Bain & Company and Google India are together launching a report on “How Does India Travel.” According to the report, the Indian traveler has come of age, spending approximately $94 billion in 2018 on around 2 billion domestic and international trips. This has helped the Indian travel and tourism industry achieve unprecedented scale, and the momentum is expected to continue with the industry growing at a 13 percent CAGR to $136 billion by 2021, according to a report.
Fueled by digital, Indian travelers are expected to spend an additional $24 billion on online travel bookings over the next 3 years. The report outlines how India spends on travel, the influence of online channels in their purchase journey, and potential growth opportunities for travel businesses until 2021.
Dybdykning i udgifterne på 136 milliarder dollars citerer rapporten en vækst på 12 procent inden for transport (50 milliarder dollars), 13 procent vækst i logi (21 milliarder dollars) og forbrug, som inkluderer udgifter til shopping, rekreation og mad, for at vokse med 13 procent ( $ 65 mia.) I løbet af de næste tre år. Efterhånden som flere mennesker kommer online, forbedres smartphoneindtrængningen, og brugen af digitale betalinger stiger, vurderer rapporten, at indiske rejsende vil bruge yderligere 24 milliarder dollars på online rejsebestillinger i løbet af de næste tre år, en vækst fra 25 procent i 2018 til 35 procent i 2021.
Online er en betydelig kilde til forskning
Elucidating the planning journey of Indian travelers, both for business and leisure, the report calls out five phases of a customer journey – Interest, Research, Booking, Experience and Sharing. The report states that during key research-heavy phase of interest, research and experience, digital plays a pivotal role with over 86 percent of consumers being influenced by online channels. During this phase, travelers spend their maximum time on search, travel tour provider websites, price comparison websites, and travel articles. Online video too plays a significant role with 21 percent of travelers being influenced by this platform. In the booking and sharing phase, the report states that nearly 60 percent of customers book transport and lodging online, and over 50 percent share feedback online with social media being the dominant platform.
Talking about the market opportunities for online travel players, Vikas Agnihotri, Country Director – Sales, Google India said, “New users perceive that online channels are geared towards the more frequent flyers and experience-oriented travelers; and existing travelers research online but the lack of trust in payments and booking experience make them end up booking offline. If travel players tap these online users through personalized marketing, messaging and travel plans, they can further augment online travel bookings. This can be done by adopting digital technologies to influence customers early in the journey and moving from one-time engagement to ongoing relationships to have a positive impact.”
”Der er en opfattelse blandt forbrugerne, at onlinekanaler er rettet mod premium-kunder sammen med en markant mistillid omkring betalings- og prisbetingelser. Det er bydende nødvendigt for virksomhederne at tackle disse bekymringer for effektivt at udnytte den voksende base af brugere. ” Sagde Arpan Sheth, partner Bain & Company.
Afkodning af de indiske rejsende
The report further identified the five cohorts of travelers in India, across business and leisure travel, and categorized each against their online research behavior:
- Hyppige flyers: Næsten 70 procent af dem bookede online, brugte kumulativt 17 milliarder dollars i 2018. De træffer deres valg baseret på bekvemmelighed, tilgængelighed, brandpræference og tidligere oplevelser.
- Budget forretningsrejsende: 86 procent af dem undersøgte online, mens kun 60 procent bookede online, brugt kumulativt 20 milliarder dollars i 2018. Denne kohorte tager deres beslutninger baseret på rejseomkostninger, tilgængelighed og konsultation blandt deres personlige forretningsnetværk.
- Experience-oriented traveler: Around 70 percent of their bookings were done online. and cumulatively spent $22 billion in 2018. They extensively research both online and offline for ‘authentic’ experiences and convenience of options; display high loyalty towards preferred brand of airlines or hotels and actively share experiences.
- Budgetgrupperejsende: 90 procent undersøgte online og 55 procent bookede online, brugte kumulativt 29 milliarder dollars i 2018. De tager flere beslutningstagere i processen og tager de endelige beslutninger baseret på minimale omkostninger.
- Lejlighedsvise rejsebesøg hos venner / familie: 92 procent undersøgte online, men kun 60 procent bookede online, brugte 6 milliarder dollars i 2018. De maksimerer familiens bekvemmelighed inden for et budget og mener, at online vilkår og betingelser er restriktive.
However, challenges remain in meeting the expectations of these travelers. Customers perceive online channels geared towards premium cohorts (frequent flyer and experience-oriented traveler), while mass cohorts, with $55 billion in spending, remain underpenetrated. There are about 160 million non-transacting active Internet users in India with only 5 percent of online travelers from Tier-2 or Tier-3 cities. There is a significant (20 percent) difference between the booking rates of premium cohorts and mass cohorts, the latter being also dissatisfied with online channels (~33 percent satisfied) vs. premium cohorts (~42 percent). The second challenge is in penetrating existing users who exhibit a marked distrust in use of online channels to make bookings, especially around payment and pricing terms and booking experience compared with offline channels. Consequently, their online usage drops between the research (>86 percent online influence) and booking phases (~40 percent offline bookings).
How travel businesses need to adapt to the needs of online consumers
The report cites five major shifts that marketers need to make to market to the online travelers – First, alleviate consumer concerns by improving the booking and payment experience to build a trusted brand and increase adoption. Second, they need to address the negative customer perception issues by mass customization to drive higher share in the segment. They also need to utilize consumer technology to penetrate mass segments (standardize, enable sharing), reach non-transactors (build offline presence), and create new user access. Moreover, they need to find innovative and frugal ways to package the experience to increase both adoption and retention. Finally, they need to create a robust digital backend to adapt to customer needs across the purchase journey.
“The contribution of travel and tourism’s spend in India has reached developed market levels, from 6.7percent of GDP in 2013 to 9.4 percent in 2018. This growth, combined with a rapidly growing internet user base and adoption of online bookings will lead to $24 billion in incremental revenues through online channels by 2021. In order to benefit from this trend, businesses need to actively increase new user adoption and increase penetration in the existing user base across the purchase journey.” Joydeep Bhattacharya, partner Bain & Company said.