Indian online travel players hit accelerator....again!

The Indian online travel industry seems (in market designed to produce mixed metaphors) to burst in waves. Back in 2008- the four leading companies of India - Makemytrip, Cleartrip, Yatra and Travelguru seemed to have created a $2bb plus online travel market from a near standing start.

In their recent India report, PhoCusWright now puts the 2010 online travel market (leisure and un-managed business) at more than double 2008. $4.3bb is their size estimate, as much as 25% of the total travel market. They predict a rise to $7bb in 2012 (you can buy the report here). That would put the India of 2012 at the same size as the online market of Australia in 2010. An almost unrivaled acceleration in online travel. Like many markets online, the buying of low cost carrier tickets is a huge driver. But, unlike many markets, rail is a significant part of the grow story in India. Online rail in India is already more than a $1bb a year and is more than a quarter of the online travel industry's total turnover. In India (according to PhoCusWright), the percentage of rail online is twice the percentage of hotel online.

Corporate activity is accelerating alongside the market acceleration.

Number one player MakeMyTrip (MMYT) has been public for less than a year (IPO in August 2010). They went to the market at $14 and are still trading above $30 (Apr 21 at $32.23) with a valuation in excess of $1.1bb.

Cleartrip is chasing hard. They have just raised $40 mm from travel travel expense and management solution provider Concur (you remember them, they bought TripIt in Feb for up to $120mm).

Not to be left out, a day later Yatra announced they were raising $45mm from raised from Valiant Capital Management, Norwest Venture Partners, Intel Capital and others (WSJ story here). According to the WSJ this eclipes the $33.8mm they raised in the last round. The article quotes sources saying that a float in the next 12-18 months is very likely.

Expedia is also refusing to be left out. They have added India to their list of markets covered by their JV announced with Asian low cost carrier giant Air Asia.

Via is trying to argue there is room for more players. With $15mm raised so fare from NEA Indo-US Ventures, Sequoia Capital India and others, Via (also known as Flightraja) has mega bucks in their sites announcing last month they intend (emphasis on intend) to raise another $100mm.

Travelocity are trying to peek their head above the noise through a marketing relationship with Mastercard.

A very busy 30 days in a fast growing market. Did I miss anything? For the Tnooz latest list of top travel sites in India care of Hitwise click here.

Thanks to FriskoDude for the great photo via flickr

Cleartrip CEO : 15 months in the black. Targeting hotels, display advertising and Dubai

Cleartrip may be the smallest of the big 3 (ok medium 3) of the online Indian full service OTA business but Founder & Director, Product and Strategy Hrush Bhatt is far from worried. During a coffee break chat at eyefortravel TDS in Singapore last month Hrush told me that he is not taking being number 3 too hard. In fact he is celebrating the size difference. He tells me that although MakeMyTrip may have 1,300 employees to Yatra’s 8-900 and Cleartrip’s 260 Hrush is unworried having reported his 15th month in a row of profitability.

[UPDATE - since publishing this post I have been told that Cleartrip is bigger than Yatra and the clear number two to MakeMyTrip. I don't have numbers to confirm but it clear that the battle has only just started]

Air is still a critical part of the business but like much of the online world he and Cleartrip are targeting hotels for growth. Again like much of the online travel world he is using some creative hiring practices to help Cleartrip get there. Cleartrip have hired the founder of the Travelguru to lead their hotel contracting efforts. Travelguru was bought by Travelocity in August 2009. Current hotel count is 1,400, when it gets to around 1,800 to 2,000 Hrush says that Cleartrip will begin a marketing push.

I was interested to hear that one of the main marketing efforts for Cleartrip was display advertising. After each of Yatra, MakMyTrip and Cleartrip reached a “gentlemen’s agreement” to not bid on each other’s brand terms in search advertising it freed up a lot of marketing spend to invest in display.

