Mumbai : The online travel space seems poised for substantial activity withseveral start-ups jumping into the fray, even as news of failed ventures hasstarted doing the rounds. While several new and high profile online playershave impressive revenue projections and are confident of drawing customersfrom existing brick and mortar companies, old hands in the business sound aword of caution on the scalability of the business at the moment. The tusslefor customers however is out in the open with some online players expectingalmost 10 per cent of this business to move online in the next few months.

Players like Mr Manoj Gursahani of Travelmartindia, who has been in thetravel business for the last 20 years estimate that about three per cent ofthe business has already moved online. This is however challenged byindustry players like AM Kakkar, who heads Thomas Cook, India. Mr Kakkarsays that the business that has moved online is actually a fraction of threeper cent. "We do 10,000 transactions a day of which six are online," says MrKakkar. "While we do believe that the Internet will play a major role in thebusiness and have already invested Rs 26 crore on our online stratgey, wealso believe that it is sometime away, the scalability of the onlinebusiness is still limited at the moment," he adds. The sector has seenseveral online start-ups in past months, and companies continue to mushroomwith an aim to servicing customers both retail and corporate. Says Mr DeepKalra, whose site Makemytrip.com was launched just a few weeks ago, "thisbusiness is perfectly suited to transform itself for the Net, the travelbusiness ranks topmost in terms of revenues in online business in the US.

Consider this, when you talk to your agent, you are invariably doingeverything over the phone, you rarely meet the person, this is just as wellaccomplished online." Mr Kalra expects to do sales worth Rs 30 crore in thethird year of operations. "Globally, travel is the most transacted categoryon the Net, so its driving people to think that the business will take offquickly in India as well. But, given the small population of Internet users,the number of transactions expected may not happen quickly enough," says MrKakkar. Travel sites servicing the corporate segment also talk of impressiverevenue projections.

Take for instance eTravelindia.com, a site servicing corporate clients whichwas launched a while ago - the promoter Sanjeev Agarwal expects to dorevenues of Rs 50 crores in the first year of operation. "We have donerevenues of over four crores in the last month alone" claims Agarwal, whoprovides online services exclusively for corporates. Mr Gursahani, who is inthe process of integrating his brick and mortar travel business of 20 yearswith a click model, which he has instituted through his online company,Travelmartindia.com says, "we see a definite shift happening, especiallywhere the airline and hotel booking businesses go, its only for complicateditineraries that clients still prefer the consultancy services of a brickand mortar business at the moment."

Interestingly, these sites offer cost savings of anywhere between five to 30per cent, which is a critical USP that the online business possesses. "Weare able to gather data which improves our negotiation capabilities," saysMr Ajay Bali of eTravelindia.com. Mr Bali adds that the other benefits ofthe online business are the ability to provide relevant information onlineand the time reduction, which can be effected between the booking anddelivery of tickets, which will further improve once e-ticketing begins.

Also, being start-ups, they are saved the trouble of integrating legacypractices for an online business. Says Mr Gursahani, "my biggest challengetoday is changing business processes of a 20 year old travel company toadapt to the Net model". This is possibly why large brick and mortarplayers seem to be dragging their feet over establishing Net strategies,according to some online players. Dwelling on the specific reasons forjumping into the fray at this point, Mr Bali explains, "corporate travelbudgets are huge and there is an overall increase in business travel, and wethink we are in a position to provide corporates with the kind of servicethat traditional travel agents cannot provide." While it remains to be seenif these businesses can indeed scale up to meet projections in the months tocome, what is fairly clear is the fact that the space is poised for someserious action.