India’s travel technology space has emerged a hotbed of disruptions and innovations. At the same time, the market also remains hugely untapped with considerable future opportunity for the online and offline players in the travel, tourism and hospitality space. While moderating a business session on ‘Travel Technology: Making the Future Perfect’ at the recently concluded SATTE 2022, Ashish Kumar, Founder-Start Up Mentor Board & Co-chairman, FICCI Travel Technology & Digital Committee, noted that it is already a foregone conclusion that the best CEOs of tomorrow are going to be the best CTOs of tomorrow.
Speakers on the panel consisted of Aditya Sanghi, CEO & Co-Founder, Hotelogix India; Manish Rathi, Co-founder & CEO, IntrCity; Anirudh Gupta, Founder & CEO, Tripoto and Ankush Nijhawan, Co-founder, TBO.com.
‘Technology’ Kumar said, is no more a department in the company that one goes to. “Technology is your company. If you are a CEO with the knowledge of a CTO than you are the best driver of the business. There was a time when we said, oh to be a good CEO I must be a Chartered Accountant or must be an MBA and those were great qualification to have. But today if you are rolled into a good CTO and CEO of tomorrow, you will be running the most profitable businesses. Look today and see how tech savvy and driven promoters nowadays are,” he added.
However, these changes and advances haven’t come overnight and to deliver better future value in the travel technology space it is important to understand how the changes have come about. Kumar points out to four watershed moments that have led to the travel technology market space reach where it is today.
The first was year 1999 when FERA (Foreign Exchange Regulation Act) was abolished, and FEMA (Foreign Exchange Management Act) was brought into business by the Reserve Bank of India making it possible to buy expensive outbound travel products and remit in INR which was not possible earlier. The second defining moment was in early 2000 when internet made the entry, completely transforming the way travel business was conducted and today what you see is the result of that defining moment.
The third defining moment was the removal of airline commission from 9 to 7 to 5 to 3 per cent and then to zero bringing a fundamental shift in travel industry’s approach that they are not working for the airlines anymore, but for the customers and that their services to the customers need to be charged, especially in the light of zero commission regime. And the fourth and last key defining moment is Covid. “It is very difficult to make people change. People don’t change because they want to change. People change because they have to change, and I think Covid is driving that change. Covid has now already been the chief technology and the chief transformation officer in this space. Whether it is artificial intelligence, virtual reality, augmented reality, payment by bitcoin; these are again no more topics of discussion. It is only a question of when and how, and how fast we can adopt into our daily life,” said Kumar.
He also drew attention to the fact that given the Covid uncertainty the next couple of years are given and invited panel to do some futuristic crystal ball gazing in the travel technology space, especially around how and where the industry be in the medium term by around 2030 and in the long term, by 2047 when India completes a hundred years of independence. Ashish said that the long-term vision can be aligned with the Government of India’s vision of ‘digital tourism roadmap’ driven by IT and Tourism ministries and these vision documents can be rolled out anytime soon.
Market & Opportunity
There remains huge opportunity in the travel market space for innovation and disruptions. And talking about that TBO.com Co-founder, Ankush Nijhawan argues that there is huge potential for all kind of players in the travel market space. He drew attention to the big travel industry economy worldwide that many big and small travel players and businesses can chew from across online and offline travel platforms. “The market size is so large. US$ 9 trillion is the size of the travel economy in the world. The largest players in the world control 5 per cent which is Expedia. Where are the rest? They are with OTAs and offline travel agents,” Nijhawan said drawing attention to the huge market and opportunity for the stakeholders.
A leading tech driven long-distance travel enabler in India helping the asset owners (Bus owners) get a better value off their assets, IntrCity is leveraging technology to provide easy and seamless travel to travellers in the country. Rathi, it’s Co-founder, while highlighting the opportunity in long distance road travel by busses, pointed out that there are primarily two modes of transport available for the ‘majority’ of Indians and those are trains and busses generally costing about an average of Rs. 2 per kilometers vis-à-vis air or private taxis that comes at an average cost of about Rs. 15 per kilometers and therefore have limited reach unlike trains and busses.
New capacity addition in travel trains have not kept pace with the growth in travel, whereas the Indian roads have seen significant investment in road infrastructure probably making India the fastest kilometers adders in roads in the world. “Average distance travelled by long distance trains comes to about 600-650 kilometers whereas for the bus it is around 400-450 kilometers. If roadways are growing, we need to extend the reach of the busses too. That’s where we see technology coming in to play a bigger role. Busses have their limitations but if you can enhance the value of those busses to travel longer distance, provide better comfort, better services, we believe that people will have to move across to the road travel more and more than train travel because train is not going to take across the capacity at which the travel is increasing in India,” stressed Rathi.
He further added that the technology comes to play in making sure that the safety, punctuality, security, services on the busses are very well monitored. “That’s where technology helps us a lot. These are the technology which will typically be generally adoptive by the new generation,” he added.
Pitching technology as an engine of growth in the travel space, Tripoto’s Gupta pointed that the number of consumers who are buying on e-commerce sites are four to five times bigger than the number of consumers that are transacting online directly for travel products. Tripoto is a consumer internet company that boasts of being India’s largest travel community.
“If you put this into context, then travel was actually one of the first industries which went online into e-commerce with air ticketing. So, you understand the gap. Large part of travel market is still offline. And it’s not that these consumers don’t want to buy online because they are already buying online for various electronic products and other stuffs, but the same penetration has not reached travel. It’s not the consumer that is at fault here. As travel industry we need to see that there is a big market of consumers that we are losing that wants to transact online and are not able to. How do we, as an industry, grow and tap into that segment. That I think is an immediate area technology can be used by travel industry and travel businesses,” added Gupta.
