The new generation of enterprising and audacious travelers are giving a whole new boost to the online travel market. We have the smartphones to thank.
Travel agents are nearing extinction, courtesy the boom in the online travel market. We are witnessing a surge in the online traffic at sites that provide an array of traveling options. Users can now book a 5-star suite in the Bahamas, in their pajamas, from the kitchen. Users are basically spoilt for choice. Online portals maintain transparency by placing a comparison with other websites. With a staunch faith in online transactions, families and adventurous couples are freely spending on weekend getaways from one end of the world to the other end. Reasonable fares and seasonal discounts have uplifted the hopes of the populous. Traveling is not the bourgeois’ dream any more.
A burgeoning financial growth was observed in the global online travel market. According to a study published by the Allied Market Research, the online travel industry will see a valuation of $1,091 billion by the end of 2022. The same report states that a CAGR of 11.1% will be registered from 2016 to 2022. The credit goes to the disposable incomes of the people. The competition to please the end consumer is high. Budget hotels and luxury resorts are immediately collaborating with these online travel portals. Backpackers are constantly looking for options that agree to their expenditures.
Wander luster–a trend in vogue for the Indian Millennials
With Instagram bios mentioning ‘wander-luster’, the online portals are doing something clever – tracking with their cookies and promoting tour packages on these profiles. The Hindu Business Line recently mentioned that the Indian online travel portals can foresee a valuation of $48 billion by 2020. Smartphones with easy-to-use systems and accessible app features have done their trick. More than 560 million people availed vacations within the country, according to Make My Trip, one of the popular online travel booking portals. India boasts of a rich culture and vast natural lands that have become a tourist hotspot from within the county itself. Popular tourist destinations such as Goa, Kerala, Gujarat, Rajasthan, and the Seven Sisters in the North East have seen the rise in Indian tourist who want to experience the untouched heritage from the locals.
Family vacations are well planned months in advanced since the process involves emotional aspects as well. The need to spend a quality time comes into the equation. Certain key players in the online travel market include Goibibo, Make My Trip, Clear Trip, Yatra.com, and Paytm have made it easy for the Indian traveler. This market has also brought about some local players who are grabbing on to the prospective segment of the online travel market in India. Providing tour packages and seizing the opportunities to serve the Indian customer, the online travel market segment will continue to exponentially expand with each passing decade.
Online travel portals can expect a crowd-pull by GST
The new Goods and Service Tax (GST) that was implemented on July 1st will not have any astronomical impact on the rates and discounts offered by these sites. The news portals have been the harbinger of this pleasant news for the frequent fliers. The tax files state that the tour operator services will attract a 5% GST while foreign tours would be excused from service tax. However, the economy rates of flight are down at a 5%, a marginal reduction that will bring in a more domestic tourists. The business class will experience a slight increase by 2%-3% while the hotel chains claim to have their rates almost unchanged by GST. The business class seems to remain determined to stay unmoved by this sanction.
This phenomenon will see a good impact on the online travel market. Low budget, middle-class travelers will continue to have a standardized experience across all budget hotels and destinations. Majority of the income flies in from stream of economy travelers. Railways will attract a 5% tax under GST. Users on online discussion forums such as Quora have stated that railways are a lifeline for transportation and should be exempt from service tax under GST. However, a negligible shift in the travel prices will not hamper the adventurous Indian population since traveling is now made affordable by means of discounts and cashback.
The average Indian traveler has way too much gusto to be deterred by these changes made by GST. Online travel portals may feel the need to switch the prices by a few rupees but the traffic on their websites will be unperturbed. What is commendable is the fact that he will find a way out to take a tour at his favorite destination. The steady up rise in the financial statistics of the online travel agents will keep them thankful for the years to come. One cannot underestimate the potential of a middle-class traveler anymore.
Ipsha Barooah is a content writer at Allied Market Research. Playful with words, she has a persisting interest in brand management and advertising. Very active on social media. She loves to rhyme.
