A swelling middle class, an ultra-rich 1% and a rapidly growing population mean India has the potential to become a tourism powerhouse. But the country's largest online travel company has no intention of going to war. Rather, they are competing to see who can take advantage of growth opportunities first and then over the long term.
At the Skift India Summit 2024 in Gurugram, India, Dhruv Shringi, co-founder and CEO of Yatra Online, said, “I lose sleep over what my competitors do for a month. That's not the case,” he said. He said travel companies need long-term plans for the growth of Indian travel. He says, “You need a strategy to retain your customers over the long term.”
India is set to become the world's fifth-largest international travel market by 2027, and as the world's most populous country, it is on a fast track to becoming a huge domestic tourism hub.
Rajesh Magow, co-founder and group CEO, MakeMyTrip, said given the huge scale and potential of Indian tourism, there is scope for multiple competitors to enter. “If you look at him 30 years from now, it's going to be a huge market. The ones who execute the best will grow.”
“If you look at the growth rates, you can see that this market is only growing,” Magaw added. “That means there's room for more people to join. There shouldn't be a fight for it. Companies should focus on their strategy instead of always being obsessed with the competition.”
Both CEOs appeared together at the Skift India Summit in a session titled 'Where will the next billion travelers come from?'
India's domestic market is the “big daddy” of the travel world
In terms of how to tap into this huge market, both executives said companies must master promoting domestic travel nationwide and leverage technology to reach the growing middle class, especially those who don't live in big cities. He said it was necessary to reach that demographic.
Shringi said: “It has become much easier to reach customers. Now, thanks to digital platforms, it has become much easier. One of the important things now is that travelers were eager to travel. The idea is to expand into the second tier market segment, but only domestically.
“Domestic is the big daddy, but there's also a big international market to tap into.”
Mr Magaw added: “This will definitely support the domestic travel industry. Demand is creating opportunities. Revenues are up across the board. There are opportunities for growth in domestic and international travel.”
Hyperlocalization within India is key.
“The more you specialize in regions, the more you realize that each region is essentially its own country. This gives an advantage to local players who understand the market well,” Magou said. he said.
It's no longer “irrational”
Both executives said competition in India's travel market has matured significantly over the past decade, and intense price competition has been curbed.
Shringi said, “Even domestic airlines used to be highly competitive, but now they have come to their senses. It used to be irrational competition. Some travel regions have become more competitive, but the market is It’s matured a lot.”
Magaw issued a warning.
“Competition is very healthy and it's necessary. It's a huge market,” he said. “It's common for people to get hooked on the reach the internet provides, so you might jump in and try to acquire customers you can't reach.”
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