a one-stop service provider. OTAs are now covering the overall hospitality and travel space by offering international flights, hotels, international and domestic holidays, car rentals and so on thereby addressing the consumer's entire travel needs. That's going to be the way the OTA industry will progress and transpose in the next five years.
So has the transition already begun? What stage is it currently at?
The top two players (Yatra and MakeMyTrip), which control a little over 70% of the overall online travel business pie, have walked the road of transition already. Though a slow one, the process started two years ago and we are now speeding up our efforts in this direction.
Could you tell us about the initiatives taken by Yatra in this direction?
On the product level, the offerings predominantly were in the form of domestic flights and other tabs/ user interface weren't so prominent then. But if you look at our website now, there is a huge skew towards hotels, holidays and international flights among other things. We have set up a meeting, incentive, conference and event (MICE) division to cater to the corporate sector and handle their leisure desk.
Has having an offline presence become equally crucial for online travel companies? What are your plans in this area?
We realised very early that selling holidays online could be a challenge and hence worked towards migrating the customers to our stores by changing their brand preference. We have already set up 40-odd Yatra.com stores in 20 cities across the country and are now rolling out a franchising model. Over 100 stores will be opened in Tier II markets, particularly in high footfall areas, as a result of which customers will be able to physically experience the brand on the ground. These stores will be operational in this financial year and take the total store count to 140.
Have the OTAs finally started making money?
They are not losing money for sure. Yatra, in particular, has significantly benefited by incorporating the hotels, holiday categories as part of its offerings as these offer considerably higher margins. To further increase revenues, we will add more avenues, cross-sell and up-sell other products. In the last six years, about 20 lakh customers bought a domestic ticket product from Yatra and less than 5% booked a hotel or a holiday from us. It's not that the balance 1.9 million people haven't taken a holiday, just that they bought a holiday from some other brand or a mom-n-pop travel agency. So the game now is about driving brand preference and being seen as a complete travel brand and a leader in the category. That's the reason we signed Salman Khan as the brand ambassador.