This is not the only way that the Indian market has a different twist to emerging online travel markets. While India maybe smaller than the more mature Asian online travel markets Japan and Australia the target population have been online since 1996. That means by the time online travel started to take off in India in 2006, the population had already been online for ten years, allowing for speedy growth and rapid adoption. PhoCusWright reported this week that the 2009 Indian online travel market was US$3.4 billion (Indian Online Travel Intermediary Review).

On functionality, Cleartrip have taken a Kayak look and feel approach to travel (as opposed to the more traditional OTA look of MakeMyTrip). This is deliberate according to Hursh. They are looking to new approaches to travel search, targeting the image lite Google like approach of text boxes.

Hrush is also looking to expansion beyond India. Cleartrip.ae is now live and targeting consumers in Dubai. Not a traditional place of expansion for an Asian online travel company but in Hrush's view Cleartrip already have some awareness and it is a small enough market for Cleartrip to test expansion

Want to read more on Cleartrip? I was not the only one to catch up with Hrush in Singapore. Check out Siew Hoon's piece called "Cleartrip out to make the world smaller".

MakeMyTrip in India - US$5mm in profit off $500mm in gross bookings

Came across an post today called "MakeMyTrip.com: The Story of Online Travel Booking Startup" on the WorkHomeMoney blog. Is an interview with MakeMyTrip founder Deep Kalra. MMT is the biggest of the four local OTAs (other three are Yatra, Cleartrip and the now Travelocity owned Travelguru).

Assuming the quotes are correct there are some interesting size and performance metrics in the post.

"1. Makemytrip.com is now making $5 million in US dollars of profit this year.
2. The gross booking reached about $500 million.
3. Revenues are up 88% during the recession.
4. One-out-of-every-twelve domestic flights in India is booked via MakeMyTrip.com.
5. It sells 2,500 of railways tickets (the second largest category in travel) every day."

Other facts from the post I did not know is that MMT have 20 physical stores

For more background info on Indian market see my post from last year here.

Also Interview with Travelocity/Zuji regional boss Roshan Mendis on Travelguru acquisition here.

Zuji boss Roshan Mendis on Travelocity buying Travelguru

Ease of adjustment in logo colours is never a factor in an acquisition but it has not taken long or much design work to add a few Travelocity stars to the logo of the newly acquired Indian online hotel player Travelguru. Thankfully they avoided the branding redundancy of adding the Zuji tag line of "your online travel guru".

A week or so after the purchase by Travelocity/Zuji of Travelguru I had a chance to sit down (virtually) with Zuji boss and Travelocity regional head Roshan Mendis to talk about the deal, the Indian market and regional plans generally. Roshan took over from former Zuji boss Scott Blume in June and now has a portfolio of brands to manage including Zuji in Australia, Hong Kong and Singapore , Nextour in Korea, Travelocity in India and New Zealand, and now Travelguru in India. [note that the Travelocity owned brand of Lastminute.com does operate in Australia and New Zealand but is not owned by Travelocity. Instead the business operates under a franchise structure wholly owned by the Wotif group].

Roshan is very bullish about the acquisition, as he should be for something he has likely just paid tens of millions if not a hundred or so for. He feels the Indian market is at the right time for acquisition and expansion. But he is also upfront that the deal is not without risk. He admits that integration will be a challenge especially on the people front.

Here is some more detail from our interview

BOOT: This acquisition was your first big move as the new regional lead for Travelocity. Why India and why this company?

Roshan : Couple of reasons. We see India as a top three market in region. Looking ahead to 2012 – research indicates will be right next to China, Japan and Australia as top online travel market. In addition the OTA, general market and accommodation market growth rates in India are attractive. But it is still an emerging market. So this is not a deal without risk.

BOOT: you have plenty of competition to contend with. Expedia is in India and the local big three - Cleartrip, Makemytrip and Yatra are very aggressive.

Roshan: Absolutely – big three make up 80% of market. Competition is stiff and irrational at times. Certainly attractive bits in online space but domestic flights are unattractive and that is where competition is most fierce. Looking to compete differently through Travelguru.

BOOT: Will you bring the supply facing teams together?

