A new TV commercial shows a man lying on a hospital bed after being stabbed in the back by a hotel: it didn't deliver on the promises it had made. The surgeon advises him to try an online hotel-booking portal. In another ad, IPL cricketers are seen promoting hotel bookings through a travel portal.
After years of advertising the lowest possible fares, online travel sites like Makemytrip, Hotels.com, Goibibo and Yatra are talking hotels. It is a business which has remained largely untapped all these years, as Indian travelers preferred to book hotels over the phone or when they arrived at their destination, despite the convenience of the Internet.
"They did not mind buying rail and air tickets online, but when it came to booking hotel rooms, they had no trust," says Manish Kalra, marketing head of travel firm Makemytrip, which sells air and rail tickets apart from hotels. "All that is changing now," he adds.
Makemytrip's revenue from hotels and packages through its Indian and global subsidiaries, increased by 55.2% to $48.6 million (Rs 262 crore) in 2012 from $31.3 million (Rs 169 crore) in 2011. PhoCusWright, a global travel market research company, says revenue generated through online hotel bookings in India increased by 28% to Rs 3,369 crore in 2012 from Rs 2,634 crore in 2011. For most big hotels, online room bookings are growing almost 100% year on year.
"From about 10% of our total bookings a year ago, online bookings have increased to around 16% this year," says Guy Hutchison, vice-president, operations - India for Hilton Worldwide. Worldwide, nearly 55% of the group's room bookings are made through the Net. But, says Sanjay Bhasin, managing director at Goibibo, only 6% of hotel inventory is sold online - a huge market to be exploited.
"Consumers are shifting focus from off line to online transactions. We saw more than 100% growth in online hotel bookings," says Sharat Dhall, chief operating officer at Yatra.com. "The internet has broken down information barriers creating unprecedented levels of transparency, and travelers can now get a true idea of the value that one hotel has to offer versus another," says Aloke Bajpai, chief executive and co-founder at ixigo.com, an online travel company.
A major chunk of online bookings today constitutes 3-star hotels. "In domestic bookings, 80% of the room nights we sell constitute 3-star and below," says are aimed at gaining the trust of existing and prospective customers. The MakeMyTrip campaign was created by advertising agency Draftfcb-Ulka.
"People go online searching for hotels, but they lack faith in making room reservations. Our main proposition was to create a sense of reassurance," says Sanjay Tandon, chief operating officer at the advertising agency.
Goibibo is spending around Rs 5 crore on advertising. Emmanuel Upputuru, founder and chief innovation officer at ITSA Brand Innovations, which created the Goibibo campaign says, "People had a mindset that when you book online you get cheated. So our main idea behind the campaign was to build trust in the brand."