26 September 2006

e-Travel Requires a Killer App

Earlier today, I was having a chat with Vernon about the surge in the number of internet users logging on to Online Travel Portals (OTP). It’s relevant to note how different varients of OTP's have spawned into vast numbers in such a short span of time. Not to forget in the least, is the list of VC’s queuing up to fund them. Some interesting stastics are showcased below -

  • ITA - $100 million - Battery Ventures, General Catalyst Partners, PAR Investment Partners, Sequoia Capital, Spectrum Equity

  • SideStep - $17 million - Trident Capital, private investors

  • Kayak - $15.5 million - General Catalyst, America Online, Sequoia Capital

  • Mobissimo - Undisclosed - Cambrian Ventures, Index Ventures, Benhamou Global Ventures

  • TravelPost - $1 million - Micus Capital, Arba Seed Investment Group

  • TripHub - Undisclosed -Madrona Venture Group

  • RealTravel - $1 million – Angel Funding

  • Viator- $6 million - Carlyle Venture Partners, Wandrian Brook Venture Partner, Boston Capital Vntures, and private investors

  • Gusto - $4 million - DHST, L.L.C., CEO

  • Groople - $6 million - ArrowPath Venture Partners, FA Technology Ventures

  • Indian Ventures:

  • Yatra - $5 million - Norwest Venture Partners (NVP), Reliance Capital

  • MakeMyTrip - $6 million- Gabriel Venture Partners

  • Travelguru- $10 million - Sequoia India's

  • Cleartrip - $3 million - Sherpalo Ventures, Kleiner Perkins

  • Is the effort really paying off and does the consumer get to be the king??

    An emphatic NO at this point in time - looking at some of the OTP's and services being offered, from a layman’s perspective it’s too much of information and too little for a choice. As this article suggests OTP’s are being promoted as an inseparable component of Travel 2.0, the new face of travel portals on Web 2.0

    To add to the misery, it’s quite appalling when you get on to the so called travel portal. Every other offering being showcased by these so called OTP, apart from the interface has nothing more to it. Customers are looking for ways to plan, search, and buy travel products from a multitude of sources. The prices, be it for the Hotels or Air Tickets show up the same or vary slightly. Loyalty Programs as a concept is, generally, extinct even so as services such as air travel become commodities.

    A recent study from PhoCusWright says the top four online travel agencies, Expedia, Travelocity, Travelport and Priceline grew 29% in the first quarter of this year compared to last year. Decent, but that lagged the e-Travel industry’s total growth.

    However considering these as toothing troubles - we also have a brighter side. Next wave of travel meta-search sites find fares more quickly and easily than there older predecessors. These site predicts how airline tickets will fluctuate, helping the buyer purchase when the ticket is cheapest have busted the mundane approach and have given consumers a unique channel.

    Lack of innovation and too much of hype around OTP’s is what is currently inhibiting the online travel. A Compelling and User intutive Killer Application is the need of the hour to rejuvinate the current scenerio. Hopefully it would turn out to be a worthwile wait.


    Bhanu Reddy said...

    Hello Mr.Narayana

    I am also technologist working in the travel industry. I found your blog at desiblogs.com directory. The information that you have here is very interesting. I work with one of the subsidiaries of Emirates Airlines.

    Bhanu Prakash

    Anonymous said...


    Take also a look to a site called Trabber. It is getting quite popular.

    Here is the address: www.trabber.com

    Bill Windsor said...

    It makes me awfully proud to see all these companies raising all this money to build travel businesses. My son started his little business with a wrong number and two nickels, and now Alcatraz Media is, I believe, the largest seller in the world of destination travel products (tours and activities). (One of his 2,000 web sites is www.reserve123.com) His revenues have been up by 42% in what seems like it should be a horrible year. His revenues in 2008 will be 20-times revenues in 2004. He'll top 2 million customers in a few months. No private equity or venture capital money, no debt, and profitable. Makes a Daddy proud!