'Maximum internet transactions happen in the travel sector'

Written by Diksha Dutta | Diksha Dutta | Updated: Oct 10 2011, 07:36am hrs
The $15 billion travel outsourcing industry still has a lot more to offer to BPOs and IT companies. Vipul Doshi, chief executive officer, InterGlobe Technologies (IGT), a provider of IT and BPO services to aviation, travel and hospitality industries feels that his company will continue to concentrate on the existing verticals along with expertise in technology, as there is enough scope of expansion within these sectors itself. In an interaction with Diksha Dutta, he discusses the companys expansion into different geographies, impact of slowdown and hiring plans. Excerpts:

What are your geographical expansion plans, considering that all IT-BPO companies are looking at different delivery centres now

Our centres are primarily dependent on talent pool availability and where the customers want support. Our Cairo centre was set up primarily for the different language skills and we have 100 employees there. Even our Sri Lanka centre has 100 employees, as the country has good talent in travel domain professionals. Our Philippines centre has 500 employees at present. We will add another 1,000 people in Philippines in the next 12 months because of good English speaking capabilities. IGT is considering an onshore centre in USA, near shore in South America in the next 6-12 months. The business model we plan to follow is a combination of some onshore and near shore with more of off shore delivery centres.

What do you think about diversifying to other sectors and verticals

Travel industry is a knowledge centric sector and we have a travel focused lineage. When it comes to travel specialists, IGT is well known and we have packages that enable cross-selling. We have 45% conversion rates on all the calls, which are almost 10-15% higher than the industry average. We have contemplated about entering other verticals in the past, but realised we should stick to our core expertise travel and hospitality.

What kind of people do you usually hire and what are your hiring plans ahead

IGT hires technologists and people from travel industry. The people from travel agencies bring in-depth knowledge from travel industry. IGT only needs to train them on the IT and BPO processes. Almost 60-70% of our employees have travel related certification . Though IT contributes 60% to our revenues, 60-70% of IGT employees are in BPO.

How important is technology for the outsourcing market in the travel sector

The maximum internet transactions happen in the travel sector. Travel e-commerce is on top of the business. Mobile apps are there for travel bookings and check-ins. Recently, mobile has been integrated with social media and there is an inspirational phase coming from new age media. IGT is enabling social media solutions including social commerce, listening posts, social analytics, mobile apps. Mobile check-ins and tech solutions for such facilities is the future in the segment.

What is the size of the overall travel outsourcing market and at what pace is it growing

The total travel and transport outsourcing market is around $15 billion. There is a huge opportunity for us from a market perspective. Our biggest market is North America which contributes about 70% of revenues, Europe is 15% and Asia gives us 15% of the revenue. Asia has witnessed the largest growth in the travel sector in recent times.

What is the impact of the recent economic slowdown on the travel outsourcing industry

Economic slowdown leads to change in the dynamics of the industry but we do not face any shrinkage. In such scenarios, clients move work from other centers from a cost perspective. Hence, cost cutting in such situations has a positive impact on our business. It is true that BPO is more operational focused and IT discretionary projects are impacted more slowdown. IGT was not impacted even in the 2008 slowdown. There might be pressures on pricing but IGT gets a premium for its domain expertise.

Our business also goes up in the wake of mishaps like volcanic eruptions, hurricanes etc. Back office work increases by manifold times in such situations. Example, for the volcanic ash, there was a call volume increase of 70-100%. At the same time, some disasters like 9/11 are really bad for the market.

What do you think about the trend of captives in this sector

Captives are not a common option in the sector. Usually, customers like to have 50% in-house and other 50% outsourced work in the travel sector. Initially, companies tried to do almost all the work in house, but they have now realised that outsourcing is a better option.