On offer: Here's how online travel portals are cashing in on the festive season

On World Tourism Day, we take a look at various offers by online travel aggregators, and how the sector dented by Covid-19 has picked up

By Anubhuti Matta Forbes India Staff

Published: Sep 27, 2022 01:12:03 PM IST

Updated: Sep 27, 2022 03:29:20 PM IST

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With the ongoing holiday season, demand in the travel industry is outpacing supply and online travel aggregators (OTA) are consoling travellers with freebies and discounts, thereby cashing in on the festive season. Illustration: Chaitanya Dinesh Surpur

The festive season has begun, and online travel portals are screaming offers. Despite news of inflation, rise in airfares—due to an increase in prices of aviation turbine fuel—and a recovering economy, online portals are noticing a surge in bookings, suggesting the travel industry is once again spurring economic recovery for the country.

“The revival of the tourism sector has been extremely encouraging,” says Aashish Gupta, consulting CEO of the Federation of Associations in Indian Tourism and Hospitality (Faith). “It can be attributed to a disproportionately higher amount of spend of discretionary income and savings. The good run is expected to continue at least for three years across all sectors, ie hotels, airlines, destinations.”

Cashing in

With the ongoing holiday season, demand in the travel industry is outpacing supply and airfares are on a rise. Prices may not return to pre-Covid levels, but online travel aggregators (OTA) are consoling travellers with freebies and discounts, thereby cashing in on the festive season.

Recently, Airbnb announced a collaboration with cricketer Yuvraj Singh, who became a host by offering his home, Casa Singh, in Goa, for an exclusive one-time stay for a group of six. These guests will have insider access to Singh’s three-bedroom holiday home for Rs 1,212 per night. They will also have a chance to meet Singh virtually and get customised memorabilia signed by him. “With international travel picking pace, we are delighted to offer this unforgettable experience to a global audience,” says Amanpreet Bajaj, general manager, Airbnb, India, Southeast Asia, Hong Kong and Taiwan.

Cleartrip is celebrating The Big Billion Days with Flipkart this year. Users can access attractive offers on international and domestic flights, with fares starting from Rs 6,999 and Rs 999 respectively. Subject to terms and conditions, the OTA is offering free travel for children and infants. They have also launched a no-cost EMI offering by partnering with major banks, and the response has been very strong.

“Travel intent is already over 3x the trend. No-cost EMI has seen great adoption as well. We want to create a movement by playing the role of an enabler and make travel a reality for people who have never thought about taking an international trip or staying at a 3- or 4-star property in India,” says Karthick Prabu D, head of strategy, Cleartrip.

Recognising the need for flexibility and convenience, travel app Ixigo introduced Ixigo Flex, which allows the purchase of a fully flexible domestic airline ticket with no additional payment for rescheduling, apart from the fare difference (if any). The new feature offers one-time rescheduling request that includes change of date, airline and origin/destination—an industry-first option.

“With travel coming back with a vengeance, and the rise of the hybrid work model, there is a demand for even more flexibility when it comes to making changes to travel itineraries without incurring heavy penalties and rescheduling flights in a fully automated manner,” says Rajnish Kumar, co-founder and chief product and technology officer.

Also doing the rounds is the ‘Book Now Pay Later’ (BNPL) scheme offered by OTAs such as MakeMyTrip. This offers flexibility and credit options to customers and is not very different from short-term credit facilities available when buying other products.

However, like with any offer, buyers need to exercise caution, advises Gupta of Faith. For instance, a BNPL scheme is essentially like a credit card: A buyer is deferring payment to a later time. “Any financial product, which encourages spend without an immediate outflow always supports demand. A BNPL may or may not, we’re yet to see that, but checking the rate of interest levied, and what happens to refunds in case of cancellations, are some important questions to ask before buying in,” he says.

Also read: Festive Season Demand: Travel and hospitality sectors hope for a take-off

On a high

While the results of the recently introduced offers are yet to be seen, the sector has received a positive response from customers, thanks to the easing of Covid-induced restrictions, and rise in revenge travel.

Take the last long weekend for instance—Raksha Bandhan, Independence Day, Ganesh Chaturthi—where people opted to make the most of the break. OTA EaseMyTrip rolled out the Travel Carnival Sale during the Independence Day weekend. In 10 days, the company sold tickets worth Rs 300 crore. “With respite from the pandemic, there has been a new zeal within the travel industry, and it is contagious. We are looking at the golden era for our industry,” says Nishant Pitti, CEO and co-founder, EaseMyTrip. The portal saw an uptick by 409 percent in hotel bookings, and 212 percent in flight bookings as compared to the previous year. “We have a higher booking volume month-on-month and continue to be profitable,” he adds.

At Airbnb, searches by international guests for stays in India increased by more than 60 percent in Q12022 compared to the same period in 2021. Also, according to an April 2022 survey conducted along with YouGov, a market research firm, 87 percent of Indians plan to work while traveling or living elsewhere, making long-term stays in offbeat destinations a popular pick among travellers. The portal noticed an increase in bookings for non-urban places by 140 percent in Q22022 compared with the pre-pandemic Q22019. Destinations such as Haldwani in Uttarakhand recorded a growth of about 330 percent in this period, while Jibhi in Himachal Pradesh showed more than 270 percent.

“It is heartening to see that Airbnb guests from around the world are looking to revisit India or explore it for the first time, which bodes well for the sector’s ongoing recovery and for our local community of hosts,” says Bajaj of Airbnb.

According to Prabu D of Cleartrip, the OTA touched pre-Covid levels in June 2022. “In addition to our domestic business, our international business is also growing month-on-month. The festive period this year is expected to be 35 percent stronger than last year owing to the pent-up demand,” he says.

Also read: Taj Mahal is the most-searched-for UNESCO World Heritage Site

For domestic air travel, the recovery is around 90 percent compared to pre-pandemic level, according to industry estimates. “We have similar recovery trends in our business as well,” says Rajesh Magow, CEO, MakeMyTrip. “Consumer sentiment has been quite positive for the past few months and it is likely to continue the same way for the upcoming festive season. What is impacted right now is international travel, due to high fares led by inflation and visa backlog with Europe and the US.”

Ixigo ended FY2022 at 3.4x of pre-Covid revenue. “We have been one of the more frugal and least-funded players in the industry. But we decided to be customer-focussed, served the more resilient tier 2, 3 and 4 traveller market that was impacted less by the pandemic and hence, bounced back faster,” says Kumar. “Considering the increase in leisure travel, increase in the corporate travel activity and MICE [meetings, incentives, conferences, and exhibitions], we definitely expect the momentum to continue.”