Kumar draws attention to the humongous market, and hence opportunity, that has developed beyond the major metros. He says that look at the landscape ahead and we find a very fragmented customer chain. “Our customers are growing from Bilaspur to Bombay. Earlier everybody would be clear that the customers were concentrated in Delhi, Mumbai, etc. But now he is vernacular. We have seen television channels suddenly mushrooming into Hindi, Telegu and all the channels. That has not happened for the love of the language but our advertising bucks. This industry needs to define that there is a vernacular adaptation. There is a reach which is very scattered of the customers,” Kumar noted.
He however also insisted that the travel products are also no less scattered and unorganized. “I have not come across a product chain which is more scattered and unorganized than in the travel industry. There are consolidators but these platforms are still missing a lot of travel suppliers. We have a humongous challenge ahead of us,” he said.
Future Perfect
A technology supplier to the hotels, Sanghi said that even if we look at 2047, we have little time for soul searching if we want to bring in technological change. Citing example from the sector he serves, Sanghi said that the hoteliers and developers are quite clear about their spendings on construction, interiors and stuff like that, but there is no convincing answer when asked about technology.
“If we want to make an impact of a delta change and not a small incremental change, the technological make to our businesses, to our customers’ life and the travellers who stay with us; we need to first change our mindset as to how do we look at technology. Whether as a strategic and integral part of our business or do we continue to look at technology as a tactical solution to the problem that we face. These are two different ways of looking at technology. What I am trying to say is that technology has to become an integral part of the roadmap of your hotel business for it to be valued enough to make a sea change in the way it can impact your business,” stressed Sanghi.
The Hotelogix founder also drew attention to the ‘value’ that is put to technology. “Technology is not cheap. To develop good technology is expensive. That is the reason we see the hoteliers in the US are far ahead of the rest of the world when it comes to technology because they understand what investment in R&D means,” he noted.
Gupta suggested that technology is very expensive to build, and businesses should look at partnering and piggybacking players who have the technology. “There will be some players and businesses who will build technology, at the same time there can be a lot of partners who can leverage that technology to accelerate their business and not necessarily build the technology themselves to grow faster. You can piggybank on other companies or platforms that are building technology that can help you grow faster. I think a lot of businesses could take that route and will take that route because it is faster and more efficient. Why build it when someone ese has already built it, unless you have big ambitions of building technology in a big way and have that lifecycle of five to six years where that money is returned to you.
Market Dynamics
Irrespective of technological innovation, disruptions and ingenious new start-up, there are also market dynamics at play which determine their own course. And Nijhawan while hailing technological advances in travel space also draws attention to practical challenges and ever evolving market dynamics that demand interventions often traditional and beyond technology.
“Look at the practical problems. People are complaining about not getting the Visas. Who is going to fix that problem? You can’t even fix a VFS appointment. Also look at the Covid situation. Many customers have suffered, and their FAQs (Frequently Asked Questions) today are not simple FAQs but some very poetic questions, like, ‘if this and this happens what will happen?’ or ‘when this happen what will happen?’ No tech companies in the world is going to answer that. And as I am seeing the shift, it is suddenly coming back to the agents again,” said Nijhawan.
He further drew attention to some other practical challenges in Visa, payments, trust in services of the suppliers that consumers don’t know or have never met. “There are many dots in the whole puzzle which needs to be joined before you make every transaction seamless. Last few years everybody has evolved. Today everybody is asking that can I have an API, can I have the white label and six years ago we used to search people to take our API. So, is everybody searching at tbo online? Absolutely Yes. But is every transaction still happening online? No. I think it will take time for 100 per cent transaction to happen because there are so many patches and the roadblocks in the middle.”
“My take is,” said Nijhawan, “Practicality and technology will go parallel that way and I think the practical part is a big challenge right now for us to solve not because of technology, but because the ecosystem is such that it is very-very problematic at the moment.”
Way Forward
While concluding, Nijhawan stressed the need for “Constant innovation and adoption” as the key to success for everybody. “People should be very open minded in adopting technology and continuously evolve it. This is something that gives me sleepless night because I don’t know who is going to build the next tbo and out beat me. This is where everybody needs to be on the curve, everybody needs to adopt and make sure that they are adopting this in their daily life,” he said.
Gupta also suggested taking advantage of technology to create more value for once time spent at work. “How can I use technology to put in the same effort, but make more revenue or reduce my effort? How can I increase the value of my own time? Can I make decisions faster? Can I close a ticket in two hours instead of a day due to technology so that I can generate more output in a month? My sales team work on five queries a day. Can I make them work on ten queries with the help of technology that can reduce my cost? Once we start incorporating the cost of our time into the business then we will realize the value of technology and how it can help us grow our business. That’s how we should think of technology and integrate technology and business together,” Gupta said.
Hotelogix’s Sanghi prompted stakeholders to be pro-active if they want to leverage technology to their best of their advantage. “We can’t say that today pandemic has happened and hence we should have contactless technology. Or, oh, I am facing problems with my rooms’ distribution so now I should have a channel manager. It doesn’t work like that. It is all retrospective fittings to problems that you face. That means you are using technology as a tactical solution to your problems. Let’s look at technology as to how you want to imagine your business in order to use it to either drive your strategy or to at least enable your strategy. We need an architectural or soul change to look at technology that can change our lives.”
Reflecting on his one-line research outcome on the word ‘technology’ from across different online/technology platforms, that is “Technology is a continuously developing results of accumulated knowledge and applications in all techniques, skills, methods and processes used in production and research,” Kumar said and added that there has to be a continuous and ongoing development in technology platform. “It should be a concentration of all the knowledge and experience acquired over the years,” he said.