Roshan: Putting integration plans together now. The Intent is for a unified partner marketing [Travelocity name for supply team] to represent Travelocity India for all brands.

BOOT: I read there were a lot of challenges in integrating Travelocity and Lastminute supply operations in Europe, are you concerned about the integration task here?

Roshan: I won't comment on the Travelocity and Lastminute integration but generally acquiring and integrating a company particularly on the people side is not a small job. [We are going into the integration effort] with a common purpose and goal between Travelocity.co.in and Travelguru. [Including] clear expectations in leadership between the two. Under no allusions that going to be a cake walk putting people, processes and culture together.

BOOT: In the press release Travelguru founder and CEO Ashwin Damera, said "he was excited with the deal and would want to replicate the story in other Asian". Tell me more about this idea?

Roshan: Purpose of the deal and intent is to focus on India and make success in India – over and above that – the model might work in other market but don’t think that is where short term effort will be.

BOOT: Ram Badrinathan of PhoCusWright asked this question in his blog post "Travelocity Acquires TravelGuru—Will it Change Anything in India?" [Will Travelocity] back TravelGuru and Travelocity with at least a $2.5 million annual marketing budget (to build the brand and business)?

Roshan: [regarding the marketing plans of Travelocity and Travelguru in India] past behaviour is the best indication of future behaviour. If you look at Travelocity.co.in, it is has grown in last few years. [On marketing we are] very analytical and invest in those channels that allow for growth and maximise profit. [BOOT I took this to mean a focus on online channels rather than offline spend]

BOOT: At last year's TRAVELtech your predecessor Scott Blume said that Zuji was firing in Asia on "most" cylinders. "when one country is firing, other aren't" he said. You have a large portfolio now in Asia. What are your plans for firing on all cylinders?

Roshan: In our portfolio in AP have a number of assets and they have certain kinds of potential determined by size of market, size of online pie, balance between supply.com and intermediates etc. Different expectations for the different markets and invest in those markets according to our expectations on what it should and can deliver. [delicately keeping with the analogy] We have a set of cylinders that are not the same size and horse power. Need to recognise and pump with the appropriate level of fuel to achieve the maximum potential. We take a portfolio view – have a place and role for each asset in the portfolio and will support to meet full potential.

BOOT: Finally - what worries you? What things do you want to make sure you get right?

Roshan: The acquisition. Lots of things to determine success of acquisition. There are social and economic events to keep track of as well as the maturity of the space, consumers, online penetration etc.

What do you think? Bold move? Too soon? Wrong market? Right time?

PS - looks like we can finally kill off the rumours of Expedia's investment in Travelguru

Rang7 - the Opodo and Orbitz launch model comes to India or is it a fake marketing trick

One of the disadvantages of being a blogger is that I do not have the time to call around to confirm a story. This is one where I would love to have the time to do some Kevin May style investigative work. But I am a working blogger so it is time to pass on a rumour that it interesting either way

Two versions of this story floating around.

Version 1 - Airlines are coming together in India to fight back against makemytrip, yatra, cleartrip and travelguru.

Intial report from Pluggd.in that Indian carriers Spicejet, IndiGo and Kingfisher were to combine with $3mm in funding to launch a full online travel agent (OTA) called Rang7. The source was a press release picked up on IndiaPRwire. I saw it on twitter via a RT from @santoshmaharshi. Was a great story because it immediately brought to mind more parallels between the emerging online travel market in India and the history of the industry's development in the US and Europe. It mirrored the launch of Orbitz in 1999 in the US (backed by American, Continental, Delta, Northwest and United) and Opodo's launch in 2000 in Europe (backed by Aer Lingus, Air France, Alitalia, Austrian Airlines, British Airways, Finnair, Iberia, KLM, Lufthansa and Amadeus). Orbtiz has since shed it's ties to the airlines (NYSE:OWW) and Amadeus has taken majority control of Opodo.

The Economic Times of India has picked up this version of the story.

