast and comfortable
fashion. Thanks to its huge population and late opening up of economy its transportation system
still not of international standard.
Closely Connected Sectors
 Transportation
 Accommodation
 Food and Beverage
 Entertainment (Casino, Adventure Sports, Activities, Shopping)
 Travel Agents
 Financial Services (Travel Insurance, Travel Medical Plans, Currency Conversion)

Administrative Ministry for the Sector

Ministry of Tourism, Govt. of India
Industry Associations
3. PRESENT SCENARIO
INDUSTRY STRUCTURE
• The online travel market in India is estimated at $9.1 Bn - air travel ($5.1 Bn), rail travel ($3.1 Bn)
and hotels (0.8 Bn). (according to a 2014 report by research firm Aranca)
• In India (2013) 9.5% of GDP growth is via the Travel and Tourism Industry, estimating at USD 38
billion in 2014. (IBEF)
INDUSTRY STRUCTURE
• In 2013 Online Travel Industry in India was worth USD 7.3 billion that is an estimated 20% of the
total Travel and Tourism industry earnings in 2013.
MAJOR PLAYERS AND
MARKET SHARE
MakeMyTrip acquired GoIbibo in
an all-stock deal, which was
cleared in January 2017.
Traditionally, MakeMyTrip has
been a strong player in the flight
7% 2%
booking space and GoIbibo has
10% MakeMyTrip been leading the hotel-booking
31%
GoIbibo space. With both joining forces,
IRCTC the merged entity gets a sizeable
Cleartrip chunk of the market at 58%
23% Yatra
Others
27%
CHANGES OVER TIME
(Different business models existing)

Merchant Model: In this model, hotels sell rooms to OTAs in bulk at discounted or
wholesale prices. The OTAs then sell them to customers at a markup price. This is
the most commonly used model, and it benefits both parties.

Ex: Expedia

Agency Model: This is a commission-based model wherein hotels give OTAs

commissions based on business bought. In this model, the hotels list their
services, and the OTAs don’t have to buy anything up front. This is beneficial for
hotels, as it gives them the freedom to price their rooms as per the demand
scenario.
Ex: Booking.com

Advertising business model: TripAdvisor

DEMAND DRIVERS
The growth in the Indian online travel space has been
fuelled by many key drivers. These include the
increase in
 household incomes,
 rise in ecommerce and
 smartphone penetration, and
 the Government’s attempts to ease out on-arrival
visa policies in other countries etc.
BARRIERS
 Low entry barriers to enter the industry ex:
Airbnb become successful overnight
 Low penetration of internet in tier 3 & 4 cities
and in rural areas
 India ranking in fixed broadband is 65th and in
mobile internet it is 111th.
 People have more trust on offline channel.
 OTHER BUSINESS MODEL
• The other business models include players focussing on one unique niche
such as hotel booking, weekend trips, long trip planners, last minute hotel
bookings, adventure trips planners, etc.

• Also, along with them is the thriving transportation industry which majorly
includes cab services like Ola and Uber and map services like Google Maps,
MapmyIndia, etc.

• The another category includes startups like OYO Rooms, Treebo, Airbnb,
Travel Triangle, Expedia, Trivago, TripShelf, DeyorCamps, and more.

BASES OF COMPETITION
The competition is majorly on the basis of price that is offered by the various
OTA’s. Other bases could be promotional offers such as discounts and loyalty
points which are common in this industry.
VARYING STRATEGIES
OTAs are exploring the advertising model and even buying their own marketing channels. A few examples
include
• Expedia’s acquisition of Trivago,
• Travelocity North America and Orbitz Worldwide;
• Priceline’s link with KAYAK; and,
• Chinese OTA CTrip’s share swap deal with Baidu, which owns OTA Qunar, taking control of around 80% of
the Chinese hotel and air ticket market. CTrip also took a stake in Travelfusion, which links low-cost airlines
and hotels with OTAs, booking tools, travel search, and mobile services.
Traffic monetisation with online advertising has become a great commercial opportunity for OTAs, which are
largely dependent on Search Engine Marketing (SEM) and therefore need to optimise costs.
OTAs and metasearch companies are converging – and to a powerful effect. While metasearch companies
move on to assisted booking (metabooking), OTAs are now advertising to customers to increase revenues,
and these huge entities allow customers to search, book and pay all in one place. They have become Online
Travel Retailers (OTR).
CURRENT EMPLOYMENT POTENTIAL
The travel & tourism sector in India accounted for 8 per cent of the total employment opportunities
generated in the country in 2019, providing employment to around 43.3 million people during the same
year. The number is expected to rise by 2 per cent per annum to create 52.3 million jobs by 2028.

