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Travel budgets shrink, late bookings on the rise

Travel budgets shrink, late bookings on the rise
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First Published: Sun, Mar 29 2009. 09 49 PM IST

New trend: MakeMyTrip’s Deep Kalra says airlines and hotels are offering last-minute deals primarily to sell their ‘perishable’ inventory. Harikrishna Katragadda / Mint
New trend: MakeMyTrip’s Deep Kalra says airlines and hotels are offering last-minute deals primarily to sell their ‘perishable’ inventory. Harikrishna Katragadda / Mint
Updated: Sun, Mar 29 2009. 09 49 PM IST
Mumbai: Summer discounts on airline and hotel bookings done at least 30 days in advance may not be enough to draw more travellers. As travel budgets shrink and special deals spring up to cover idle inventory, airlines, hotels and travel agents are noticing a shift towards late bookings.
Based on internal data for the past six months, airlines and hotels say more individuals and families rather than only corporate travellers are now purchasing tickets or reserving rooms at one or two days’ notice.
There is no independent study to confirm this observed change in booking patterns.
New trend: MakeMyTrip’s Deep Kalra says airlines and hotels are offering last-minute deals primarily to sell their ‘perishable’ inventory. Harikrishna Katragadda / Mint
“In the context of slowdown, people are not committing to purchase upfront. And there are airlines and hotels offering last-minute deals. This is primarily done to sell their inventory, which is dubbed as perishable inventory if it is not sold,” said Deep Kalra, chief executive and founder of MakeMyTrip (India) Pvt. Ltd, an online travel agency that handles airline and hotel bookings.
The window is shrinking especially for weekend trips and short holidays, he added.
Ticket sales at airport counters have increased over the past six months, said M. Thiagarajan, managing director of full-service airline Paramount Airways Ltd.
Airlines are looking to reverse that trend, both to draw more passengers and keep cash flow intact.
On Thursday, state-run National Aviation Co. of India Ltd, or Nacil, which runs Air India, announced special summer fares on tickets booked at least 30 days in advance.
A little earlier, low-fare airline JetLite India Ltd and Hotel Leela Group, owned by Hotel Leelaventure Ltd, introduced similar discounts on advance bookings.
“The booking windows are shrinking because of two reasons: Firstly, the advance ticket purchase scheme by airlines were confusing, and secondly, certain airlines have consistently dropped their fares in the last minute to take care of unsold inventory,” said Ankur Bhatia, executive director of Bird Air Services Pvt. Ltd, a subsidiary of Bird Group, which provides ticket reservation technology for airlines.
Hotels, too, are seeing an increase in late bookings.
“The latest trend is that even group bookings are made in the last minute. People are holding the decisions based on the affordability and best prices in the backdrop of economic slowdown,” said Guy Godet, general manager of Mumbai’s JW Marriott Hotel—a Marriott International -branded hotel.
Vivek Nair, vice-chairman and managing director of Hotel Leelaventure, agrees with Godet. “The booking windows have been reduced to an extent where we are witnessing “just-in” kind of bookings.”
Hotel Leelaventure owns and operates The Leela Palaces Hotels and Resorts in Mumbai, Bangalore, Goa, Kovalam (Kerala), Gurgaon and Udaipur.
“Yes, the booking windows are coming down. But this is a temporary phase. It will get normalized when the economy is back in its shape,” said Sant Chatwal, chairman and chief executive of Hampshire Hotels and Resorts Llc Chatwal is set to open a high-end hotel in Kochi, Kerala, early next month.
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First Published: Sun, Mar 29 2009. 09 49 PM IST