Travel agencies increasingly tieing up with OTAs for survival

OTAs step up offline push through franchising model & branch offices to boost revenue

Travel News
Travel News

Travel companies have been tying up with bigger online travel agencies over the past few years & sell inventory from the OTAs. Online travel companies such as Cleartrip Travel Services Pvt. Ltd and Expedia India are also targetting to reach to a wider customer base by tieing up with smaller agents & also exploring other routes to reach out to the offline customer base.

The online travel industry has been coping with narrowing commissions from its biggest revenue generator, air ticketing, since last year. The model is less expensive than setting up a franchise from the ground up. Cleartrip has more than 2,000 such legacy travel agents using its inventory and accessing the full range of products. “We started a year back and every month we see 10 to 15 travel agents getting on to our network,” said Noel Swain, executive vice-president, supplier relations, Cleartrip.

Expedia India, which set up a travel agent channel a year after it entered the local market in 2008, plans to expand the model aggressively in order to increase business from tier 2 and tier 3 cities as per a report in Mint by Moulishree Srivastava.

“When we started out in India, the low hanging fruit were online and more evolved consumers. But to expand and reach a wider customer base and tap the cash economy, we have to reach travel agents directly,” said Manmeet Alhuwalia, marketing head, Expedia India.

“This year we have a huge focus on our travel agents’ channel and signing up travel agents.” The company is working with two partners that help it sign up travel agents; one of them was hired earlier this. The company did not disclose the number of travel agents it’s working with, but Alhuwalia said the channel contributes around 10-15% of revenue in India. Alhuwalia said the avenue allows the company to “reach out to wider distribution, especially in tier 2 and tier 3 cities, to the customers who either don’t have credit cards or access to the internet.”

Online travel agencies are also looking at expanding their offline presence through franchises to gain a greater share of the overseas holiday market that remains largely dependent on traditional bricks and mortar agents. With margins narrowing for air travel, online agencies are shifting to segments such as hotels and holidays to take advantage of an increasing number of Indians going abroad for leisure.

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