SKILL REQUIREMENTS
• It includes creating an online web platform which is user friendly and provides customer with the best
experience.
• Personal selling and B2B selling skills.
• Expertise in the latest technology.
Current Specific bottlenecks/issues infrastructure
 Competition in the Travel industry fuelled by Web Crawling

 Voice technology a digital novelty disrupting the travel and hospitality sector

 Online booking — the service experiencing constant growth so there is lack of infrastructure

RESOURCES

Airlines
Travel Packages
Trains
Transport companies
Hotels
POLICY RELATED
• Schemes like the issuance of visa on arrival to visitors from over 180 countries, the UDAN regional
connectivity rollout, the impetus to digital payments, and the focus on infrastructure, have all given a big
boost to the travel and tourism industry
• In the hotel and tourism sector, 100 per cent FDI is allowed through the automatic route. A five-year tax
holiday has been offered for 2, 3 and 4 star category hotels located around UNESCO World Heritage sites
(except Delhi and Mumbai). Total FDI received by Indian hotel & tourism sector was US$ 12.35 billion
between April 2000 and March 2019.
• The launch of several branding and marketing initiatives by the Government of India such as ‘Incredible
India!’ and ‘Athiti Devo Bhava’ has provided a focused impetus to growth.
• The Indian government has also released a fresh category of visa - the medical visa or M visa, to encourage
medical tourism in the country.
• Incredible India 2.0 campaign was launched in September 2017. In September 2018, the Indian government
launched the ‘Incredible India Mobile App’ to assist the traveller to India and showcase major experiences for
travelling.
• Schemes, such as Swadesh Darshan, PRASHAD, and Adopt a Heritage, are expected to gain momentum
and boost the overall growth in travel sector.
4. FUTURE PROSPECTS
TRENDS, DIRECTION AND GROWTH PROSPECTS
Indian Online Travel Market 2020
 Air travel will reach $30 Bn by 2020 growing at 15%. It continues to be the
dominating category. It will be closely followed by hotels ($13 Bn)
and railways($5 Bn).
 With the increase in smartphone penetration and digital payments usage,
India’s online hotel market will grow to $4 Bn with 31% penetration at a
CAGR of 25%.
 By 2020, one in three hotel rooms will be booked online – a clear
indicator of the growing importance of digital in travel research, planning,
and booking
TECHNOLOGY FORECAST, INNOVATIONS,
GAME-CHANGERS
1. Personalization — the biggest priority among the modern travel
industry trends
2. Recognition Technology — a great potential for the travel industry
3. Robots — helpful machines in the sphere of tourism and hospitality
4. Mobile Applications — the digital trend easiest to implement
5. Chatbots and Artificial Intelligence — the top 2019 digital trends in the
travel industry
6. Augmented and Virtual Reality — mainstream consumer technologies
of the present
 Revenue

No. of Users

Revenue Growth
Topics for future research
• In the areas of consumer behavior‐market segmentation, brand management, e‐marketing‐use of new
technologies.
• Due to the changing nature of the global hotel industry the future research should discuss in more
depth how consumers' decision making processes are changing.
• Another research avenue for consumer behavior studies in tourism marketing is to further analyze the
cross‐cultural differences of the global travel market.
• Future research on tourism needs to identify the changing consumer habits of various segments of the
population from baby boomers to generation Y.
Online travel booking sector
 SERVICE CONCEPT
Core Product – Providing convenience of online booking of tickets for various services such as flights,
trains etc.
Supplementary service
 Enhancing elements
• 24*7 support – They have a 24*7 helpline which is available through various mediums including
phone, email and whatsapp.
• MMT wallet – Make my trip has his own wallet where you can add money and pay from there.
• Chatbot – To increase the quality of their service, they also have a chatbot available on their
website.
• MMT Double black – Once you avail this feature, it provides you free cancellation on flights and
hotels.
• Visa processing
• Blog
 SERVICE CONCEPT
 Facilitating elements

• Global distribution system - A worldwide computerized reservation network used as a single

point of access for reserving airline seats, hotel rooms, rental cars, and other travel related
items by travel agents, online reservation sites, and large corporations.

• Payment gateways – Without the integration of a payment gateway, a customer won’t be able
to pay for the ticket booking.

