Market Research Report : Online Travel Industry in India 2012


Published on

For the complete report, get in touch with us at :

Netscribes (India) Pvt. Ltd., a knowledge consulting solutions company, announces the launch of its updated report – Online Travel Industry in India 2012. The online travel industry in India has witnessed tremendous growth as people move towards online travel portals due to convenience and discounted offerings.
The report begins with an introduction to the e-commerce market in India and offers information regarding the market size and growth. It also gives a break-up of the revenue for the e-commerce market. It goes on to explain the market structure of the e-commerce market and also provides an overview of the factors which drive this market. In the market overview section the structure of the online travel market is explained. Market size, growth and the break-up of the revenue generated is also provided for the online travel market. Increasing share of online travel market as well as the prevailing commission structure has been highlighted. Porter’s five forces analysis gives an overall picture of the online travel industry and helps to understand the major influencers. The business model explains the role of global distribution systems and their role in the online travel industry. This section also explains the various incentives provided by the OTA’s to attract more customers and the operational edge OTAs have over the traditional tour operators.

Drivers include factors such as proliferation of the internet, especially broadband, which has increased online traffic considerably. Rising disposable income has also acted as a driver for online travel portals. Indian railways online portal has proved to be extremely efficient and user friendly, instilling confidence among people to book tickets online. Other drivers identified include rise in low cost airlines which has paved a way to travel by air for the large middle class segment in India thus increasing traffic to these online portals. Secure payment mechanisms have given people the desired confidence to carry out transactions online. On the other hand tremendous rise in medical tourism has led to influx of foreign travelers to India which again gives rise to increased traffic. Challenges identified include stiff competition coupled with low margin and high operating costs which has caused profit margins to shrink. In addition, limited awareness about portals adds to the woes. Trends identified are emergence of value added services among various OTAs including discount vouchers to woo customers and gather a large market share. Emergence of corporate packages is another trend identified. Many OTAs are following a hybrid model constituting online and offline stores to penetrate the market even further. OTAs are also moving towards better technology so as to cater to the increased traffic and offer a user friendly experience to its clients. They are also becoming more responsible and addressing customer queries

