The campaign aims to instill aspiration among Indian travellers and establish a loyal customer base with travel agencies based on the total number of passengers booked within the specified timeline. Scheduled to run for four months, from February to June 2024, the campaign seeks to capitalise on the growing interest in travel to Kenya among Indian tourists.
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India‘s leading travel aggregator ixigo has announced its foray into the hotel segment after launching hotel search and booking feature on its platform. The company has made the feature live for hotels at few destinations in India as of now and plan to scale up its offerings and inventory in next few months, revealed ixigo’s Co-Founder & CEO.
In a candid interaction with Aloke Bajpai, the Co-Founder and group CEO of ixigo, ETTravelWorld dove deep into ixigo’s game-changing plans of venturing into hotels and some intriguing insights, expectations, and the roadmap for this pivotal move. He said it’s the ‘most exciting’ development for the company now after launching Gen-AI feature ‘Plan’ on its portals.
Bajpai acknowledged that this new development has been in the works for some time now, as they aim to transition into a more transactional model, akin to an Online Travel Agency (OTA) for hotels. Although it’s still not fully rolled out, Aloke anticipates a broader rollout by the end of the current quarter.
The learning curve
With the unique demographic and psychographic composition of ixigo’s customer base, predominantly from tier 2, 3, and 4 cities and the middle to lower-middle-income groups, Bajpai emphasised the need for humility in approaching this segment. He stated that the initial phase would be all about learning: understanding their customers’ preferences, expectations from accommodation, and what type of supply will gain traction in this segment.”These early quarters are pivotal for ixigo to grasp and adapt to the evolving dynamics of this diverse customer base,” he mentioned during the conversation post launch of a new travel credit card in Delhi for which ixigo has partnered with AU Small Finance Bank.
The ixigo Group CEO described the foray into hotel bookings as a substantial step for ixigo. He noted that many of their users were still resorting to offline methods when it came to accommodation, like arriving at a destination and searching for last-minute lodging options. “ixigo aims to bridge this gap, encouraging users to adopt online hotel booking behavior.” Bajpai highlighted that currently, only 20 per cent of hotel bookings are made online in India, signifying an immense opportunity to penetrate this market.
The ixigo-AU co-branded credit card offers a unique value proposition, covering all aspects of travel, including flights, trains, buses, and hotels. It stands out as the only Online Travel Agent (OTA) credit card that provides customers with access to 8 railway lounges and 8 domestic airport lounges per year, all without any minimum spending criteria.
When questioned about the type of inventory ixigo intends to offer, Bajpai emphasized a learning curve, stating that they would initially focus on understanding their users’ preferences. Over time, they plan to build a deeper inventory, aligning it with what their user base demands and what suits their needs. Bajpai also shared a notable financial development from the company in the recent quarters. He revealed that ixigo has maintained a positive cash EBITDA ever since emerging from the Covid-19 impact, except for the affected quarters. “Even last year, we managed not just positive EBITDA but also a positive cash flow. Looking ahead, we anticipate this positive trajectory to continue,” he stated.
ixigo is aiming for more than a 6x growth rate, an impressive target that seeks to bolster company’s already strong presence in the online travel market.
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For SKIL Corporate Travel, an end-to-end hospitality solutions provider for accommodation, events, MICE,and ground transportation, the Covid pandemic set the pace for the growth of the company. As the space evolved and the competition diversified amidst a big shift towards online solutions, the company figured its way around it towards growth, and successfully at that.
“We grew 300 per cent post-Covid and 100 per cent the year after,” said Shylender Jindal, Managing Director at SKIL Travel. “In 2020, the year of Covid, as an organisation, we did about INR 10 crore of top line, because we were shut for the first six months,” he said.
Most cities are expected to witness rate increases in line with local inflation. This follows substantial price hikes in 2022 and 2023, primarily driven by the surge in “revenge tourism.” In 2024, Mumbai is expected to have the highest growth rate in hotel rates among major Indian cities, with an increase of 15 per cent.
“The year after, when we were hit with the second and the third wave, we achieved a revenue of INR 35 crore. So, we grew from a Covid year of INR 10 crore to INR 35 crore in the second year. And from that to last year, which was a very successful year, we achieved a revenue of INR 25 crore,” he shared. Their top line was INR 55 crore in 2019 and INR 45 crore and INR 25 crore in 2018 and 2017 respectively, he added. Jindal attributes this growth to their well thought out expansion plans and the move to diversify their products. According to him, the additional product line played a big role in the growth of the company, as did the customer confidence in working with stronger vendors and partners.
Earlier this year, SKIL Travel opened its International MICE division offering simplified end-to-end bespoke event services to clients worldwide. Next, as part of a phased expansion plan, SKIL Travel is also set to offer corporate air ticketing and visa services, to streamline global corporate travel. Their second branch in Mumbai commenced operations on June 1.
Where a lot of companies buckled under the pressure of growing shift to online agencies, for SKIL that has not been the case. According to Jindal, they learnt to deal with the pressure in 2016 itself, when their car rental, which was spread across 60 cities in India, was growing. That was the time Ola and Uber entered the corporate world.
“They created a disruption by offering 30 per cent to 40 per cent less pricing. The clients started moving out because of the price point challenge and we struggled to convince them that we are the right partners because of certain SOPs and sustainability that we have built over time,” he shared.
In an exclusive interview with ETTravelWorld, Anoop Bali, Whole Time Director, Tourism Finance Corporation of India (TFCI), talks about the growth of financing the tourism and hospitality industry. However, he warned about rising construction costs and increasing project capitalisation needs. He said long-term financing will be crucial as hotel development timelines are currently 3-4 years.
The pandemic, however, came as a ‘blessing in disguise’ for the business when every client who had made a point that pricing is a challenge, was now ready to pay a 30 per cent premium for high-quality cars. “The business grew phenomenally because none of those players was able to match the service quality and the network that we could offer, and that has continued after the world re-opening. The clients have now understood the importance of quality over pricing in that particular space,” he said.
So the network, the service quality and the compliances which the company had in place in terms of ensuring that the Covid protocols are being followed – sanitisers in cars, windshields in cars, just to do a partition between the driver and the guest – all played a very important role in the minds of the customers. “As of today, 40 per cent of our turnover comes from this particular segment, which is SKIL cabs,” he said.
“In the other booking segments, like the hotel bookings, we are able to offer our clients far more competitive rates than what they’re able to achieve online,” said Jindal. “Online portals take anywhere between 20 per cent to 40 per cent commission from the hotels. We do not believe in taking such high margins. We work on competitive pricing and margins and pass on the benefit to the customer,” he said.
Personalisation, safety (especially in the case of women travellers and senior citizens) is the other strong point. Skil plays big on experiences and quality service. “We have a dedicated team looking into the customer needs. It is personalisation to that extent,” he said. “We realise that every customer whether it is a corporate or an individual, is equally important. And that has helped us ace the game,” he concluded.
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