Delivery Processes – Delivery of almost all services takes place online except the customer
support which is also available online through phone.
 COMPETITORS
• Yatra - Yatra’s brand positioning is that of India’s travel partner. Their major appeal is to
the value conscious people of India which is apparent through their communication.
• Cleartrip – It is positioned as a simple and comprehensive online booking portal. Their
strength is their tie ups with other organizations. In 2017, they got a tie up with google
flights which MMT and yatra don’t have.
• IRCTC - Their major advantage is the trust that some people still have in booking directly
from a government website rather than another third party.
• Individual airline websites - A go-to option for those who are loyalists of a particular
airline. Generally those who are sure about which airline they want to travel from may
choose this method.
• Travel agents and tour operators – Still a preferred choice for many people who prefer
actual physical interaction with their travel agent before booking their flight. Another
factor in their favour is that people are still wary of spending big amount of money online
and as a result they still continue to get customers.
 MARKETING MIX
• Product – The product strategy of OTA’s is to serve all. All of them offer products including flights,
buses, trains, activities, hotels, holidays with Yatra even going to the extent of offering cruise tickets.

• Price – The commission charged by MMT and Cleartrip are almost same whereas Yatra’s
commission charges are a little less. For ticket prices, all operators use dynamic pricing.

• Promotion – Sales promotion are common among all websites. Discounts and Loyalty points are
two of the frequent promotion types. MMT, Cleartrip and Yatra all do digital and tv advertisement
both. While the purpose of digital ads is majorly to get conversions, while tv ads are helping the
companies to become recognized as a brand.

• Place - The place of delivering their service is majorly through e-market for all the OTA’s. MMT also
has 65 offline stores across 50 different cities in India through which they deliver their service.
Process – The ticket booking process is quite simple and easy. You can just log onto their
websites and app and proceed with the booking. The payment can be made by any bank’s card
or most of the available digital wallets.

People –There’s no direct interaction with people unless someone goes to their store or gets in
touch with their customer service.

Physical Evidence – Major chunk of the service is delivered through online website and apps in
which all the companies have invested substantially and are able to deliver a good user
experience. They also have offline retail stores for booking and grievance redressal.

Productivity and Quality – Innovation is the order of the day at Make my Trip. To tackle the
issue of slow internet connectivity in majority of India, MMT launched a Progressive Web App.
This upgrade alone made a first time shopper 3X more likely to convert.
MARKET SEGMENTATION
• On basis of Income – Mid to High segment and Low segment
• On basis of Age – 18-30 years old and Above 30 years
• On basis of travel behaviour – International traveller and Domestic Traveller
• On basis of type of Customer – Businesses and Individuals. Businesses can be further segmented into Corporates and
SME’s.

TARGETING
• Mid to premium segment - Make my trip has made more focus on the premium category of hotels. They have
increased their inventory in the luxury segment. They are targeting specific high end customer segment who are
interested in luxury villas and hotels for their stay.
• Age group above 30 years – MMT is focuses more on this age group whereas Go Ibibo, which they acquired, is
focused more on the younger age group.
• Domestic Travelers - Their major target is domestic travelers since 80% of their booking comes from them. The
competition is very stiff in international sector with competitors such as Booking.com and Expedia taking the lead.
• SME’s - Big corporates usually are covered by travel management companies so they are not mmt’s primary target.
SME’s cant get the services of TMC since they will require minimum amount of travel as a guarantee to be of interest to
TMC.
 Service Design framework
• It is a framework for continuous improvement and innovation. Here is
how MMT designed a more personalised app by using a design
framework
•How to leverage historical
search data to personalise
the service experience
End Goal
•Objective is to show the
right information to the
right user at the right time
•All of these scenarios have
•User segregation so as to
a marketing implication
understand what can be
since
provided to a particular
segment •Users need to be
User •User are dissected on
presented the most
Service relevant information that
Historical these parameter: Searched
will aid in the booking
for a Improvement
search data flight/hotel/rail/visa/cab
process
•MMT comes up with
•Searched with MMT
different card based
before and keeps coming
layouts so as to serve the
back etc
most relevant one.
BRAND ELEMENTS
• Brand elements make up the sensory identity of a brand in the
market place.
Brand Element Description
Brand Name- Make My Trip Easy to remember and adapts to different
communication. Cleary Communicates the core
benefit provided by the service.
Brand Logo Reflects the New brand positioning attracts
attention to the word ‘my’ which signifies the
focus on consumer and personalization.
Tagline – “Dil Toh Roaming Hai” Travel is no longer an annual event in India. The
wants to cater to ambitious travel customers.