Published in: Travel, Business
  • Be the first to comment

Market Research Report : Online Travel Industry in India 2012

  1. 1. Online Travel Industry – India Online Travel Industry IndiaFebruary 2012
  2. 2. Executive Summary  Ecommerce boom and increased awareness is likely to see the business grow Market  The estimated market size of the Indian online travel market is A bn with a growth rate of a % Overview  Air tickets constitute the bulk of the revenue share for online travel market Drivers: Challenges: – Proliferation of internet – Low margins & high operating costs – Rising income  Drivers &  – Indian Railways online portal  – Limited inventories and lack of awarenessChallenges – Growth in low‐cost carriers – Secure payment mechanisms – Rise of Medical Tourism  Value added services  Emergence of corporate travel packages f l k  OTAs looking for offline counters leveraging on their brand value Trends  Emerging travel information portals backed by OTAs  Religious travel is becoming a hot segment in online travel  Rising international travel g  OTA’s serving as a preferred search tool for checking fares and ticket availability  Rising PE/VC investments Major Players in the MarketCompetition p Player 1 Player 2 Player 3 Player 4 ONLINE TRAVEL INDUSTRY IN INDIA 2012.PPT 2
  3. 3. •Introduction•Market Overview•Business Model Business•Drivers & Challenges•Trends Trends•Competition•Strategic Recommendations•Appendix pp ONLINE TRAVEL INDUSTRY IN INDIA 2012.PPT 3
  4. 4. Increasing importance of e‐commerce will fuel the growth of online travel in a big way in the days to comeIntroduction E‐ Commerce Industry• E‐commerce essentially means trading of INR bn goods/services through an electronic medium such as 2000 D internet i 1500 D%• E‐commerce essentially uses funds transfer, electronic 1000 messaging, electronic data interchange, e‐mail etc. to C complete the transaction 500 A B• Most common type s of e‐commerce prevalent in India 0 are: 20‐‐ 20‐‐ 20‐‐ 20‐‐ • Online Travel • E‐retailing Market Share: Online Travel (20‐‐‐‐‐) • Online trading of stocks and shares • Online advertisements Type A Type B • Online job search • Matrimonial sites A% • Real estate / property research•Increasing awareness about internet shopping, cost competitiveness and better technology has gone a long way to fuel the growth of e‐commerce B% ONLINE TRAVEL INDUSTRY IN INDIA 2012.PPT 4
  5. 5. Airline ticket booking contributes to the bulk of online travel market in IndiaOverview Online Travel: Market Size• As more and more Indians are turning to the web for their travel needs this sector is poised to grow at a 600 A a2 tremendous rate• Increased awareness and better and reliable 400 a1 technology has gained the trust from the market 200• Online travel market in India valued at INR A bn in 20‐‐ 0 20‐‐ 20‐‐Online Travel: Structure Online Travel: Break‐up (20‐‐‐‐‐) Type 1 Type 2 Online  Type 3 Type 4 Travel c % c% d % Type A Type B Type C Type D b % a % Type a1 Type a2 ONLINE TRAVEL INDUSTRY IN INDIA 2012.PPT 5
  6. 6. Drivers & Challenges – Summary Drivers Proliferation of Internet Rising income  Ri i i Challenges Indian Railways Online Portal Low Margins & High Operating Costs Growth in Low‐Cost Carriers Limited inventories and awareness Secure Payment Mechanisms Rise of Medical Tourism ONLINE TRAVEL INDUSTRY IN INDIA 2012.PPT 6
  7. 7. Trends ‐ Summary Value added services Emergence of corporate travel packages Emergence of corporate travel packages OTAs looking for offline counters leveraging on their brand value Rising international travel Key  Trends ` Embracing Technology Embracing Technology More interactive  OTAs OTAs, a preferred search tool for checking fares and ticket availability PE/VC investments ONLINE TRAVEL INDUSTRY IN INDIA 2012.PPT 7
  8. 8. Public : Domestic Company – Company 1Company Information Offices and Centres – India  Block ABCCorporate Address City XYZTel No. 123456Fax No. 1234567Website http://www.abc123com/ p // abc 3co /Year of Incorporation 20‐‐ City AProducts and ServicesProducts and Services Category Products/Services Key PeopleProduct 1 P1,p2,p3 Name N Designation D i ti ABC abc XYZ xyz MNO mno ONLINE TRAVEL INDUSTRY IN INDIA 2012.PPT 8
  9. 9. Public: Domestic Company – Company 1Financial Snapshot i i lS h Key Ratios K i y‐o‐y change  Particulars  20‐‐ 20‐‐ 20‐‐ 20‐‐ Revenue Net Income (20‐‐‐‐‐) Profitability Ratios 6 x4 0.15 Operating Margin a1 a a2 a3 a4 x3 Net Margin b1 b b2 b3 b4 4 x1 x2 0.10 Profit Before Tax Margin c1 c c2 c3 c4 2 0.05 Return on Equity d1 d d2 d3 d4 Return on Capital Employed e1 e e2 e3 e4 0 0.00 Return on Working Capital f1 f f2 f3 f4 20‐‐ 20‐‐ 20‐‐ 20‐‐ Return on Assets g1 g g2 g3 g4Financial Summary  Return on Fixed Assets h1 h h2 h3 h4 Cost Ratios• The company incurred a net profit of INR  A mn in FY 20‐‐, as  Operating costs (% of Sales) i1 i i2 i3 i4 compared to net profit  of INR B mn in FY 20‐‐ Administration costs (% of  j1 j j2 j3 j4• The company reported total Income of  INR X mn in FY 20‐‐,  Sales) registering an increase  of  r % over FY 20‐‐ registering an increase of r % over FY 20 Interest costs (% of Sales) Interest costs (% of Sales) k1 k k2 k3 k4• The company earned an operating margin of  d1  % in FY 20‐‐ an  Liquidity Ratios decrease of  k  %  points over FY 20‐‐ Current Ratio l1 l l2 l3 l4 Cash Ratio m1 m m2 m3 m4• The company reported debt to equity ratio of  g  in FY 20‐‐, an  Leverage Ratios increase of r % over FY 20‐‐ Debt to Equity Ratio n1 n n2 n3 n4Financial Summary  Debt to Capital Ratio 01 o o2 o3 o4 Interest Coverage Ratio p1 p p2 p3 p4 Indicators Value (DDD/MMM/YYYY) Efficiency RatiosMarket Capitalization (INR) a Fixed Asset Turnover q1 q q2 q3 q4Total Enterprise Value (INR) b Asset Turnover r1 r r2 r3 r4EPS (INR)EPS (INR) Current Asset Turnover Current Asset Turnover s1 s s2 s3 s4 c Working Capital Turnover t1 t t2 t3 t4PE Ratio (Absolute) d Capital Employed Turnover u1 u u2 u3 u4 Improved Decline ONLINE TRAVEL INDUSTRY IN INDIA 2012.PPT 9
  10. 10. Public: Domestic Company – Company 1Key Business Segments  Key Geographic Segments  P1 Country ABC 6,000 6,000 6 000 c1 d b1 c 4,000 4,000 b a1 a 2,000 2,000 0 0 20‐‐ 20‐‐ 20‐‐ 20‐‐ 20‐‐ 20‐‐ 20‐‐Key Recent Developments Description  NewsOverview • It sells Product 1 under the brand name of ‘abg’ & ‘def’Production facilities • In India the company has k manufacturing hubs and  j marketing offices Shareholding pattern • Promoters of the company hold j % of the share while k % is held by general publicClients • Clients are spread across ghj countries spanning across t continentsInvestments • The company wants to invest INR K mn in a company through a  joint venture in Country 2  producing product a and product b producing product a and product b • So far the company invested INR 0.C mn in company A in country A ONLINE TRAVEL INDUSTRY IN INDIA 2012.PPT 10
  11. 11. Thank you for the attentionThe Online Travel report is a part of Research on India’s Travel and Tourism Industry Series. For more detailed information or customized research requirements please contact:Gaurav KumarPhone: +91 33 4064 6214E‐Mail: gaurav.kumar@netscribes.comResearch on India is a product of Netscribes (India) Pvt. Ltd. Research on India is dedicated to disseminating information and providing quick Research on India is a product of Netscribes (India) Pvt Ltd Research on India is dedicated to disseminating information and providing quickinsights on “hot” industries in India and other emerging markets. Track our new releases and major updates in these industries onAbout NetscribesNetscribes is a knowledge‐consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of investment &  g g f g p y p p fbusiness research, business & corporate intelligence, content‐management services, and knowledge‐software services. At its core lies a true value proposition that draws upon a vast knowledge base. Netscribes is a one‐stop shop designed to fulfil clients’ profitability and growth objectives.Disclaimer: This report is published for general information only. Although high standards have been used the preparation, Research on India, Disclaimer: This report is published for general information only Although high standards have been used the preparation Research on IndiaNetscribes (India) Pvt. Ltd. or “Netscribes” is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes (India) Pvt. Ltd. and prior permission is required for guidelines on reproduction. ONLINE TRAVEL INDUSTRY IN INDIA 2012.PPT 11