1 min read.Updated: 14 Jun 2020, 11:19 PM ISTSalman S.H.
OTAs are betting on reopening of domestic tourism and intra-state leisure travel to increase sales on their platforms
With domestic flights resuming in a staggered manner, online travel aggregators (OTA) in India are seeing a 30-40% rise in demand with some selling more than 5,000 tickets a day. However, flight cancellations are affecting revenues of OTAs, industry officials said.
The government imposed a lockdown in late March, which extended until May-end. All domestic and international flights were temporarily put on hold during this period, causing distress to online travel firms. Domestic flights resumed from May-end.
OTAs are now betting on the reopening of local tourism to increase sales.
Nishant Pitti, chief executive of EaseMyTrip, said there has been a rise in cancellations by customers when the lockdown was announced in March. These customers then rescheduled their tickets to April hoping that travel norms would ease.
Later, when the lockdown period was further extended, the Directorate General of Civil Aviation (DGCA) directed airlines to not take fresh bookings during the period. However by mid-April, refund requests were piling up and OTAs scrambled to process cash refunds to customers.
Airlines such as IndiGo and GoAir operate with OTAs using a wallet model for bookings. OTAs deposit a chunk of cash in the airline’s wallet, and they process air tickets on the basis of this outstanding balance with each operator.
“When we saw a sudden spike in cancellations, airlines refunded the money in the same wallet. But we can’t really provide refunds in credit to customers, hence we started providing cash refunds to users, and our wallets balances with flight operator piled up to almost ₹120 crore in April," added Pitti.