Bets non air biz at Recession shocks of 2008 Market Improves80% by ’12. 26/11 attack Increased ad spendsClaims largest busticketing inventory Trends that prevail |Non air revenue streams | bus travel | train travel l ad revenues | |alternative payment cash cards | Lost by MMT to the Tatas Launched in India Travelocity bought Launches franchise out Travelguru model for expansion Allows for renting homes on holidays Ties up with Dish TV for DTH distribution Started to target wedding solutions Ties up with Airtel for DTH distribution Launches Official Hatyachaar marketing campaign Chalbalchal.com enters travel search Launches bidding website for travel Launched by Kingfisher, Introduces chatbots for Spicejet & Indigo rail travel bookings Duniyadekho.com hindi travel portal
All in all 2009 wasn’t the best year for OTA’sAll in all 2009 wasn’t the best to get out of the global they tried as they tried their best year for OTA’s astheir best to getand ventured into newer non and ventured into slump out of the global slump airnewer non air businesses. In 2010 OTAs are 2010 businesses. As we look forward towards moving beyond justticketing sites and are looking at delivering holistic value be it OTA’s would have to move beyond justplanning travel or holidays look itsdelivering wholistic ticketing sites and for at users or even more. value be it planning travel or holidays for its users or even more.
OTA’s increasing influenceTop mobile internet usage stats Internet penetration under 35 years of age Target segments Market MMT can take a Size bigger share of the growing market by keeping sight of 77 % of online shoppers use reviews & ratings for purchase decision trends on mobile 86 % of respondents prefer a friends / user recommendation over a internet, consumer critics/ experts review behavior, consumer High 63 % of all WOM is positive generated media margin and usage statistics 84% of online buyers have bought travel online segments Communications Content Commerce Search2010 segment snapshot Increase in share of consumer40 million internet subscribers generated media20 million broadband Communications Content Commerce Search198 million debit+credit cards584 million wireless subscribers Skew in the Time Spent on the Webs 4 key activities
Internet penetration is growingSearch and social networking is big in mobile internetTarget segment is showing growthMore consumers are moving towards OTAsBUT, why aren’t OTAs using consumer generated content togrow and differentiate?OPPORTUNITY SPOT
Preference for buying airline tickets Top visited sites (million) OTAs are majorly used as research, comparison and information gathering tools by online travellers It is observed that travellers tend to speak to the hotel desk or travel agent directly for cross-checking offline rates before booking hotels OTA’s serve dual purpose of booking as well as verificationPrimary researchPrincipal segment buying air tickets – 24 to 35First website they go to – MakeMyTrip.com (96%) MMT needs toWhat they find missing in OTA’s ? leverage on its Promotions, discounts, deals etc. are the clear preferences forPersonalized recommendations/itineraries, real time chat lead in market online travel bookingsSuggestions based on interests, last mile connectivity, share and the high brandCheaper fares than supplier websites, Forex/visa agents recall that itPlaces that they go to for accomodation? has by givingHotels.com, tripadvisor, Lonely Planet, Internet search, consumer anCompany tieups, OTAs for co-ordinates experienceWhat do you use OTAs for other than airline booking? he/she hasn’tHoliday packages with pre-fixed budgets, hotels, ratings had before as& reviews, understanding choices for travel well as notOther use of Internet for booking? provided byMovies, Plays, bus tickets, train tickets, concerts, hotels other OTAs
Price is numero uno in consumer mindFrame of doubt existing in consumer’s mind if he or she isgetting the best deal is pushing consumer to search moreTrust tops the chart in consumer’s mind to make a purchasedecision and the consumer builds trust by COMPARISIONHow does one combine best price, eliminate doubt and buildtrust?That’s the magic formula for CONVERSION
Finding low fares Security Ease of use Booking ﬂexibility Sorting options Speed of the website Useful and relevant content Ability to book all travel services in one transaction Design and presentation of the website Online railway bookings is becoming the preferred segment in online travel Emergence of corporate travel packages Growing Trend for “niche Tourism” Among Young People(rural tourism, medical tourism, sports tourism, gay tourism and wedding tourism) Rising international travel OTAs looking for offline counters leveraging on their brand value Emerging travel information portals backed by OTAs OTAs serving as a preferred search tool for checking fares and ticket availability Hotels are preferring International OTAs Growth coming primarily from Low cost carriers exclusive travel concierge, Offers like getting one Single search option Consumers can book exclusive offers on car 9 airlines sell cheap nights stay free while provides users with train journeys with no service rentals e.g. Yatra Barclay tickets on their own sites booking for one night fares, schedules and charge Card availability simultaneously 12 Indian travel sitesDiscounts for consumers Cars can be rented for self Discount offers and cash compare cheapest tickets staying more than one Registered users can save driven or chauffeur driven back in collaboration with availability day on remaining days their searches Eg. Ezeego, Arzoo the Banks