Slogan- “Iss bar is foreign trip/ business trip par Often changes depending to the segment
nhi, Make my trip par jaiye” targeted and to communicate new services.
REVENUE MANAGEMENT
Working as third party, MMT has limited control on the inventory and the allocated rooms/contracted hotels form part of a
perishable inventory.
Thus variable demand and fixed supple make revenue management important for online travel industry.
The percentage of commission is maximum incase of airline tickets and least in case of railway tickets.
A portion of revenue comes from e-banners/ advertisements on its website and app.
Avenues of revenue management:
Price- Take into account the historical rates and occupancy levels for a particular Hotel/Flight route and set prices
accordingly.
Demand Management-Since demand varies it is important for the company to understand how badly and individual
customer wants a service. A through study of visitor study followed by personalization strategy will help get the maximum
value out of the customer.
Demand Forecasting- A correct forecast make revenue management significantly easier. Thus the company should have a
dynamic forecasting system that takes into account the current alterations in the marketplace, company’s strategic moves
and historical trends
Service Process

User-Brand Service Information Search

Interface Selection Processing Outcomes

Central
Database

Booking Payment Selection of

Confirmation Gateway User Info Alternative
Major services offered MMT offers flight tickets, rail and bus tickets and
hotel booking services on its portal. The MMT
app was launched in the year 2012. It recently
added new services like visa processing, cab
services and experiences.
Pricing Strategy Due to the price sensitivity of Consumers MMT
follows a low pricing strategy for flight tickets. It
purchases the tickets in bulk from airline for this.
Where as for hotels it is moving towards the
premium segment of customer to earn better
profits.
Communication Strategy MMT is communicating and making people
aware about their product and services through
E banners, television commercials and through
their offline retail stores. The communication
show the different TG’s of MMT from price
conscious customers to luxury/business
travellers.
Distribution Strategy MMT predominantly uses an E-market for the
distribution of its service. It also and a 24 call
service and offline stores for customer grievance
addressing.
BOTTLENECKS IN SERVICE DELIVERY PROCESS
Limited inventory – Although the service is intangible, the inventory of tickets for different services
is perishable.
Limitations of data processing – With the amount of information increasing everyday, the company
will need to increase its capacity regularly.
Limited Bandwidth speed – Many parts of India still suffer from slow internet speeds. This makes
booking online an hassle.
 EMPLOYEE ROLE
INTERNAL
STAKEHOLDERS
01 They are integral and indispensable part
of who MMT is and what the brand
signifies.

BRAND CUSTOMER
AMBASSADOR EMPLOYEE SERVICE PROVIDER
Only physical interface between the ROLE Key in customer experience and service
brand and customer and thus should delivery. This has a huge significance as
convey the brand essence to the customer service is the core value of
customer. MMT.

03 02
DEMAND
• Google India – BCG Report:
• Projected – overall Indian travel market to reach $48
Bn by 2020 at a CAGR of 11%-11.5%.
• India Brand Equity Foundation Report:
• Online Travel Market – est. 40% to 50% of total
transactions by 2020.
SUPPLY
• MMT leads – narrowing its losses.
• ~3 more years to achieve enough market power as in established countries.
• Largest online seller of international outbound airfare by the number of transactions.
• Has two-thirds of domestic air tickets sold online.
• Has about half of online travel agency sales of hotels, the industry’s product with the richest
commissions.
• Foreign Visitors to India – prefer booking.com
• Most sales domestic.
• ~80% of air tickets for intra-India routes.
• 3 out of 4 are domestic hotel bookings
• ~60% of vacation package revenue – from domestic travel.
500 million • Have Internet
access
Indians (IAMAI)

150 million • Economically well off to

travel long distance for
Indians leisure

• Have transacted with

35 million MMT Group brands
DEMAND MANAGEMENT
• Bulk purchases of airline tickets.
• Dynamic pricing
• Use of cookies.
• International packages at affordable prices.
CURRENT MARKETING STRATEGIES
• Getting the Ad Ons –
• Related to traveling, hotel booking, modes of transportation, etc.
• Advantages like free coupons, optimum cash back offers and much more.
• Keeping abreast of market trends –
• advertisements of their services, funny and more related to the aspects a common man
• including different religions
• In depth customer study –
• Gauge the targeted customers

• Dil toh roaming hai

• Objective - Strengthen the brand’s connect amongst existing travellers and drive its adoption
among new consumers.
• Fuels the growing travel ambition of customers at large.
• showcases how each one of us has a wandering heart with many latent travel desires.
• seeks to inspire consumers to give wings to their growing travel ambition.