Version 2 - Whole thing is a possible PR scam

Pluggd.in then did an update to the story and quote "industry sources" as saying that the the airlines have not participated and they can't get an independent verification of the business being owned by the airlines. The About Us section of their Rang7 site is not very helpful (or maybe it is) as the founders link points to a completely blank page.

If this version is true then an OTA has kicked off its business by misusing the names of three key suppliers - not a great launch strategy despite the buzz it might generate. That said, nothing has been heard directly from the founders (though they do have a blog other here).

My guess the airline JV spin is a fake (or has gotten ahead of the deals being signed). Anyone out there heard anything?

note - Orbitz disclosure in the form of my linkedin profile.
General disclaimer and disclosure

WebInTravel & PhoCusWright: See me, Philip Wolf and Ram Badrinathan in action

If you are looking for a prelude to PhoCusWright here is a link to a thirty minute video of me (Tim Hughes), PhoCusWright CEO Philip Wolfe and AP Head of Research Ram Badrinathan talking shop at the recent WebInTravel conference.

We cover a number of topics including:

• Google - is there a conflict between designing a site for Google and designing one for customers?;
• Asia - is there such a thing as an Asian strategy?;
• UGC and Zero percenters - how to manage UGC and the zero percenters?;
• Economic swings (and crash) - will it kill you, what should you do?; and
  
• India - just how big a market is it?

Great session (but I'm biased). Watch it here.

WebInTravel: Makemytrip and Yatra talk India online travel with PhoCusWright – very dismissive of Expedia and Travelocity

Ram Badrinathan of PhoCusWright hosted a panel at WIT this year with Yatra CEO Dhruv Shringi, Makemytrip CEO Keyur Joshi and Phanindra S the CEO of online bus ticketer RedBus.

As Ram described it, India is just entering Web version 1.0. This is characterised by similar concepts we saw in the late nineties in the US and Europe:

• lots of start up and entrepreneurial activity;
• focus on flights; and
• commission driven business (rather than media or merchant model).

However, there are a couple of big differences in the Indian version of Web 1.0. A couple of highlights:

• Air is not the only transport game: While flights are the high profile business to look at, there is enormous activity in ground transport – rail and road. RedBus claim 20% of the bus market is now booked online. Indian Railways in the largest online travel business in Asia (according to Ram) measured by transaction numbers. However in both cases the average booking value is very low – measured in the tens of cents;
• The OTAs and LCCs play nice: Unlike the battles in Europe and the US between low cost carriers and the online travel agents, in India OTAs such as Makemytrip and Yatra are critical to the distribution of LCC inventory. According to Ram’s research, 10-15% of the low cost carrier volume in India is coming through OTAs.
• Localised but English: When western companies expanded across Europe the key guideline was to localise as much as possible – language, look’n’feel and product. In the case of the Indian OTAs the best way to reach the target market of middle class Indians is to keep the product in English, not in one of the many local languages. This is not true for the lower booking value RedBus but very true for the full service providers; and
• Hotels need dramatically more technology support: It took a long time and arguably the economic after effects of the 9/11 attacks for hoteliers in the US and Europe to be convinced of the need for online distribution. The barrier was to convince them to join the channel, the barrier was not technology. In the case of the Indian market technology is an issue. Indian hotels tend not to have the CRS, PMS and Internet connected architecture that you expect to see in a US/Euro hotel. Yatra are approaching this problem by building a property management software suite and giving it away to hotels. Naturally it comes with means to connect to Yatra but the suite also stands alone as a property management system (according to Yatra’s Shringi). Nice idea.

The local players are not alone in exploring Web 1.0 in India. I asked from the audience what impression Expedia and Travelocity where making in the market. Both recently launched in India with localised approaches (in English) that match the expansion approach each has adopted in Europe.

Yatra’s Shringi and Makemytrip’s Joshi were dismissive of these efforts by Expedia and Travelocity in India. They very confidently claimed victory for the big local players (I presume including Cleartrip and Travelguru) over the global giants. When I put this to Jens Uwe Parkitny of Expedia later in the day (new Managing Director-Distribution, Asia Pacific), his quick reply with a smile was “that is exactly what they [competitors] said when we entered Germany and France”.