OTAs are chasing everything to differentiate and woo consumerVery little opportunity on flight prices as they come fromcommon GDS sourceOTAs are converging towards offering solutions for all modes oftravel, BUT in SILOSOne bad experience, OTA loses the customer forever to acompetitor OTASolution to stay on TOP?Deliver a new experience to consumer that exceedspreconceived expectations of consumer and not offered bycompetitor
Low investments required in High infrastructure Price and non Medium/ price competition Moderate Discounts High Low switching related to High costs. No Collective volume bargaining power Creating community to drive loyalty Sophisticated Loyalty schemes Improvements in targeting of marketing initiatives High By initiating tie up with corporate houses and providing customized services for travel/hotel Many providers bookings Small and Big Price Lowest in the OTA ClearTrip industry TravelGuru EzeeGo1 Place YatraProposition Offline Online Travelocity Value for Product iXigo money Mobileheld End to end consumer MakeMyTrip is perceived as driven different from the other sites choices MakeMyTrip Packaging Promotion Dynamic Discounts Customized Best deals Incentives Convenience
Now that we know where MakeMyTrip.com is positioned withrespect to its competitors, it’s time to go back to the consumersegments to propose our solution
Mostly Business class traveler Mostly domestic travelers Both holiday trips and business travels International and domestic flier Advance booking of tickets Mostly domestic flightsAdvance and last minute booking Extensive web search Last minute booking of tickets Less extensive web search No preference for any airline Minimal web search Preference for premium airlines Less importance to travel No airline preference Travel duration very important duration and time Travel duration very important First class traveler Economic class travelers Economic class travelers Medium Price sensitivity High price sensitivity Zero price sensitivityAssociated with corporate houses Internet hours : 2 to 10 hours Internet hours : >10 hours Internet hours : All ranges Annual income < 5 lacs Annual income >10 lacs Annual income: All ranges Single/Married/with kids Married/with kids Mostly single Age groups less than 30 Age groups more than 30 Age groups less than 30 Low cost airlines All kinds of airlines All kinds of airlines
Connect the Dots – Merge the divideA holiday from Hyderabad to Sri Lanka value chain (tickets to Sri lanka are cheaper from Chennai) CurrentMakeMyTrip Solution
Uses data from MMT and goes to parent website to book Chennai – Colombo flight to avoid service chargesWhat theConsumer does? Goes to redbus.in or irctc.com to book a bus/train from hyderabad to chennai Calls DotCabs for a rate of 250 Rs to reach the bus station Consumer is able to reach Colombo at Rs 4743 Vs Rs 8836 (proposed by MakeMyTrip) MakeMyTrip loses out on conversion despite providing Air, Bus , Train and Cab solutions MakeMyTrip positioning of lowest prices and best deals takes a hit in the consumer’s mind
1 Experience Value for Money Make the consumer choose Experience Vs Value (Economic traveler identified by Value choice) 2 Seek start position e.g ISB, GachiBowli Seek end position Kandy, Sri Lanka 3 Integrate travel solutions and build trip schedule in the order of connectivity and cost priority Chennai Flight Colombo MMT Captures What Bus/Train/flight entire valueMakeMyTrip Hyderabad Chennai Choice + options chainshould do? ISB, Gachibowli Hyderabad bus station/train station Cab Providers /airport depending on previous choice Net Sum Price
Integrating search solutions is a great start to improve conversion and visitation We have attacked the best price problemHotel bookings will follow suit once consumers perceive MMT to be churning out the best price and options Now how do we attack “eliminate doubt” and “build trust”?
Bring in the consumer to the value proposition Two way business model is missing with the consumer Consumer is forced to make choices from existing options ? Bring the consumer as part of the value chain to promote end to end value based journey booking The concept is based on location based services driven by user based content influencing other users to take a particular service. User is incentivized to provide content through the form of discount vouchers or free accommodation stays
Local TransportSource Destination Accomodation Fully tapped segment – MMT Airline Online booking transactions Growing segment – Not fully tapped Holiday/Air travel value chain Experiences Open Itineraries
For the consumer, By the consumer, To the consumer
Rich media content of places visited Supplier contacts for transport New hotel suppliers/Budget acco Local Experiences Local transport information Drivers for consumer generated Content MMT mobile solution Serviceable “Propose” option between any two nodes in the itinerary built by MMT (or) GPSServiceable Vs Informative Informative“Informative” info gets built into MMT itinerary but not charged“Serviceable” info signifies a MMT tie up and hence charged. Check In Consumer activates information “check in” to the MakeMytrip system under appropriate category Validation MMT validates the entered data and passes/blocks the data entered Go Live Validated data goes live. Consumer getS a next trip discount/check in points redeemable against next booking
