In order to give a boost to its Indian operations, Amsterdam-headquartered Booking.com is in the middle of adding more non-hotel options, with plans to launch a mobile wallet in the country. Booking.com’s Angel Llull Mancas talks to Ankita Rai about the Indian online travel industry, the company’s partnerships with airlines and its possible foray into ticketing. Edited excerpts:
According to the RoC database, Booking.com reported nearly 46% increase in revenue in India, to touch Rs 38.14 crore crore in FY18. What do you attribute this growth to?
While Booking.com does not reveal country-wise revenue numbers what I can tell you is that the local business is growing at a rapid pace and alternative accommodation is our big focus in India. We reached the milestone of 140,000 reported local listings in India, of homes, apartments and other unique places to stay in 2018. This bears testimony to our recent analysis which states that 68% Indian travellers would prefer ‘alternative accommodation’ for their travel in 2019. Globally, Booking.com ended FY18 with 5.7 million reported listings in its alternative accommodations business, which is up 18% year-on-year. This resulted in the company recording $2.8 billion in revenue from this category in 2018, which is approximately 20% of our overall revenue for the year.
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At Booking.com, we have the agency model; therefore, commission is the way we generate revenue. This chiefly comes from accommodations; but in the near future, we see our new products such as attractions, cars, etc, contributing as well.
How important is the Indian market to Booking.com’s global operations?
Booking.com opened its first local office in India in 2012. We now have around 50,000 properties in the country. India is an important market with strong growth potential for us. We are betting big on the rising smartphone penetration and emerging e-commerce to drive business in the country.
The Indian travel market, which is growing at about 30% year-on-year, stands at about $12 billion as per the latest statistics. Within that, experts estimate that the online travel space would be about 20-25%. Overall, online bookings are growing at a fast pace. Booking.com has grown at about 68% in 2017-18, in terms of supply.
The Indian market is growing faster than China for us. Our key strength in India is our biggest-ever supply operation and customer service. Today over 50% of accommodation bookings globally are made on mobile.
What is the rationale behind your recent partnership with Air India? Is ticketing on the cards?
We are not selling flight tickets on our platform yet. But we will definitely work with partners who might have the need to offer accommodation. As India is poised to become the third largest aviation market by 2020 with its fast-growing outbound travel market, our strategy is to combine our strengths with Air India and other airlines to enable their customers to book on our platform.
Currently, we have strategic partnerships with Air India, Jet Privilege, IndiGo Airlines, HDFC Bank, Kotak Mahindra Bank and Citibank, among others. Apart from accommodation, we also offer attractions, tours and transport in cities, including transfers from the hotel to the airport. We might look at flight tickets, but the focus right now is on accommodation.
How localised is your business strategy for India?
Apart from using machine learning to offer relevant search to Indian customers, we have launched a light version of our mobile app. We also plan to launch our mobile wallet in India next month. It is our priority for the next quarter.
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Alternative accommodation is a big focus area in India. Our offering in this regard is particularly strong in Europe — after all, this is where our business commenced; but we are also seeing growth from markets such as India, the US, China and Japan.
Hotel booking sites have been pulled up for misleading information, exorbitant commissions and deep discount tactics. What is your strategy on discounts?
We source prices directly from partners. Booking.com doesn’t actually control or set prices. We work in a transparent manner with partners. Across the world, we operate in a standard fashion and don’t manipulate pricing. Our partners are in total control of their pricing and the inventory they list, and they upload this onto Booking.com. What we ask in return for listing with us is parity between the prices on Booking.com and their own channels. This makes for a better, less-confusing experience for the customer.