What’s next? If the trends of Europe and America apply then we should see the large local Indian players move into hotels and cross sell, frenetic consolidation and investment activity, PPC cost inflation and the arrival of the of the media model. Fun times ahead.

FYI - Ram has just published a very good report on the Indian market for PhoCusWright (costs money).

Airline Revenue Management in India - one price to rule them all

I have been enjoying my regular email and phone exchanges with Ram Badrinathan of PhoCusWright on the online travel market in Asia. Our last few chats have been on the Indian travel market because 2008 has been such a boom year for the industry there and he recently put together a special report on the region.

Yesterday he sent me through this fascinating screenshot from a Cleartrip flight price tracking graph. It shows over a three week period the prices for flights from Mumbai to Chennai. The different colours show the different airlines (ie Black is Spicejet with the cheapest price and Red is Magenta is Kingfisher with the most expensive).

The reason this is fascinating is that there is virtually no change in price regardless of the departure date. Each of the airlines has effectively set themselves price for the flight regardless of day of week, day of departure, competitors price or days out from departure. Revenue management has been thrown out the window and replaced with a single price strategy. Badrinathan contrasts this to October 2007 when he was putting together his report. During this time he noticed wild variations in pricing including dramatic decreases in price the closer customer's booked to the date of departure. Clearly the industry is trying to find a strategy to mitigate against the exploding costs of fuel. It has swung from constant and almost irrational change to no change.

You have to believe that the best strategy for an airline to survive staggering fuel costs would be to improve and increase revenue management activity rather than to adopt a one price to rule them all approach. Thanks to Ram for sending this through.

Expedia and TravelGuru - the deal is going to happen

A post yesterday on Expedia investing in TravelGuru was followed up by an update with a very undenial worded denial from TravelGuru. A source tells me that both parties are deep in negotiation and have either signed or are at least sharpening the pencils and lining up the celebratory streamers. Still no word on final valuation number but we can assume that the eLong experience is driving Expedia to be very conservative.

A deal is never over until the fat lawyer sings but if rumours are right then I can hear the light sounds of legally trained vocal chords warming up.

Rumour - Expedia buys into India with $17million investment in TravelGuru - is there a scary eLong parallel here

contentSutra has a story (in conjunction with VCCircle) that Expedia has spent $17mm to gain a stake in the number four indian player TravelGuru. Intial reports put the valuation at around $30 million giving Expedia a majority stake. An update in contentSutra puts the valuation at closer to $75mm - though the headline still claims that Expedia has a majority stake.

UPDATE - CEO Ashwin Dameria has written to Medianama.com with the following comment

I’m disappointed that mere speculation is being published in the form of a “story”. Many people have called me based on this hearsay and what they have read online.

There are many inaccuracies in these reports – the biggest being – there has been no deal signed! (my emphasis)

What more is there to deny?

Warm regards,

Ashwin

He does not say "no negotiations are under way" or "no chance". Rather says "no deal signed". Assuming there is a deal - here is my analysis.

I did a background piece on the India market a few months ago. In researching that piece it became clear that TravelGuru was very well funded - having raised as much as $25mm from Sequoia and Battery. First round was $10mm with just Sequoia and then a combined Sequoia and Battery second round of $15mm. TravelGuru has used some of this to do acquisitions of their own picking up Desiya for around $25 mm (Rs. 100 crores). While well funded and used to acquisitions, the research put TravelGuru in fourth place in the market with around $80mm in TTV planned for 2008 (up from $42 in 2007). This puts them behind Makemytrip on around $280 TTV, Yatra on $210 and Cleartrip (>$100). More in this post here.

