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How technology has changed the way people travel

With all the information just a click away, people are increasingly moving online to book their vacations, creating a new wave of entrepreneurs catering to them

Paramita Chatterjee
Published: Mar 31, 2017 03:11:36 PM IST
Updated: Mar 31, 2017 03:31:20 PM IST

How technology has changed the way people travel
Image: Shutterstock

It’s better to travel well than to arrive. Ask travel buff Prathima Shankaran, a 40-year-old investment banker, for whom taking a holiday a few years ago would have entailed a visit to the local travel agent. “There was a time when I would make multiple phone calls to zero in on a travel agent in search of that perfect holiday destination.” Perfect then would mean ticking off certain important countries on the global map, visiting a few museums, gorging on some Indian food and indulging in some curio shopping.

Today, the contours of travelling have changed for the average Indian globetrotter who is spoilt for choice in terms of travel information available online, thanks to the breakthrough in technology and high-speed internet. Shankaran recently took a 14-day trip to Iceland with her corporate lawyer husband and six-year-old daughter to discover a place that is off-the-beaten tourist track. “This was the first trip where we did everything from scratch. Although we were a bit sceptical in the beginning, we booked our flight tickets and hotels online without the help of a travel agent and it was way cheaper,” says Shankaran. “Also, we did everything at our own pace and were not bound by any itinerary given by a travel agent.”

Shankaran is not the only one. With all the information and recommendations available at a click today, people are increasingly moving online to seal their vacation plans. After all, technology does provide a much finer, smoother and quicker travel booking experience as compared to traditional travel agents.

As per a study jointly conducted by consultancy firm KPMG and Confederation of Indian Industry, the online travel segment comprises about 61 percent of the total ecommerce industry in the country that currently stands at over $27.5 billion. Simultaneously, another set of data available with travel planning and search engine Ixigo suggests that going forward - by 2020 - India is poised to become the third-largest online travel market in the world, registering an annual growth of 10.5-11 percent. Currently, India is the ninth biggest travel market in the world.

Bridging the Divide

The online travel market in India is highly fragmented. There is a significant opportunity to close the loops between inspiration, research, planning and booking and unifying the various points of sale - which in turn are throwing up significant opportunity for entrepreneurs to ride the online consumption wave.

Take for instance, Deep Kalra, founder and group CEO at MakeMyTrip, who late last year made headlines for the merger of his homegrown online travel biggie with smaller rival Ibibo Group. Kalra launched MakeMyTrip in a nondescript Okhla building way back in 2000 even before the dotcom bust had engulfed India. Back then, his business model mainly focussed on facilitating travel plans for non-resident Indians wanting to visit India. Having been one of the few survivors of the dotcom bubble, Kalra transformed his business model to keep pace with the changing landscape of the travel industry.

“Lots happened after I launched MakeMyTrip. In the early years itself, I saw the dotcom bubble that taught us innovation is key. And more recently, with the advent of technology and the entry of several startups, we have seen the industry go through a sea change,” says Kalra, reminiscing the joys and the tribulations of his entrepreneurial journey sitting in his swank Gurugram office.

Sixteen years on, MakeMyTrip is a full-fledged travel company and its services include flight tickets, domestic and international holiday packages, hotel reservations, rail and bus tickets, among others. The recent merger with Ibibo will not only give it a majority control in the travel sector, but will also strengthen its position in the market that has just begun to open up.

In September 2015, Kalra forayed into alternate accommodation through a new entity under the MakeMyTrip umbrella called Rightstay, which has more than 10,000 registered properties, including guesthouses and villas across the country.

The shift in focus from luxury hotels to budget hotels and homestays over the recent years has opened several avenues for entrepreneurs in the hospitality industry. Consider this: When Amit Shekhar, a 32-year-old businessman took off on a solo trip to Goa in June last year, he chose a homestay for his three-day sojourn that allowed him to soak in the local culture and tradition. “Since I knew I would not spend much time in the hotel room, I opted for a homestay run by a Goan family over a five-star property.”

Unlike earlier times, travellers today are better informed, more adventurous and connected through internet on tablets and mobile phones.

Home Away from Home
In the whole new segment of branded budget chains, several startups have mushroomed over the past few years such as Oyo, FabHotels, Treebo, Wudstay - all spurred after the global success of Airbnb.

“Unlike others sectors, travel offers a readymade market where the consumer base is already there,” says Sidharth Gupta, co-founder of digital hotel chain Treebo Hotels, which is priced at an average of Rs 1,000-3,000 per room per night. Gupta, who gave up a plush corporate job in his early 30s to take a plunge in entrepreneurship in 2015, drew his inspiration to launch a budget hotel from his childhood experiences. “I remember staying in a lot of budget hotels as a child with my parents and the facilities then were not great. I wanted to change that perception,” he says.

Of about 1.25 million hotel rooms in India, 70 percent comprises budget hotels. In addition to this, there are homestays and lodges.

Prafulla Mathur, founder and CEO at Wudstay, says: “There is a large vacuum in terms of quality accommodation for economical prices that need to be filled up in India. With the emergence of budget hotels, the focus is now also shifting on hostels and PG accommodations across the country.”

Travel by Tech
With the tourism industry in India growing at 10-12 percent year-on-year, budding entrepreneurs are constantly sniffing out new business opportunities across diverse travel categories and peripheral businesses. Sample this: Between 2011 and 2015 alone, the number of online travel startups has grown manifold from around 50-odd to over 250, as per data available with Ixigo.

“Different travel market segments have been using different methods to encash on the current boom we see in the travel industry,” says Aloke Bajpai, CEO & co-founder at Ixigo that connects travellers with content and deals from online and offline travel, transportation and hospitality businesses. “In today’s busy life, people ensure that they take out time to travel, not just because they need a break but also to get to explore what’s new and unseen. Also, the impact of social media has made travel stand out as a unique experience worth sharing and bragging about,” adds Bajpai, an alumni of IIT Kanpur and INSEAD, who founded the travel company in 2007 in Gurugram along with his IIT friend and batchmate Rajnish Kumar.

“Historically, when the per capita GDP of a country exceeds $1500, there is an uptick in the number of people who travel,” says Michael Lyngdoh, co-founder at Tripoto, a travel community and travel search engine portal established in 2013.

India is at an inflection point. This gives a huge opportunity for companies in every distribution point - travel planning, hotel and homestays and experiential travel services. Says Amitabh Misra, founder & CEO at GoFro, an online marketplace platform for travel: “Travel technology has undergone a metamorphosis since the late 1990s. First, it was all about simplifying ticket booking experience online. Then, there was content aggregation that benefited consumers. Now, we are in the third phase where we see technology is connecting businesses with consumers directly.” 

The transportation industry too – be it airlines, buses or cabs - is trying to monetise from various ancillary services as entrepreneurs brace up to engage travellers throughout their travel cycle - from pre to post trip. “The bus industry is currently cashing in through collaboration with planning and booking service providers, who in turn are also embracing changes to provide customers with more evolved features and facilities,” says Aurvind Lama, CEO and co-founder at Travelyaari, an online bus booking platform which leverages technology solutions to simplify and streamline bus ticketing processes.

So, all in all, ‘all inclusive’ is set to become the latest trend. As people look for trips that take care of all aspects of their travel, which are both tailormade and customised just enough to meet all their travel needs, entrepreneurs foresee an opportunity to cater for this big, impending growth. However, as the saying goes, the proof of the pudding is in the eating. So, the ones who survive and go to the next levels are the ones who will make it big.

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