DELHI: The Indian passenger travel market is projected to grow at 11-11.5% to $48 bn by 2020 with the biggest contributor, air travel expected to grow at 15% to $30 bn as per a report released by Boston Consulting Group (BCG) and Google India.
The report titled, ‘Demystifying the Indian Online Traveler’ charts the decision making journey of the Indian traveler and provides insights on the potential growth opportunities for travel businesses till 2020.
The report also says that hotels are expected to grow at 13% to $13 bn by 2020 as well while railways will remain at $5 bn. Additionally, as more people come online, smartphone penetration increases and use of digital payments goes up, the report estimates that India’s online hotel market will grow to US$4 billion with 31% penetration at a CAGR of 25%.
Speaking about the key findings of the report, Vikas Agnihotri, Industry Director, Google India said; “India’s domestic travel market is on an acceleration path. One of the key findings of the report is that by 2020, one in three hotel rooms will be booked online – a clear indicator of the growing importance of digital in travel research, planning and booking. There are several actionable insights for domestic online travel players including the role of mobile and the level of curation and personalization that Indian travelers are looking for.”
Travel planning journey
Demystifying the travel planning journey for the typical Indian consumer, the report shows that for many Indian consumers, a vacation is an event planned in advance as opposed to being an impulsive purchase. Consumers typically spend 46 days on average planning their trip. They spend 49 minutes online on their travel research and visit as many as 17 touch points during their booking journey. However, it is interesting to note that the length of each online session is less than 3 minutes, due to the ubiquity of mobile. Through their journey, Indian travelers tend to move back and forth across different online channels, checking availability, comparing prices and assessing connectivity.
Talking about the opportunities for the online travel players, Abheek Singhi, Senior Partner and Asia Pacific Head of Consumer Practice, BCG said, “Travel is a high investment – both monetary and emotional category. Technology has led to democratization of travel through better information and price discovery – and shall lead to 11-11.5 % growth in years ahead. The question is “how to address the 17 different touchpoints of 3 mins each over 49 days! “.The imperative for players is to use technology and advanced analytics capability to understand individual micro journeys and offer personalized and curated travel solutions.”
The report finds that there are several touch points in the consumer journey, including OTA (64% reach), search engines (33% reach) and Maps (26% reach). Advocacy and word of mouth form an important input into the travel booking journey with 76% of people gaining inspiration to travel from family and friends. Further, reviews and ratings from other users is the single most important criteria to select a certain booking channel. Finally, the research finds that consumers use a mix of online and offline sources of information during their booking journeys.
Within online channels, mobile apps are the preferred destination as 49% consumers prefer to use them for research and 44% for booking. 57% of the consumers believe that online channels give them better deals while 41% find it more convenient for them to book online.
As consumers move seamlessly across channels and devices, the role of digital in hotel bookings is significant, not just as a channel for purchase, but also as an influence in decision making. According to Rohit Ramesh, Partner and Director, BCG “Mass marketing will increasingly be less sufficient. Advocacy, especially, plays an important role in decision making.Personalized advocacy is curated from customers’ personal networks, for example, from social media friends’ list.
Predictive advocacy is based on customer “lookalikes”, for example, using “people like you” narratives and tries to imagine what consumer preferences might be. Given increased online ubiquity, players will need to leverage the digital medium across channels and touchpoints to effectively connect with consumers.”
Musafir Namah Bureau