I am trying to understand this play by Expedia. Using acquisition as an market entry technique is not typical Expedia behaviour (on the leisure side). Of course in France there was the original joint venture with SNCF and there have been a string of investments by TripAdvisor. But the entry of the Expedia brand into a market has usual followed a organic path of launch hotel/destination services while the air engine is localised. Then a year or so after brand launch they bring on the air engine and ramp up the marketing. In the case of India with have the hotel only launch of Expedia.co.in and then four months later the investment - but not full buyout - of a local player. The obvious and scary parallel for Expedia is their entry into the Chinese market through a majority investment in eLong (August 2004). This has proven to be a disaster for Expedia. eLong is onto its third CEO since the investment (fourth if you include the interim work of Expedia Asia Pacific President Henrik Kjellberg) and the stock is near a two year low of around $7 only just above the investment price of $6.21 (though it would be fair to say that I should keep comments about poorly performing online travel stocks to a minimum). Much like eLong and its market standing compared to ctrip, TravelGuru currently lives in the shadow of larger rivals.

It has taken Expedia 4 years to ready themselves for another part investment in an emerging market. I am sure they are hoping that they have learnt a lot from the lessons of eLong.

Just a rumour at present as the CEO TravelGuru Ashwin Dameria has (sort of) issued a denial. Either way - the Indian market is continuing to heat up.

In India the $2billion online market is creating an industry: discussing India online with Ram Badrinathan of PhoCusWright

I have been meaning to write for a while of my experiences in India. Readers will know that I traveled to Bangalore for work last month. My work visit there was around operational activities but I took it as a chance to think about the state of the online travel market in India.

I went there knowing that money was flowing and entrepreneurial spirit was flying around online travel. You only need to look at the last few months of deal announcements to get a feel for the level of activity.

Makemytrip (the number one player) has a new engine and claims to be hitting break even at the end of this year. This is off the back of some $40mm in funds raised, US$280mm in gross bookings and a claimed 45% share of the OTA part of the market according to CEO Deep Kalra (who is already talking up IPO plans);

Yatra (founded by ex-Ebookers Dhruv Shringi (CEO) and Manish Ami) raised money from Reliance Capital, Promod Haque’s Norwest Venture Partners (NVP), and the Television 18 Group (story here). Now there are stories of them combining with the Indian unit of Carlson Wagonlit Travel to try and acquire its Kuoni’s Indian business travel arm, Hogg Robinson Sita. They are claiming US$210mm in gross bookings;

Not to be left out of the PR war – Cleartrip CEO Sandeep Murthy is claiming that Cleartip is the “leading OTA in India” on the back of a usability and user friendliness survey from a research organization. They also recently raised more money ($18.5mm) from big names Draper Fisher Jurvetson and Mahindra Group. Makes a total of $30.2mm raised to date; and

Travelguru went on the acquisition trail – picking up Desiya for around $25 mm (Rs. 100 crores). Is aiming for break even in 2008 also on the back of $80mm in TTV ($42mm last year)

Additionally these companies are trying many creative and different things to the established “old world” online travel companies. Ideas like:

• COD bookings to combat low credit card penetration;
• marketing campaigns around rebating customers if flights are delayed; and
• trying again and again to find a way for mobile bookings to work.

I often think you can also tell a lot about travel by simply looking at the media (newspapers, television, outdoor) and looking for agents in the street. Other than one outdoor advertisement for a tourism college and the appearance of a travel agent and tour operator in a five star hotel in my first four days in India I did not see a single mention of the travel industry. Not an ad for an online or offline player or supplier. Not a single agency. Not a hint of travel experience and or a drive by the population to look for ways to spend their travel Dollars/Rupees. It was only on my final day that I came across three separate travel ads in the one edition of the newspaper (presumably the weekly travel edition). All three were online players including a wrap around from MakeMyTrip. Here is a market with a billion plus people, fast growing economy, faster growing middle class and more low cost carriers that anywhere else in and yet I can only find the barest hint of a travel industry.

I discussed with this Ram Badrinathan of PhoCusWright before I left. He has been working on a special report. Badrinathan put this phenomenon in the simplest of terms. “This,” he says “is because travel as a category simply did not exist in India.” He goes on “the reason the online travel category is exploding is because the whole category did not exist before”. There are no nation-wide offline agents for the online industry to compete with (like the big four have taken on Amex in the US, or Webjet has taken on Flight Centre in Australia, or Expedia Lastminute and Ebookers have battled TUI in Europe). The online travel players are the first national travel industry players. What a fascinating and unique phenomenon – well at least I think it is unique to India.

