Mumbai: With the slowdown in aviation and the proposed scrapping of agency commissions, online travel agents, or OTAs, until now focused on the booming aviation and tourism sectors, are switching their sights to railway bookings to shore up revenue.
The Indian Railways opened Internet booking to private operators in July, but online travel agents, riding high margins in aviation, weren’t too keen.
“It is a very thin-margin business. Selling a ticket will fetch only Rs30-35,” said Hrush Bhatt, founder and director (product and strategy) of Cleartrip.com, an online travel agency started by Cleartrip Travel Services Pvt. Ltd.
“But then, it is a volume-driven business. If you manage to sell 10,000 tickets a day, it will give you a huge advantage,” he added.
Cleartrip.com has tied up with Indian Railway Catering and Tourism Corp. Ltd, or IRCTC, for its platform to become only the second online travel agent to offer railway bookings on its website, from Tuesday.
IRCTC, a subsidiary of the Indian Railways, was till two months ago the only provider of railway tickets over the Web.
International travel agent Thomas Cook (India) Ltd became the first private operator to launch online rail bookings in July.
Now, other online travel agents such as MakeMyTrip (India) Pvt. Ltd, Yatra Online Pvt. Ltd and Ezeego1 Travels and Tours Pvt. Ltd, also plan to start rail bookings.
“Rail ticketing can be never a major source of revenue for OTAs. But it will help us offer a complete bouquet of travel offerings,” said Amitabh Pandey, president and head of e-business with Thomas Cook. “Though I cannot share the number of rail booking, it is encouraging and growing every week.”
Cleartrip, which launched search-only services for rail tickets in February, receives about 15,000 queries a day, up from 3,000 initially, Bhatt said.
“Our idea is to offer multiple options to book a rail ticket through various channels. With more spread, there will be more growth too,” said Sanjay Aggarwal, general manager (operations) with IRCTC.
More than 17.1 million passengers travel by rail daily in India, according to industry estimates.
In terms of value, nearly $3.6 billion (about Rs16,600 crore) worth of rail tickets were booked over counters or through regular agents in 2007-08. Online bookings accounted for about $377 million (Rs1,738 crore), according to analysts.
The railways expects to increase ticket sales by expanding its online presence, especially at a time when airline passengers are weighed down by rising air fares.
Domestic airlines, to offset increasing jet fuel costs, have increased ticket prices by 40% over the past 10 months and imposed fuel and congestion surcharges.
According to an analyst who tracks aviation and hospitality stocks, rail ticketing will not only be another stream of revenue in the backdrop of the current turmoil in domestic aviation, but also complement airline travel by providing last- leg connections.
The railways is currently the most affordable and accessible form of travel in the country, connecting over 7,000 destinations with more than 10,000 trains.
“You cannot be in the travel space without rail ticketing. We were away from the scene (till now) since railways did not allow us,” said Deep Kalra, chief executive and founder, Makemytrip.com. “The company has already bought API (application programming interface) from Indian Railways to facilitate online booking, and we will shortly launch this.”
Other airline travel agents are also seriously looking at selling train tickets, after most domestic and international airlines decided to scrap paying 5% agency commissions from 1 November.
The railways has already given licences to the Travel Agents Association of India, or Taai, and the Travel Agents’ Federation of India (Tafi) to sell tickets.