New Delhi: Smaller hotels in India, currently excluded from online distribution platforms on account of cost and other reasons, may be able to get on board through a cheaper, stripped-down interface that’s currently being tested.
This comes as the importance of mobile travel booking platforms increases and there is growing demand for ancillary services such as theatre and tourism (site) tickets to be offered through the same window.
The global distribution system (GDS) platform currently funnels inventory from airlines, hotels, trains and car rental companies and distributes this to customers. The majority of India’s standalone and small hotels are not on distribution systems.
InterGlobe Technology Quotient Pvt. Ltd (ITQ), a global distribution system provider from InterGlobe Enterprises Ltd that runs low-cost airline IndiGo, plans to launch a simplified platform that will enable even small hotels to connect to GDS and sell rooms through online and offline travel agents.
Mint’s Moulishree Srivastava says India’s smaller hotels could soon get access to online platforms thanks to a new interface that’s undergoing tests.
Currently, a hotel has to pay around Rs 10 lakh for the software interface that can connect with distribution systems used by travel agencies. The new system will be cheaper and, therefore, more cost-effective for small hotels.
“Today, if you were to bring in more content into GDS, because it is a sophisticated system, it needs equal amount of sophistication on the other side,” said J.B. Singh, president and chief executive of ITQ. “Airlines have that kind of sophisticated platform, you can bring it together in a couple of weeks. But if you were to go to a small chain hotel, which is not so sophisticated, the two technologies would be so far apart that they will find it almost impossible to talk to each other.”
The new interface offers the prospect of a 30% increase in the number of hotels in which accommodation can be booked online through a global distribution system. Currently, fewer than 10% of the hotel rooms in India are available with travel agents and can be booked online.
“In a couple of months we will start to roll out some new products for India related to simplified interface for travel agents that can talk to slightly lesser sophisticated technologies,” said Singh.
India has between 200,000 and 300,000 hotels, according to industry estimates. In terms of rooms, there are 125,000 classified and 2.5 million unclassified hotel rooms, according to government data for 2010.
“The big marketing opportunity lies in the consolidation of the hotel industry in this space. We have major hotel chains on GDS, which have around 20,000-30,000 rooms,” said Singh. “But there are 400,000 or 500,000 rooms sitting untapped from hotels that are small but good. And this number is growing rapidly,” he said.
Hotels are also getting on to local distribution systems catering to the domestic market because these are cheaper than a GDS, said Ankur Bhatia, executive director of Bird Group, a travel conglomerate that owns Amadeus India Pvt. Ltd. Amadeus runs one of the top GDS systems and has a 60% share of the Indian subcontinent’s travel technology market, Bhatia said.
“Global distribution systems have only content coming in from major hotel chains but not from standalone hotels. It might not be the right platform for them,” said Bhatia. “However, the domestic standalone and small hotels are increasingly using local distribution systems, which cater to the domestic market for hotels, travel insurers and telecom providers for calling cards.”
Distribution system providers will need to tap the domestic hotel segment in order to grow, analysts said.
“Online travel agencies have direct contracts with many of these standalone properties. It is all the more important for GDS providers to get more hotels because OTAs have a very strong start here, specifically in the Indian context,” said Chetan Kapoor, research associate, PhoCusWright Inc., a travel research firm.
Besides bringing more domestic hotels online, there is a need to add ancillary travel services, ITQ’s Singh said.
“There is a big shift happening towards ancillary revenues, more combinations of travel products are coming up, and demand is catching on for theatre, shows or tourism (site tickets),” he said.
The other shift that’s taking place is towards mobile travel booking platforms.
ITQ is also planning to launch a mobile platform for travel agencies.
“We will make an announcement regarding mobile platform for ticketing in couple of months,” he said.
He refused to give more information on the platform beyond saying that the system is being tested.
“Air ticketing is available on mobile but hotel reservations are a bit complex because of the options involved. Hotels are the upcoming area for mobiles in India with smart phone penetration rising,” said PhoCusWright’s Kapoor. “However, unavailability of a unified platform that can incorporate various mobile platforms can slow down the process, so it still has a long way to go. The bigger challenge lies in how these companies convert the online experience, which customers are used to, into a mobile experience.”