If Badrinathan and PhoCusWright are right then the market has grown quickly to $2billion – he expects $6 billion in 2010. If Kalra of Makemytrip and the above numbers are right then the OTA industry is just north of US$500mm. The balance (assuming we can match the numbers) is therefore spread mainly between the 7 low cost carriers.

The online hotel market is not of significance according to Badrinathan. A lot of this is cultural. Domestic leisure travel happens in larger family groups and tends to be VFR related. Chain penetration is low and hotel quality is varied. This makes it hard for travelers to book domestic hotel inventory sight unseen. Trust and knowledge is limited. This is the space that HolidayIQ is trying to fill. Pitching themselves as Indian TripAdvisor, HolidayIQ is sitting on 8,500 reviews of domestic properties. Currently this is on the fringe (TripAdvisor is closing on 20 million). With English language being common among the Indian online travel customer HolidayIQ finds itself competing directly with TripAdvisor as well as needing to build the content/advertising model in a market that has not yet established a merchant/retail model. But it is clear that trusted hotel information is a necessary part of helping the online hotel business to catch up to the growing air business.

I found it fascinating to see the contrasts of India. Not just the typical contrasts of wealth, dynamism and poverty (which are mind boggling) but also the contrasts of what I read and see of the potential for online travel in India and the difference in the marketing and monetization approaches compared to other emerging markets.

Do you have any online travel experiences in India you would like to share?

Expedia launches hotels and attractions in india.

Announcement that Expedia has launched in India with Expedia.co.in. Much like their launches in Europe (except FR and DE) and Asia, the open functionality is just hotel and attraction. Business being operated by Sharat Dhall - Managing Director India. According to to his Linkedin profile Sharat joined Expedia in May last year. Prior to that he was a VP of eCommerce at the Indiatimes.com. Expedia is entering a market that is young but moving. Euromonitor predict a $2billion online market in India by 2010 but more than doubling every year. In the Expedia press release they say the Indian market has already reached that size.

Currently leaders in full service in India are Yatra, Makemytrip, Cleartrip and travelguru.

Travelcoity.co.in launched in India with flights and hotels in April last year headed up by Himanshu Singh MD - reporting through to the Zuji executive team (Travelocity's Asia Pac brand - except in India).

UPDATE - Ram Badrinathan of PhoCusWright made contact telling me that in his latest report on India PCW are estimating that the Indian online market will be $6 billion in 2010

Asian online travel numbers from Euromonitor

When talking growth projections - happiness is a low base. M-travel.com and HotelMarketing.com are reporting on numbers out from Euromonitor stating that India is the fastest growing online travel market in Asia- and by reporting growth numbers of 271.6% between now and 2010, presumably the world also. Parita Chitakasem of Euromonitor says that the Indian travel market will be worth US$2b in 2010.

270% plus growth in 4 years sounds fantastic but we need to put $2billion in perspective. The US market in 2006 was in the range of US$70-80mm depending on who you believe, poor cousin Australia is currently in the US$3-4billion range and PhoCusWright put Japan at close to $5billion.

Also it is very important when looking at online market size projections to understand exactly what is meant by online. You would expect that online should mean the whole transaction is completed with only the use of fingers, keyboard, mouse, Internet connection and credit card number. However a lot of markets and researchers include web referred bookings (started online but concluded on the phone/in a store) and pure call centre sales. The latter is especially the case in Chinese numbers.

That all said, US$2billion is a good market size. Though the market seems incredibly daunting with a billion plus people combined with complicated (and often inconsistent) regulation and technology requirements there is the attraction that the main markets both in terms of cities and demographics (ie middle to upper classes) are quite concentrated.

UPDATE - Jared at the Online Travel Review has a nice piece here on the Indian online travel market