In a report compiled by looking at the search trends for both domestic and international travel sector for the upcoming holiday season, Google India revealed that in domestic hotel industry, branded budget hotel chains are driving the growth of hotel bookings online. With over 300 million Indians online and growing rapidly, hotel providers have been slow to catch on the digital bandwagon, with only 20% of total hotel inventory available online. Seizing this massive opportunity, several players including new and established players are focused on bringing quality budget accommodation online across the country.
With the availability of this new inventory online, the report reveals that Internet users in the country are lapping up the budget hotels online which are evident in the growth of Google search queries. Branded budget hotel queries in India are growing at 179% yoy in comparison to just 36% yoy growth in generic budget hotel queries. The overall queries for ‘Accommodations’ as a whole are growing at 37% yoy.
Speaking about the trends in the travel industry, Vikas Agnihotri, Director Sales, Google India, said, “Newer players in the segment have energised the travel vertical by unlocking a brand new inventory online. They have been quick to capitalise on the online demand with aggressive advertising spends in building their brands, which is leading to overall category growth for the Industry. We expect this segment to continue to see massive growth with leisure travel expected to pick up in the coming summer holiday season. As part of our own efforts to boost the sector, we’re sponsoring Great Indian Travel Festival which is currently live - to provide users a central destination for all the great holiday deals that are available online for the upcoming holiday season.”
Further analysis of the type of queries for budget hotels category reveal strong preference for distinct brand queries i.e. users are going online looking for branded budget hotel chains. Budget hotel queries already account for 35% of total accommodation queries and a large share of 47% of search queries are for the brands providing budget hotel inventory online.
In terms of top destinations searched for accommodation during March to June period of 2015, Maharashtra, Tamil Nadu, Karnataka, Goa, Rajasthan, Himachal Pradesh, Kerala and Delhi-NCR are the most searched destinations. Majority of these States capture business or work related travellers, indicating that leisure destinations will be the next growth driver for branded budget hotel category as today out of the top 50 domestic destination searched, only 30% of destinations represent leisure travel.
With the growing demand for branded budget hotel, players are investing in creating a distinct brand positioning as budget hotel providers are likely to see faster growth compared to generic travel aggregators. As per industry estimates, the inventory in the budget hotel space is expected to grow further with both new and existing players expected to bring up to 10,000 new rooms online this year.