Leisure travel to come back with a vengeance
Once the Covid situation is under control, not only will leisure travel bounce back, but it will also kick-off a chain reaction on different fronts, including a surge in corporate travel.
I recently came across a news article about a big e-retailer in India buying an Online Travel Aggregator (OTA), which was catering mainly to the Leisure Travel market in India and has a 18-20per cent market share currently. This made me wonder what the incentive for the e-retailer was to acquire an OTA that was making a distress sale, due to the impact of Covid on the travel industry.
Over the years, travel has been a big part of our lives, and since the last year it has become out of bounds for us, which means all our vacation plans have been put on hold. So then why would a big e-retailer buy an Online Travel Aggregator (OTA) now? Curious, isn’t it? I see this as a golden opportunity for the e-retailer to get into the OTA market with a very low investment, and then possibly diversify its product portfolio over time. If you connect the dots, you will get a fair picture of how this is going to play out in the next 2 to 3 years.
Leisure Travel, which is big part of our life, is going to come back with a vengeance. The e-retailer will reap the benefits of this smart acquisition as well. That being said, it is not going to be a cake walk, since there’s plenty of competition around. Nonetheless, this is a smart move. Many top companies have tried to find a footing in the travel industry at a high price point and have found it to be a low margin and price sensitive market. The important thing to bear in mind in order to be successful in this competitive travel industry, is to get in at the right time and at the right investment. Even though the e-retailer made the right call, the risk involved is high. However, it is a risk worth taking, given that the investment is comparatively low than it would have been a couple of years back. Read More
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This article written by Sudindar Rao appeared in ET Travel World
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