Travel Industry: USD 36 bn, 7.5% expected CAGR over next 10 years
► Travel Industry*
is playing an increasingly
important role in India’s economy :
►
1.9% is the direct contribution of total Travel industry
to India’s GDP
►
5% contribution to total employment
►
3.8% of total exports was from Inbound tourism
(~USD 14.5 bn )
►
5.1% of total investment was in Travel(~USD 23 bn)
► Domestic Travel to be the primary growth driver:
~82% of Total Travel
► 74%
of Travel is Leisure travel, expected to grow
by 8.6% in 2012
► 26%
of Travel is Business Travel, expected to grow
by 4.1% in 2012
Source: India 2012 WTTC, IBEF
*WTCC definition of Travel includes: Domestic
expenditure +Inbound tourism + restaurant&
leisure industries+ govt. spending+ capital
investment
India is the second largest Travel Market globally after China, largest
contributor to employment
Source: India 2012 WTTC, IBEF
Travel: Poised to Sustain Growth Momentum
1
Demand Growth
► Increasing per capita income and a
rapidly growing middle class:
► 160 mn people expected to grow
to over 267 mn by 2016
► Favorable demographics: Over 50% of
the population under 25 years
► Domestic as well as outbound travel
2
3
Increasing Investment
► T&T attracted capital investment of
►
INR1,253.9bn in 2011 (~USD 23 bn)
► Expected to rise by 12.3% in 2012
(~USD 26 bn); ~5.3% of GDP
► Rise of 7.5% pa is projected over the
next ten years to INR2,903.9bn in
2022 (~USD 53 bn)
►
►
to increase due to:
► Increased affordability as a result
of increasing disposable income
► Availability of attractive tour
packages
► Increased affinity towards leisure
►
Policy Support
Innovative campaigns
launched to attract tourists:
Incredible India and Athithi
Devo Bhavah
100 % FDI allowed in hotel
and tourism sector
USD 648.5 mn sanctioned
during the 11th Five Year Plan
for 991 tourism infrastructure
projects
CAGR of 15.4% over 2005-11
in Govt. spending on T&T
(USD 1.6 bn in 2011)
travel
Source: India 2012 WTTC, IBEF
Favorable demand, improving infrastructure and investments to drive T&T growth
Retail Travel : 33% of Travel is Online, Online growing
much faster than offline
► Online
travel share has been steadily
increasing: 23% in 2009 to ~33%** in
2012
► Online travel penetration (33%) is
ahead of China and Japan;
comparable to US (38%)
► Online Travel market grew 3x
compared to the overall market in
2011 viz. 23% vs 8%
► 23%
growth projected during 2012-13
– USD 7.3 bn (‘12) to USD 9 bn (‘13)
► Online travel drives >85%
commerce in India
of e-
Travel Market Segmentation
Suppliers Website v/s OTA
Online Travel Future Growth Engine: Hotels, Bus, Car rentals
2012 Retail Travel Industry Split
USD Bn
2012 Total
2012
Online
Online
Penetration
Online
Split (%)
Air
9.3
3.9
42%
54%
Hotels
5.9
0.8
13%
11%
Rail
6.0
2.5
42%
34%
Car Rental
0.7
0.1
13%
1%
Total
21.8
7.3
33%
► Air ticketing
continues to be the
largest segment (54%) followed by rail
( 35%)
► Newer categories
like hotels, tour
packages, bus and cars have higher
margins, low online penetration and
are going to be the drivers for the next
phase of growth
► Supplier
Bus
8
0.2
2.9%
branded sites accounted for
64% of the total market led by Indian
railways and low cost carriers
► However, OTAs to
grow fast by
focusing on the new high growth
verticals
Source: Phocuswright; Internal intelligence
Turbulence in Travel Market: Driven by issues facing the domestic
airline industry
►
►
►
►
Air continues to be the largest travel category – both online and
offline
2011-12 has been a challenging year for air growth:
►
Passenger traffic declined by 0.9% from Jan - Sept 2011 to Jan - Sept
2012
►
Gross margin under pressure for travel companies because of increase
in monopoly of airlines
However online air growth has remained robust at 25% in 2011
and expected to be 22% in 2012 to USD 3.9 bn
USD Bn
Total
% Growth
Online
% Growth
Penetration
2009
6.3
1.8
29%
2010
7.8
23%
2.6
41%
33%
2011
8.4
8%
3.2
25%
38%
2012
9.3
11%
3.9
22%
42%
2013
10.5
13%
4.9
24%
46%
Domestic Air Passenger Traffic
Steady increase in online air penetration : from 38% in 2011 to 42%
in 2012 end
Challenges facing the airline industry
►
Air Market: Total & Online
(0.9%)
Supply constraint: Grounding of majority of Kingfisher’s fleet,
long duration strikes by the National carrier
►
Spiraling jet fuel prices and consequently hike in fares resulting in
stagnant /decline in passenger traffic growth
►
Rupee depreciation slowing outbound travel
►
High debt burden and operating losses for majority of the Indian
carriers
Source : Phocuswright, DGCA
Turbulence to be Overcome by policy changes and shifting focus
to new growth verticals
Revival of Domestic
Air
►
►
Incumbents to increase supply: from 385 to 522
aircrafts over the next few years; will ease out the
demand supply mismatch
►
49% FDI by foreign carriers approved, potential
funding for cash strapped airlines
►
Increased supply and competition from new
players will reduce monopoly of existing suppliers
►
ATF imports allowed, airline operating costs to
reduce
►
Opening of bilateral rights to all domestic carriers,
will lead to better seats utilization
►
New Verticals
Growth
Investments for up gradation / creation of new
airports
Source : Phocuswirght; KPMG Background Paper on Indian Aviation, news articles
Key Verticals to drive future growth
►
Hotels
►
Holidays / Packages
►
Bus
►
New verticals: Car rentals
►
Higher margin categories, focus area for all OTAs
►
Characterized by low online penetration,
increasing trend to move online: enough
headroom for growth
►
Categories like bus and hotels are highly scalable
and huge standalone verticals for growth
Goibibo - 2012
Goibibo 2013
Our Focus Areas
Goibibo on all mobile platforms
Goibibo mobile experience :
Fast, easy & seamless
Goibibo Hotels
Hotels@yourprice – mobile only app for hotel bidding
Bus on mobile
Ladies seat
Tools On Mobile
Mobile Sync with Web
Weather forecast
Fare Trend
Improved Home screen
Travelers' list
Improved Bus UI
Native xpress payment
Notification Dashboard
Travel Checklist
IOS Passbook
Hotels : new platform
One
search Box
Map
view
Compare,
short list
Revamped
Superior
content
Map View Booking
Inventory management platform for Hotels
Goibibo Wallet : First of its kind
All refunds,
discounts,
loyalty points –
All in one
encompassing
wallet
Goibibo : Fastest value proposition : Upfront
Thank You