India is expected to be home to the fastest growing online travel market in the Asia-Pacific region this year, according to Dan Lynn, CEO of Expedia Air Asia, in an interview with Business Standard (link to http://www.business-standard.com/india/news/india-is-expected-to-befaste… ) today.
In spite of internet availability, broadband penetration and the use of credit and debit cards being low in the country, he said that online travel was the driving force in the e-commerce segment, with a global contribution of 70 per cent of all e-commerce activities. “The primary challenges are the external environment in the travel industry,” he explained. “The volatility in the aviation industry not only impacts the inventory and pricing but also the consumer sentiment while buying a travel product. As penetration increases further to Tier II and III cities, there will be an exponential growth in the online travel booking segment.”
He said that the share of online travel bookings currently stood at 30 per cent and was expected to rise exponentially as internet penetration increases in India. According to a recent IMRB and IAMAI report, the number of internet users has touched the 100 million mark and is expected to grow rapidly, especially with mobiles/ smart-phones also contributing to internet access. The growth drivers include such as rising disposable income coupled with proliferation of the internet, which has increased online traffic considerably, he told the newspaper.
In April, Lynn had told reporters that the Indian travel market was worth $22 billion, of which the online travel agency (OTA) space constituted $7 billion. He suggested that the emergence of more low-cost carriers and two- and three-star properties had made it cheaper for people to travel, making the OTA space grow at 30 per cent.