Case in point – Source : Chennai Destination : Bangalore Budget Traveller User User User Best Fares contributed contributed contributed for Flights transport hotel experiences choices suppliers Kingfisher Cab from B block Hotel Janaki Trek to Nandi Hills KT-732,KT-733 entrance of airport Budget 1250 rs 350 rs Koramangala 650 rs (Serviceable) (Informative) * * (Serviceable)Travel Value Chain•User books an entire journey, places more credibility on user driven choices and content•MakeMyTrip evolves with receiving data pertaining to each segment as well as servicing choices to each segment•MMT makes money from the supplier side for serviceable data and is able to bridge its offerings with informative data•Over time, MMT evolves to become a social network within an online travel site promoting a community basedoffering•Best contributors are rewarded and consumers over time witness the quality of their journey choices as the data matures•MMT will be able to increase its conversion rate in categories other than airline travel and will be able to give itssuppliers a boost by user generated content•With MMT’s foray into railway/bus bookings, they can add offerings for rural tourism, green tourism and rustic experiences
Small incentives is enough to woo this segment to generatecontent and source suppliers• Recency in ratings of hotels/cabs/flights/buses buildscredibility and trust• Recency in rich content from users pushes up choice of acertain service and would help in MMT supplier consolidation
Internal External Brand Vision Brand Promise Emotional Connection Brand to connect with consumer who Brand to Commitement seek the best in value or in experiences Fixed become the leading choice to customers – A price you can’t 1 and achieving the same through the same people who seek for “journey” beat, An between any 2 experience you Relevant co-ordinates can’t forget Differentiation User interface, choice matrix, 5 2 Value Brand Delivery Brand Positioning We want to be Information drivers, travel community, rich media content, Drivers Convenience, Multitude of choices, user generated information that wont be Will fulfil perceived as a Sophisticated loyalty schemes charged and ensuring every commitment choice brand for traveler gets the bang for the by integrating anything, buckVariable travel solutions and populating user generated anywhere related to travel, experiences and Awareness Approach will primarily be in the 4 3 Accesibility Increasing offline outlets to bring online space to tap in the content for holidays. Our consumer behavior of search in person interaction to the suppliers and competitive consumer thereby contributing ,social networking and gaming. to increased trust and information advantage will be Viral campaigns on the lines of relationship over the years regarding local pricing, choices, “beat this journey at a lower price” and treasure hunt will experiences value and keep consumers perceiving MMT community as different from other OTAs
This brand positioning will keep MMT well poised to be the onestop for all travel related solutions and ride the wave of thisgrowing OTA segment while leveraging all its existing strengthsand customer aquisitions
Brand your experience Consumers are Carpooling Group booking motivated to contribute Passengers booking a discounts when personal brandingflight/hotel can be given Passengers can opt for is activated. an option to opt for a being part of a pool for carpool availing group discounts Any new experiences on hotel bookings. that MakeMyTrip can •Booking facilitated by Thereby people who service and is MMT book on MMT for the contributed by a user •Connection between same day/hotel can will be branded with a passengers travelling avail appropriate name according to and reaching around discounts as being part consumer’s choice the same time of a group. before it goes up for facilitated by MMT bookings.•Value add will drive up Will help in conversion cab bookings and full from mere searches to MMT can drive content journey bookings actual bookings and non travel sales in this segment
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References1. comSCORE data passport report H1 ‘10 and H2 ’102. Euromonitor International : Country Market Insight - June 2010 – Travel and Tourism – India3. EBSCO report on MakeMyTrip VIKALPA • VOLUME 35 • NO 1 • JANUARY - MARCH 20104. comSCORE Online Travel Trends In India Travel Distribution Summit – India 20105. A perceptual mapping of online travel agencies and preference attributes - Dong Jin Kima, Woo Gon Kima, Jin Soo Hanb6. Responsible tourism management: The missing link between business owners’ attitudes and behaviour in the Cape Town tourism industry Nicole Frey, Richard George* School of Management Studies, University of Cape Town (UCT), Rondebosch, Cape Town 7701, South Africa7. PWC : Hospitality Directions Europe Edition*Issue 14 November 2006: How to maintain success in the online travel space8. ResearchOnIndia : Online Travel Industry : August 2010 : 3 parts9. A Case Study on MakeMyTrip Mobile Travel Solution & breaking the Mcommerce Inertia10. Tripping along:Deep Kalra (PGP 92),makemytrip.com11. Travel 2.0:The future of travelling:Whitepaper12. LiveMint:Future course of Marketing and Advertising13. Sachin Bhatia on Social Networks: Vertical Social Networks, the future of online travel distribution14. WebCredible:Online travel sector usability report15. Marketing Research in Online Travel Agency Space Faculty Contributor : N. B. Kanagal,Associate Professor,IIM B16. Rockey Nebhwani , 2009, "Indian Railways - Epicenter of Indian Online Travel Industry Revolution", February 2, http://www.infosysblogs.com/multi-channel-retailing/2009/02/indian_railways_epicenter_of_i.html.17. IANS, 2009, "Indians Prefer Online Travel Portals to Plan Holidays", Aug 29, http://tech2.in.com/india/news/internet/indians-prefer-online-travel-portals-to-plan-holidays/85072/0.18. Marion Arathoon and P.R.Sanjai, 2008, "Online travel portals most prone to fraud", Jun 11, http://www.livemint.com/2008/06/10235627/Online-travel-portals-most-pro.html.