Title - 20% Indian offline travel agencies closed down due to rise in online bookings: IATA

Around 20 per cent of offline travel agents in India have shut shop over the last few years, according to statistics of the International Air Transport Association (IATA). Globally, too, the numbers have fallen drastically. IATA membership in the UK has fallen to 3,000 from 60,000 in the last decade.

Supporting these statistics, a study by the Internet and Mobile Association of India (IAMAI) found that the ticketing business in India has largely moved to the online platform, due to which, revenues of offline travel agents have taken a beating. Online bookings of train and airline tickets rose 36 per cent in June, 2012, compared with the previous year. While railways registered 5.83 million online bookings in June, 2012, versus 4.30 million last year, airlines witnessed 1.45 million online bookings against 1.07 million, according to IAMAI.

Moreover, excessive discounts and personalised services offered by offline travel agents have also worked against their interests. Nonetheless, smaller agents who do not enjoy economies of scale, and therefore cannot offer specialised services, are finding it hard to compete, the study revealed. Further, the economic slowdown made it even more difficult for the travel industry, especially the smaller or regional players, many of whom have been looking for a buy-out.

The study cited examples of Cox & Kings, which is fast building its online expertise, and Thomas Cook, which, to cater to the unique Indian consumer needs, is offering options of buying online and paying offline.

The travel space is already seeing consolidation with mergers and acquisitions taking place in both online and offline travel industry. Yatra’s acquisition of Travel Services International, and MakeMyTrip’s buying a stake in the Singapore-based Luxury Tours and Travels Pte Ltd are part of this consolidation process, the study said.