Over last few years, about 20 per cent of all travel agents have shut shop in the country, statistics of the International Air Transport Association (IATA), which has around 3,000 members in India, revealed.

Globally, too, the numbers have fallen significantly. IATA membership figure in the UK has fallen from 6,000 to 3,000 in the last one decade.

Last week, Lalit Sheth, chairman of Raj Travels, jumped to his death from the Bandra-Worli Sea Link last week, due to accumulated debt. Almost four weeks before his death, Lalit Sheth had approached a leading travel company to sell Raj Travels. It was not the first time he was trying to sell the company. 

While it is considered as the beginning of the end for the traditional offline travel agents, there is no doubt that challenges for the sector have multiplied. Online travel companies are leaving the offline agents with few options. However, that alone is not reason enough to close down the offline travel shops. Desperate to rope in customers, the offline agents often burn themselves by providing excessive discounts and personalised services, experts say.

Arjun Sharma, managing director of Le Passage to India, explains: “Top line is vanity, bottom line is reality. Companies need to devise their strategies more practically in terms of costing to survive in this market.” Economic slowdown has not made things any easier for the travel industry as a whole, but particularly for the smaller or regional players, many of whom have been looking for a buy-out. Sharma’s travel company itself is witnessing around five to six such sale offers annually for the past couple of years.

“Every year, in our IATA conventions, we discuss how we need to improve our yields and bring some discipline into the industry. Several offline players have diversified into totally different businesses, because they could not keep up with the changing times,” said Ajay Prakash, president of the Travel Agents Federation of India(TAFI).

The ticketing business has drastically shifted towards the online platform. The Internet and Mobile Association of India (IAMAI) has found in a study that online bookings of train and air-tickets grew 36 per cent in June, compared to last year. While 5.83 million bookings were registered in June 2012, compared to 4.30 million in June 2011, airlines witnessed 1.45 million online bookings in June against 1.07 million in the corresponding period last year, according to IAMAI data.

In view of reducing margins in the ticketing business, smaller agents who do not enjoy economies of scale and do not offer any specialised services are finding it hard to survive. “Companies who have been tech-savvy and constantly adapted to changing times have survived,” said Prakash.

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